Logistics Hub

With social media and the Internet becoming such an integral part in the business landscape, e-commerce has quickly become the ideal way businesses enhance their customer relationship by offering that added convenience factor. Seprod Limited, in an effort to make their products and services more customer-centric, recently launched its e-commerce platform — Seprodshop.com. Seprodshop.com is focused on creating a virtual convenience store experience for customers. “The company decided to make the step in order to keep up with our changing environment and changing consumer behaviour. The move to digital and virtual is not a trend; it is the progression of how businesses must change to continue to satisfy our customers. “Seprod saw the need for the company to have a presence in the e-commerce space and saw demand increasing from our customers locally and in the diaspora. We will continue to innovate and offer new opportunities for our customers to access our wide range of products,” shared Kerrian Johnson, group marketing manager at Seprod Limited. Johnson continued: “Both local and international brands that Jamaicans have grown to know and love, such as Supligen, Betty milk, Serge, Gold Seal flour, the full range of Brunswick products, Kraft, along with so many more, are offered directly from the website. Not only is there a range of food items available on the Seprod Shop, but there is also a wide variety of personal are vitamins and supplements, and pharmaceutical household items. Seprodshop.com also offers recipe suggestions that are simple with that added touch of niceness that you only get using Seprod Group products.” “The company has taken their time to create an online shop that is easy to navigate. Users can simply log on to seprodshop.com, create an account, and start shopping. Your goods are then delivered straight to your door Monday-Friday for the low cost of $450 dollars. Delivery time is within 24 hours for orders within Kingston and St Andrew and 48 hours outside of the Kingston and St Andrew area (conditions apply). Seprodshop.com also offers free delivery for all orders over $10,000. When you order from Seprod Shop you will be gaining value for your money and premium goods and services minus the hassle, and exceptional customer service all in one place. What more could you ask for?”  

Sagicor Bank Jamaica (SBJ) and the Jamaica Business Development Corporation (JBDC) have signed a memorandum of understanding (MOU) to form the Sagicor Bank Business Resource Centre to provide free technical, business advisory, marketing, as well as research and project management services to small and medium enterprises (SMEs). With the JBDC being an agency of the Ministry of Industry, Investment and Commerce (MIIC) mandated to drive growth in the sector, this move marks Jamaica’s first public-private partnership arrangement of its kind. The partnership, officially launched on February 24, 2021, was endorsed by minister of state in the MIIC, Dr Norman Dunn, who lauded Sagicor Bank for taking action to assist the micro, small and medium-sized enterprises (MSME) sector, of which SMEs form a large portion. Citing his experience as a small business owner and the first-hand knowledge of the plight and varied needs of SMEs, Dunn welcomed the partnership and the support it will provide for the multi-billion-dollar sector. “There are about 429,000 MSMEs in Jamaica, contributing 3.5 per cent to GDP and a significant revenue resource for taxes — about 70 billion dollars; but yet still, it (the sector) as always looked on differently by [most of] the commercial institutions that we have in Jamaica… This is a very strategic partnership and I want to congratulate Sagicor Bank — because small businesses turn into large businesses,” expressed the state minister. CEO of Sagicor Bank Jamaica (SBJ), Chorvelle Johnson Cunningham, spoke to the growth potential of SMEs, the specific grouping which the Sagicor Bank Business Resource Centre will cater to. “Sagicor Bank will be a part of the foundation of growth in this country as we work with the JBDC to serve our small businesses. The role of the SME sector is critical to the development of our country and the JBDC and Sagicor Bank will stand with business leaders to ensure that all persons in the sector receive the most suitable advice that will help them to run their businesses efficiently. JBDC will be their initial guide where they will know everything that is necessary for them to come into a bank; and for us (Sagicor Bank) it will be to continue the hand holding process,” said Johnson Cunningham. Through the Sagicor Bank Business Resource Centre