Caribbean Producers investing US$6.5m in cold storage
Published:Monday | February 15, 2016 | 5:26 PMSteven Jackson
Caribbean Producers Jamaica plans to build a US$6.5 million ($790 million) warehouse on lands contiguous to its head office in Montego Bay, to be used for cold storage.
Executive chairman Mark Hart described the construction as the company's major project for 2016.
"We plan to build a 60,000-square foot warehouse to increase warehousing space at the head office. It would be [connected] to the existing infrastructure at Freeport in Montego Bay," Hart said on Monday. "We plan to build and consolidate the operations."
The new warehouse will add close to one-third more space to the existing 143,000-square foot CPJ complex. It will be developed on 2.5 acres of land was purchased three years earlier.
DESIGNELECTED
In the last month, CPJ has elected the design of the steel frame and engineering drawings for the warehouse. The next step will include selecting a developer to install and construct it. CPJ will start the tendering process by summer.
"We hope to bid in July for the construction of the warehouse," said Hart. "It will cost US$6.5 million in total."
The company will spend some US$2 million on the steel infrastructure of the warehouse, another US$1.5 million on refrigerators and equipment. It also spent a little under US$2 million on the acquisition of land. The balance presumably will go towards the cost of construction and fees.
CPJ started supplying goods to the hotel sector in 1994 with the distribution of a brand of toilet paper from a 10,000-sq ft warehouse located at the LOJ Complex at Montego Freeport, now renamed Sagicor Complex. In 2000, the company entered the distribution market for selling seafood and dairy products with the construction of a 1,000-sq ft freezer at the complex. CPJ later moved its head office to Guinep Way, Montego Freeport, which originally housed a 807 garment factory.
Today, CPJ's cold storage and manufacturing plant is approximately 50,000 sq ft from which it sells a wide variety of meats, seafood, dairy, and frozen groceries, according to the 2015 annual report.
Overall, its Montego Freeport location houses refrigerated, frozen, dry goods, and bonded areas within 86,000 sq ft of warehousing space, according to the company's fact sheet on its website.
SECOND-QUARTER PROFIT
In its most recent financial report, CPJ recorded second-quarter profit of US$1.37 million on revenues of US$24.9 million at December 2015, or one-third higher profit year on year. The company benefited from a growth in the hospitality sector in Jamaica.
The company explained that selling and administrative expenses showed a small increase of two per cent year on year to US$4.53 million due to expenses related to setting up its joint venture meat processing plant in St Lucia.
CPJ St Lucia Limited represents a EC$25 million investment in a new plant and equipment, and 40 jobs for locals. CPJ owns 51 per cent of the operations, with Du Boulay's Bottling holding the other 49 per cent.
The plant was commissioned last November.