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Jamaican Teas Factory Expansion to cost US$1 million

Jamaican Teas Limited disclosed in its new annual report that factory expansion plans will cost in the region of  US$1 million and are on track to begin in April 202l.

The project has a nine-month development timeline for completion and will add some 20,000 square feet of space. 

Jamaican Teas Limited manufactures Tetley and Caribbean Dreams teas and groceries; this includes packing and processing teas for other local companies as well products manufactured locally and overseas by third-party manufacturers. 

Jamaica Teas Caribbean Dreams-branded products on display. (File photo)

Expansion, increase, growth

Management said the factory expansion should adequately accommodate raw materials and finished goods for new lines of products, as well as increased demand for the company’s range of teas and groceries. 

In the meantime, the company will be increasing man hours from one to two production shifts daily to meet demand, management stated in the new report. 

A Jamaica Teas employee working on a machine at the company’s Bell Road headquarters in St Andrew, which is slated for a multimillion-dollar expansion. (Photo: Jamaica Observer)

Jamaican Teas is also expanding its warehouse at 132 Harbour Street in Kingston  with an additional 3,000 square feet of new space at a budgeted cost of JM$20 million. Upon completion, the company will rent the new facility.

The space is also needed, management outlined, for adequate inventory for continuous development of apartment units.

First-quarter results

In preliminary results for the first quarter of the financial year 2021, management outlined that manufacturing revenues increased 46 per cent over 2020, primarily as a result of an almost doubling of manufacturing exports. 

In 2020, Jamaican Teas’ export sales increased by 48 per cent over 2019 figures. 

After the expansion of its production factory, Jamaican Teas plans to expand its product offering. (File photo)

This was mainly due to the increased sales of distributors to their customers and occurred in the USA and most of Caribbean customers. 

Local sales increased by seven per cent in 2020 under COVID-19 conditions, as at-home consumption of food and beverage increased while restaurant and hotel consumption contracted. 

Jamaican Teas and its distributors benefited from this shift in consumer demand, management said.

The gross profit margin of Jamaican Teas moved from 29 percent in 2019 to 33 percent in 2020. 

This margin growth was driven in part by changes in the contractual terms on which non-manufactured products are bought from existing suppliers and also a shift to producing soups in-house during the year.

New products

The company introduced three new premium herbal teas under the label Tetley Super Teas. 

These new teas, Boost, Support and Immune, contain vitamin supplements. 

Jamaican Teas’ Support, Immune, Boost line of teas. (Photo: Jamaican Teas)

The products are packed locally at JTL’s Bell Road HACCP and Kosher-certified plant and are exported to the USA, Canada, and the wider Caribbean.

 During the year, the company also launched Caribbean Dreams non-dairy and gluten-free coconut condensed milk and evaporated milk. 

Management said that the company’s Caribbean Dreams select line of herbal teas launched in 2019, continues to enjoy buoyant sales locally and overseas.

“ All of the new products have been well received by Jamaican consumers as well as the overseas market and it is anticipated that they will go a far way in contributing to growing sales this year,” management said.

The company’s profit before tax almost doubled from $165 million to $311 million at year end.

Management said that the company’s production of soups and seasonings is continuing to grow and attract new customers locally and overseas. 

They concluded, “We sense that the economy could be recovering slowly from a sharp decline in 2020. The rebounding of the investment market augurs well and our local investments have continued to recover their value in the first three months of the new financial year. 

This, along with good returns in the US market, is expected to further improve and contribute to our profits for the year.”

The company has a real estate division and also holds 35 per cent in subsidiary QWI Limited (QWI), which holds an investment portfolio of companies listed on the JSE and several overseas stock exchanges.