participating business owners will also have immediate access to other services such as investments, property, health and life insurance products and services offered under the Sagicor Group umbrella. “These companies will grow as we have within Sagicor Group Jamaica, the ideal capabilities for them to be able to launch their business even further, where Sagicor Investments Jamaica can introduce the companies to the Jamaica Stock Exchange’s Junior Market when they are ready,” Johnson Cunningham noted. JBDC Chief Executive Officer Valerie Viera said that “for a long time the MSME sector was seen as people who are in the survival business, getting one loan, to get another loan to get another loan. Today, JBDC and Sagicor Bank have come together to say they are more than a loan; they are a business possibility. Each business has its own needs and we want to customise the package, so it works for the entrepreneurs. It’s a big jump for the sector to get the fulsome support that it needs.” Using the export market as an example of one business model previously less traversed by Jamaicans pre-pandemic, Johnson Cunningham believes the partnership is timely, as businesses owners are pivoting and tapping into innovative and creative ways to promote sustainability and growth in the sector. The Sagicor Bank Resource Centre is located at 6C Constant Spring Road — a facility retrofitted by Sagicor Bank, equipped with an assigned JBDC representative, Sagicor Bank client care representatives, meeting and training rooms. The resource centre which is also accessible online through the JBDC and via telephone, will roll out various business modules over time.

The Caribbean Express, a new multi-billion-dollar submarine cable system being rolled out by American telecoms development firm, Ocean Networks Incorporated, is coming to Jamaica. The Caribbean Express project, an 18-fibre pair subsea cable system linking the state of Florida to Panama, which is just being built out, is also being extended to Kingston. In addition to Jamaica, Caribbean Express will also be rolled out in several other Caribbean and Latin American countries, thus bringing greater connectivity between Latin America, the Caribbean and the United States. The Atlanta, Georgia-based Ocean Networks cable system has announced that Jamaica will be among its regional stops, rolling out its expensive and hi-tech Caribbean Express submarine cable system. However, this will not be done immediately but incrementally. In the initial phase, which is currently in progress, the Caribbean Express network will not only run between Palm Beach, Florida and Balboa, Panama, but with additional landing points in Cancún, Mexico and Cartagena, Colombia. Ocean Networks disclosed plans to build more than a dozen landing points along the route in the coming years in cities such Kingston (Jamaica), Havana (Cuba), George Town (Grand Cayman), Puerto Barrios (Guatemala), Puerto Lempira (Honduras), Bluefields (Nicaragua), and Limón (Costa Rica). The company claims that once launched, the Caribbean Express will be the only system that can offer dedicated dark fiber pair indefeasible right of use (IRU) in the Caribbean market. An IRU permits customer to have exclusive use of fibres throughout the term of a contract. Ocean Networks owns more than 8,000 km of submarine cable systems around the world, mostly in the Western Hemisphere. Multiplexing technology is being used to connect West Palm Beach in Florida, Balboa in Panama, Cancun in Mexico and Cartagena in Colombia with high speed, low latency fibre-optic connectivity. The system will be designed for future connectivity options to other countries along the route. Valued at approximately US$300 million, Ocean Networks has to date already invested significant capital in progressing the route development of the system. The cable system will have connections to the network access point (NAP) and is backed up by a massive data centre operated by Equinix out of Miami. The data centre is considered the primary network exchange point between the United States and Latin America. The project is being financed by investment banking company Commenda Capital, whose founder John Runningen has given the thumbs up to the project. In a recent press release, Runningen remarked that “ONI (Ocean Networks Incorporated) has already received significant subscriber interest from large IT and telecom customers, who are anxious to expand their presence in these new and under-served consumer markets.” He added that the consumer demand for a new submarine cable system between Central America and the US is enormous with traffic nearly doubling every two years.

