Norbrook, Pure partners have regional designs for merged ice business
Norbrook Equity Partners is working on a plan that aims to develop ice supply into a regional market.
It starts with the $350 million that the investment holding company Norbrook and its joint-venture partners in Pure National Limited, PNL, are pumping into a new ice-making plant that is intended to position the company as the largest ice business in the Caribbean.
“We are finalising this in the next few weeks, as we have a brand new state-of-the-art plant heading to Jamaica as we speak,” said Executive Chairman of Norbrook Khary Robinson.
PNL is a new joint-venture company formed last year, following the merger of Robinson’s ice-making business, including Happy Ice, with Pure National Ice Company Limited, PNIC, which was founded four years ago by Peter Buckley and a group of investors.
Each partner in PNL holds a 50 per cent stake, and they both share management responsibility for the merged entity, and the three brands it represents – Happy Ice, Kingston Ice and Pure National Ice.
The tie-up of the two operations happened at a time when Buckley’s firm PNIC was weighing the need for some $250 million of investment capital to drive the ice business forward.
Robinson said the merger resulted from a number of stakeholder conversations, where both parties realised the need to enhance individual capacity and service level to meet the growing demand.
“Managing the risk around the investment required was critical to both entities, and so merging the platforms and creating capacity and service-level growth that way seemed most practical,” he said.
Norbrook Equity has been an ice investor for a decade or more. In 2008, Happy Ice was acquired by Jamaican investment outfit Braywick Capital, with Norbrook and a few others as minority investors.
Norbrook took over Happy Ice from Braywick in 2018, which allowed it to pivot from rivalry towards a collaboration with PNIC.
“In fact, we had many close friends and colleagues that were directors of PNIC. That made for easy, transparent and supportive conversations around making a merger work for everyone,” said Robinson.
The new ice plant now on the way is similar to the one currently in operation at the PNIC plant. The investment will double PNL’s ice production capacity, which now stands at 4.5 milllion bags annually.
“It’s a brand new plant that we’ve decided to build. The fact is that Pure brought in a state-of-the art plant four years ago. My guess is that the Happy plant is about 20 years old, so the efficiency and the productive capacity is much lower than the PNIC plant. At the same time, the market has grown and we need to service that, so we’re basically doubling our capacity,” Robinson told the Financial Gleaner.
Pure National Limited is being led by Managing Director Theresa Lindo, who has over five years of leadership experience running Norbrook’s water business under the JamAgua and Blue Mountain Peak brands, and local ecommerce operation Mailpac Local.
She is joined at PNL by Operations Manager Anthony Phillips and Sales and Marketing Manager David Walton, who as co-owners with Buckley, Jamaica’s longest-tenured ice entrepreneur, spent three years building out PNIC.
Robinson says the decision to pick Lindo as boss of the merged operation flowed naturally from the merger talks.
“We identified the resources both parties brought to the table and allocated them where they would be most beneficial to the business and its customers. Accordingly, Theresa, Anthony and David all had their individual skill sets, and we placed them in the roles that would reap the best outcome for us and the market in general,” he said.
Happy Ice and PNIC still operate from their separate complexes at Spanish Town Road and Marcus Garvey Drive, respectively. The PNL investors are now assessing how to expand the merged entity’s operating bases in the future.
“We should have made that decision on Sunday, but there are real estate decisions driving that, so we are looking at about four possible strategic locations that we’re pursuing,” Robinson said.
The Financial Gleaner understands that three of those locations are at Spanish Town Road in Kingston, Montego Bay and central Jamaica.
The new plant will either be installed at the Happy Ice complex at Spanish Town Road or at the new facility, which would call for a new building and infrastructure. Robinson says all of that spend is factored into the $350-million capex plan.
“That will give us a plant that produces ice that is cleaner, done over a shorter period, and that will last longer,” he said.
Norbrook estimates that the total Caribbean market for ice is around 11-12 million bags annually. However, the Caribbean foray will come after PNL sees progress on its more immediate goal of expanding service into the local hospitality and event sectors, Robinson said.
As to how PNL plans to develop a regional footprint as ice supplier, he held back on the strategy under consideration, while asserting: “We are well positioned to distribute our ice to the Caribbean.”
As for the water distributed under the JamAgua brand, that operation will continue. The water operation is not included in the PNL joint venture, but the intent is to continue operating the business in a way that allows it to benefit from ice manufacturing.
“Both operations are actually complementary and operate side by side today. So the same water that is purified to make ice gets secondary treatment coming out as water. What you then have is economies of scale, since two products effectively come from one plant,” Robinson said.
It’s likely that the ice and water operations will eventually be merged, he said.