Jamaica Broilers selling hatchery assets in Iowa, US Loop Jamaica

The content originally appeared on: Jamaica News Loop News

The Jamaica Broilers Group (JBL) says it is selling its hatchery assets in Iowa, US for US$23 million as part of a move to improve the efficiency of its business in the North American market.

The chicken meat producer, which has significant assets both in the US and in Jamaica, said the sale will increase the efficiency of JBG’s vertical integration in the US.

The Iowa hatchery, purchased in March 2016 from Welp Inc, was held through the company’s subsidiary, International Poultry Breeders Hatcheries, Inc.

“This asset sale transaction is a strategic decision of JBG to consolidate its assets and to increase the efficiency of JBG’s vertical integration in the US,” according to a statement posted on the Jamaica Stock Exchange’s website last Friday.

Ian Parsard, Executive Director and Group Senior Vice President at JBL explained that the company’s operations were spread out in several states — with fertile egg production facilities in Georgia and Arkansas, hatcheries in Iowa and Pennsylvania, a feed mill in Georgia and a chicken processing plant in South Carolina.

“The first and most important thing to note is that we are not selling the business; we are divesting some of our assets, and in this particular case our hatchery assets in Iowa. We will continue to do business with the new owners of the hatchery. We are significant producers of fertile hatching eggs as part of our operations in the US”, Parsard told Loop News.

The Group VP explained that the spread of assets in several states resulted in considerable costs in transporting fertile eggs and baby chicks to distant locations.

“It’s a lot of movement that has to be taking place so when we say it’s a strategic decision to consolidate the assets, it will improve the efficiency of the business. We’re going to be consolidating operations around the processing plant in the future”, Parsard said.

He noted that the US operations contrast to the company’s operations in Jamaica, where most of its operations — the feed mill, processing plant and most of the contracted farmers — are located in the parish of St Catherine.

Parsard revealed that the other leg of its US business was the marketing and selling of the Best Dressed Chicken, which is now available in “about 20 different states in the US”.

Meanwhile, JBG advised earlier this month that an interim dividend of 38 cents per share was declared to be paid next month.

According to JBL’s third quarter report for the quarter which ended in January this year, the group produced a net profit attributable to shareholders of $1.3 billion.

Revenues for the quarter amounted to $23.6 billion, a four percent increase above the $22.7 billion achieved in the corresponding quarter of the previous year.

Both the Jamaican operations and the US operations of the company reported eight percent increases over the previous year.

The Jamaican operations showed a segment result of $5.9 billion which was $448 million or eight percent above last year’s segment result, while the US Operations reported a segment result of $3 billion which was $226 million or eight percent above last year’s segment result.