Mailpac is looking at long-term solutions to freight lifting problems, as expenses increased in 2020 due to challenges in this area, the company’s executive chairman Khary Robinson has said. The company, nevertheless made record revenues of $1.7 billion at year-end December 2020 and a net profit of $442.72 million. This compares to three months net profit of $86.28 million in 2019 the period when operations of a restructured company began. Profit, it was noted, was 39.6 per cent ahead of IPO projections. The company’s IPO prospectus in December 2019 projected profits of $317.0 million in 2020. Robinson said that due to the significant spike in package volume, gross profit was adversely impacted by massive spending on charter flights and other freight solutions to offset the lack of capacity at traditional airlift channels. Consequently, he said, Mailpac is finalising solutions to ensure that any extraordinary costs and constraints in airlift capacity are mitigated in the future. Operating expenses for the quarter were $110.1 million coming in 25.9 per cent higher than the prior-year comparative quarter as Mailpac had to significantly expand its operating infrastructure to support the new volume levels, Robinson outlined. Mailpac Group was created in 2019, consolidating the operations of Mailpac Services and Mailpac Local. The group consists of Mailpac Services, formerly MailPac Express which offers e-commerce fulfilment services from the US to Jamaica and MailPac Marketplace for cross-border online shopping with local landed prices. It also includes Mailpac Local which facilitates local online shopping and delivery from local retailers; Mailpac Financial Services for online shopping financing; Mailpac Card, a branded MasterCard for shopping online and Mailpac Ocean Freight for sea freight shipping and brokerage services. Robinson said 2020 amplified the shift towards online shopping and Mailpac as its local conduit. “The pandemic, though adverse in its overall impact on our country, has brought greater awareness to the value of online shopping with the convenience, cost savings and variety of choices being superior to other traditional shopping options,” Robinson said. The executive chairman believes the pandemic has created a shift in the way Jamaicans will shop in the future and Mailpac is well-positioned to continue growing by efficiently serving this evolution of the consumer market. Revenues for Mailpac for Q4 2020 were $512.1 million, which is 41.5 per cent higher than the $361.7 million achieved in the same quarter of the previous year. Gross profit for the quarter was $231.9 million, which represents an18.1 per cent increase over the previous year. For the year under review, revenue was $1.7 billion with a gross profit of $816.2 million. Expenses included $20 million in rewards and gifts to customers during a “Bring Back the Joy” marketing campaign. Net income for Q4 2020 came in at $103.8 million, 20.2 per cent higher than the same quarter of the previous year. Robinson said, “We are encouraged by the performance of the company in its fourth quarter as Mailpac has cemented its position as an integral provider to Jamaica’s evolving consumer market.” He added: “More importantly, Mailpac now has the appropriate infrastructure and resources to manage significantly more volume without incurring any additional costs or extraordinary capital expenditure.” Total company assets at the end of the quarter stood at $651.3 million, with $291.8 million of cash on the balance sheet at the end of the period. Shareholder’s equity stood at $571.4 million at the end of Q4 2020.

