Wisynco acquires 50% of Trade Winds - Mahfood-McConnell partnership creates beverage powerhouse
Published:Friday | November 29, 2013 | 12:00 AM
Tameka Gordon, Business Reporter
Wisynco Group Limited has acquired a 50 per cent stake in Trade Winds Citrus Limited, the maker of Tru Juice fruit beverages.
The equity investment in the Bog Walk, St Catherine operation will be followed by "significant capital investment" as the partnership matures, the new partners announced Wednesday.
The deal gives Wisynco ownership of 50 per cent of all assets, including the brands and associated companies of Trade Winds.
The size of the transaction was not disclosed.
Both companies will maintain their current business structures, said managing director of Wisynco Group, William Mahfood, but will operate as partners.
"All we are going to bring in the short term is the capabilities from our sales team to help to grow the business, both locally and internally, and over time, look at working together in the creation of new products," Mahfood said.
The immediate plan, he said, is "to focus on the tremendous amount of short-term opportunities that exist in the beverage market".
The partners plan to increase immediately the nationwide distribution of Tru Juice by, said Mahfood, "putting their products in our coolers around the island where they don't have coolers".
"Going forward, we are going to be pooling our resources and maximising the assets of value in Trade Winds, and we are pleased to announce that Wisynco is an equal partner in the building of Trade Winds Citrus," said managing director of Trade Winds, Peter McConnell.
For Trade Winds, the deal offers an opportunity to move the Tru Juice brand beyond its current rut.
"Tru Juice brand has been around for a long time, but it has been at the same level for a long time, and while our customer surveys show that it is the number one juice brand in Jamaica, we have not broken into the next level and really maximised its potential, so I wanted to bring in a partner who could help me do that," McConnell told Financial Gleaner following the briefing.
Wisynco has a proven track record of distribution, he said.
" I wanted a partner for Tru Juice who could help explode the brand; it is a household name in Jamaica, but it does not reach everywhere, and why we chose to go 50 per cent is that I wanted a committed partner who put all their energies and efforts to help to build our brand," said McConnell.
One example he cited was school distribution. Tru Juice is sold in 250 schools, but Wisynco products are sold at 600 schools.
Tru Juice is currently exported to Barbados, but there are already plans under the partnership to expand into Trinidad & Tobago "as soon as possible", the Trade Winds head said. The company currently uses co-packaging services in the United States for distribution of Tru Juice in the North American market.
"This partnership will immediately offer broader availability for the Tru Juice brands locally and internationally, as well as look at expanding the offerings for the brands in the future. The intention is to significantly increase the capacity and capital investment and grow the business in the short term," McConnell said.
Mahfood said the combined beverage portfolios and customer base of the two Jamaican companies makes them the "largest non-alcoholic beverage business locally and in the region."
Trade Winds also produces Fresh juice drinks and Wakefield juices, but Tru Juice is its premium brand. Investments in other forms of packaging are also in the pipeline and potentially new products, according to McConnell.
Wisynco is at core, a beverage company, but its distribution portfolio spans some 4,000 products under 110 brands. Its own beverage brands include Bigga and Wata.
"What we are missing is a high-end, premium-quality juice range," Mahfood said. "We sell a lot of juices and juice drinks, but a lot of what we sell is the shelf stable products which didn't have that quality. Our customers want that diversity, but we don't have those products in our offerings, so we wanted to find a way to enlarge our total offering," he said.
The Tru Juice brand fills that void, he said.
"When people speak of the Rolls Royce of juices, they are speaking of Tru Juice, and we are very excited about this acquisition," he said, describing the deal as one of the largest investments made by Wisynco in another business.
No jobs will be lost as a result of the acquisition. The partners said they plan to increase staff amid "huge plans" for the expansion of the juice manufacturing company.
"As we put in new production lines and grow the business, what we expect is that there will be more jobs," McConnell said.
"It's a great day for business in Jamaica when the number-one brands of juices locally can be taken and merged with the strengths, relationship, business capabilities of Wisynco and our customer relations to create an enviable business model in a partnership which will bring about further business growth," Mahfood said.
McConnell added: "I feel that in order to unlock value and maximising potential, I am better off giving up some shareholding and bringing in partners who can help me achieve my goals, and that is why we agreed to such as significant stake in the business."
Trade Winds produces "about a million cases" of juice annually. The company expects growth of some 15 to 20 per cent in the short term through the partnership.