Oct 2009 Financial News

GraceKennedy commissions pepper-mash plant

Oct 23, 2009

GK Foods, a division of GraceKennedy Limited, has commissioned a factory in St Elizabeth to produce pepper mash and escallion mash, using raw material supplied by local farmers.

The 10,000-square foot factory is projecting production volumes of one million kilogrammes of mash or crushed pepper in year one of operations, for use by GK Foods as spice in the manufacture of its other branded food and spice products, but also for sale to agro-processors.

The company made the investment in the downstream 'mash' business to plug what it said was a raw material supply gap.

At announcement of the factory project in January, GraceKennedy said the processed mash would be stored in holding tanks or vats at the plant and distributed, as needed, to GraceKennedy plants in Jamaica and the United Kingdom, specifically Encona which falls under the WT Foods group acquired in 2007.

GraceKennedy has markets for its sauces and spices in places like South Korea, Japan, North America, the Caribbean, and the United Kingdom.

"When you have built a reputation on the quality of your hot pepper and jerk sauces, and when these products have gained acceptance in international retail outlets, one of the worst scenarios is being unable to find a consistent supply of raw material for production," said Erwin Burton, CEO of GK Foods, in a company statement following the plant's commissioning.

"GK Foods saw an opportunity to consolidate the efforts of individual agro-processors, while stabilising the market by contracting farmers to produce peppers and escallion for the facility," said Burton.

Some 50 farmers have been contracted to supply the Bull Savannah-based factory at opening in September.

"Local agro-processors will no longer need to tie up limited working capital to purchase raw materials for processing and storing mash. They will also have a reliable supply of pre-processed raw materials to meet the increasing demands of local and overseas consumers for jerk and hot sauces, which, in turn, will reduce their reliance on imported mash to meet production requirements," said Burton.


Source:
business@gleanerjm.com
Jamaica Gleaner
Friday October 23, 2009

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