The power plant under construction at ‘The Nest’ is costing US$16 million or $2.4 billion in local currency, utility company Jamaica Public Service Company, JPS, has said. The 10 Megawatt power plant, which will be fired by natural gas supplied by New Fortress Energy, is to be commissioned at mid-year. “All elements of the project will be completed by June 2021,” said Winsome Callum, director of communications at the JPS. The Nest is an expansive manufacturing and farming complex in the hills of St Catherine owned by No. 2 poultry company Caribbean Broilers, which trades as CB Group. The complex is being built out in phases. The JPS will develop and own the combined heat and power plant on the lands held by CB and feed the poultry producer with electricity. The terms of their agreement were not disclosed. The excess power will be fed to the national grid operated by the utility but won’t add to the grid’s base load. “It is being built as part of the capacity that JPS is allowed to replace,” said Callum. The power plant is one component of The Nest agri-business complex at Hill Run, which was launched over three years ago as a US$120 million development under which the CB Group has been consolidating its business operations, including a feed mill. By using LNG as the fuel source instead of oil, the JPS said that the power plant would have a 30 per cent lower carbon footprint, and that the heat generated during the production of electricity would also be captured and converted into energy. Various elements of the plant are now operational, with testing ongoing, according to Dr Keith Amiel, CB’s corporate affairs manager, in response to Financial Gleaner queries. Dr Amiel said the plant would satisfy the power needs of The Nest, while noting that the buildout of the agri-business complex itself was also close to completion. “The Nest will be fully operational by April as most things are already in place,” Amiel said. “The main activities remaining are the administration block and changing rooms and lockers.” CB said it entered into the JPS partnership, having made a decision to remain connected to the national grid. The project represents a departure from the traditional business model, where customers receive power from the utility, in exchange for payment only, to one where the customer is part of supplying the grid while benefiting from energy and cost efficiencies. JPS President & CEO Michel Gantois described the project as an innovative partnership and is desirous of similar collaborations with other companies. “We are very happy to have collaborated with the CB Group,” he said in a joint statement with CB Group. “We know that they could have pursued alternative sources of energy for their operations, but they decided to stay on the grid for the benefit of the country. And we laud them for that. This works for everyone.” CB Group CEO Matthew Lyn added that one of the considerations for the poultry company was the potential burden that would fall on residential JPS customers, through increased electricity costs, were large companies to continue exiting the grid. The JPS understood our sustainability goals and worked hard to bring this idea to life. Less wasted energy will result in less carbon emissions, which is a win-win for our environment, our operations, and above all, the people of Jamaica,” he said.

President and Chief Executive Officer of the Airports Authority of Jamaica (AAJ), Audley Deidrick, says that the entity is looking at proposals from the operators of the two major international airports to address the long-term economic effects and recovery from the impact of the coronavirus (COVID-19) pandemic. These proposals will be put to the Government for consideration and approval, he told JIS News in a recent interview Mr. Deidrick said that some accommodations have already been made to the operators of the Norman Manley International Airport (NMIA) and Sangster International Airport (SIA), arising from the effects of the pandemic, which included delaying the start of some major infrastructure projects. “These proposals were quite major in nature. In fact, they involved in a significant way, revision of certain terms and commitments in the concession agreement, so because of the far-reaching nature of this request from both airports, it had to go through a process” he said. “It required going through deliberation and negotiation, which couldn’t be done in the short-term. So since December was the date that we had given for an initial extension of certain obligations, we further made some considerations to continue these extensions up to mid-2021, while at the same time, we will look at the requests that were put to us for consideration to go to the Government,” he explained. Mr. Deidrick said that in the case of the NMIA, the concessionaire had taken over operations of the facility only a few months before the pandemic hit. The management of NMIA was officially handed over to PAC Kingston Airports Limited, a subsidiary of Mexican firm Grupo Aeroportuario del Pacifico (GAP), in October 2019. “So essentially, they only operated that airport for three months before the news of COVID-19 came and the full impact really struck us in March. By March 25, the Government had to close the Jamaican borders from inbound aviation traffic,” Mr. Deidrick he noted. “This knocked them out of the water, so to speak, being a new concession and having not yet built up certain resources. Even though as a contracted obligation, the AAJ could have insisted on them doing or commencing works that were committed, judgement and understanding needed to prevail,” he contended. As a result, he said that the major programme of works that should have started in mid-2020, to include the expansion of the NMIA runway, was put on hold. Mr. Deidrick explained that the concessionaire had initially asked for a deferral of the commencement date and this was agreed on for December 2020. “It had to do with contractual hiccups that they were having, but when COVID-19 came, and they asked for a range of considerations, one of them was for the deferral of not just the commencement but the end date for that project and so we had given them an extension of up to six months to start,” he explained. Mr. Deidrick added that the proposals from the airport operators came subsequent to the request for the extension of time to commence the capital programmes. GAP operates NMIA under a 25-year concession agreement while SIA is operated by MBJ Airports Limited under a 30-year concession. MBJ Airports Limited is a partnership between GAP and Canada’s Vantage Airport Group.