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A senior executive at Portland Private Equity (PPE) says that junior market prospect, Tropical Battery has significant runway ahead of it with the transitions taking place in the automotive and renewable energy spaces. Vice-president of Investments at Portland Private Equity, Ricardo Hutchinson has identified future opportunities in the electric car market for Tropical Battery. “The COVID pandemic has served to highlight the key role that Tropical Battery plays as a market leader in the automotive battery space, which we believe may create opportunities for an increase in market share. The company is also in a strong position to take advantage of the transition of the economy to more efficient power storage in both the automotive and electric energy space,” Hutchinson told Loop News. He said, “Tropical Battery’s experience in battery technology puts it in prime position to take advantage of the transition to electric cars which are 90 per cent batteries and 10 per cent cars compared to the current models which are 90 per cent cars and 10 per cent batteries.” Moreover, as climate change forces adaptation to cleaner energy, Tropical Battery is well placed to expand its leadership position to this sector which is very reliant on battery technology, the investment manager said. Tropical Battery last week issued the prospectus for an offer of up to 325 million ordinary shares in the company. Priced at one dollar per share, the offer will open on September 22, 2020, and close on September 30, 2020. If all shares are subscribed, the company aims to raise $325 million, some of which will go to selling shareholders and the remainder to funding company expansion. “In addition to the growth opportunities mentioned in the prospectus, we remain bullish on the company and believe that there is room for growth of the short, medium and long term,” Hutchinson said. Portland Equity’s connection with Tropical Battery began in 2017, when the latter’s holding company Diverze, received US$8 million in a deal structured to allow PPE to make additional investments in the company. The deal was transacted through Portland Caribbean Fund II (two), to finance expansion plans both for Tropical Battery and Chukka Caribbean Adventures, companies owned by the Melville family. “We aren’t selling any of our position,” said Hutchinson. “We don’t directly own any of the Tropical Battery shares. “The Selling shareholder mentioned “Dai Diverze (Jamaica) Limited” is a subsidiary of the company we invested in Dai Assets Inc.” Hutchinson stated, “We are currently not contemplating an exit as we believe that Tropical Battery has significant runway ahead of it with the transitions taking place in both the automotive and renewable energy spaces.” All of the issued shares in Tropical Battery Company Limited are held by Dai Diverze, a company incorporated under the laws of Jamaica. Meanwhile, all of the issued shares in Dai Diverze (Jamaica) Limited are held by Diverze Assets Inc., a company incorporated under the laws of St. Lucia). The shareholders of Diverze Assets Inc. are Portland Private Equity (holding 40 per cent of the issued capital of Diverze Assets Inc.) and Mark Melville, Alexander Melville and Daniel Melville (collectively holding 60 per cent of the issued capital of Diverze Assets Inc.).   Source: Loop Jamaica

With the need to adapt quickly to new operational norms brought on by the ongoing COVID-19 pandemic, Jamaican manufacturer Red Stripe says building digital capacity over time has helped the company to pivot faster and craft a crisis-resilient business strategy. Severe disruptions to global supply chains have thrown whole industries off kilter, with many organisations struggling to balance the health and social well-being of their workforce with the growing need for operational efficiency. According to Red Stripe’s manager for total productivity management, Jerome McGregor, digital technology has been a key element of the company’s success. “A huge part of the reason we were able to so easily integrate COVID-19 health protocols was because we already took steps to establish a dynamic operational framework. Over the past few years we have invested in digital technology solutions that are extremely compatible with the emerging culture of the low-touch economy. Through extensive training programmes, and a reward and recognition system, our employees have been exposed to a new way of thinking that integrates them into this innovative workflow process. At the heart of this approach was the One2Improve app implemented by the organisation,” noted McGregor. Launched by the HEINEKEN Company across its breweries worldwide, One2Improve provides Red Stripe employees at the Spanish Town Road plant with the tools needed to optimise the production process. With each employee downloading the app to their smart devices, resolving maintenance inefficiencies and generating a database for more informed decision-making became hallmarks of the company’s strategy. FAVOURABLE RESULTS “The success of all our efforts simply boils down to employee buy-in,” explained McGregor. “People have to be inspired to see themselves and their actions as vital to the success of the larger entity. This, when paired with One2Improve, brought on a host of favourable results.” Among those McGregor listed were significant cost reductions, process simplification, greater capacity for accountability, and reinforced adaptability among their employees. “The results became incentives for our staff to use this new way of doing business to strengthen compliance with on-site COVID-19 health protocols – flagging violations and responding with effective interventions became our second nature,” said McGregor. The International Finance Corporation, a member of the World Bank Group, has stressed the growing need for strategic leadership that fortifies supply chain resilience during and beyond the COVID-19 era. With such positive results from Red Stripe’s business strategy, the company seems to be heading in the right direction. “Our aim has been to not only overcome COVID-19 obstacles, but to use the situation as an opportunity to look towards the future of business continuity,” shared Luis Prata, managing director at Red Stripe. “We have to be intentional and thoughtful about catering to the most vulnerable stakeholders throughout our value chain, while also taking care of those closest to home. Our responsiveness to these unprecedented times ought to inspire other manufacturers to take heed of industry best practices that can safeguard the success of the business ecosystem, which in turn safeguards the economies within which we operate.” Red Stripe is promoting a high-performance culture in tandem with One2Improve and other such solutions to further expand their manufacturing capacity.   Source: The Jamaica Gleaner

Nestlé Jamaica Limited (NJL) has announced its re-entry into the powdered milks category, thanks to its recently inked co-manufacturing deal with Dairy Industries Jamaica Limited (DIJL). The agreement has formalised DIJL’s production of Nestlé EveryDay milk powder in its production facility in Kingston since March 2020. The partnership demonstrates Nestlé’s confidence in DIJL’s capacity to deliver both the quality standards and manufacturing expertise needed for the highly competitive powdered milks market. Speaking on the partnership between NJL and DIJL, Daniel Caron, country manager at Nestlé Jamaica Limited, reaffirmed his company’s commitment to Jamaica’s manufacturing and dairy industries. “We are extremely happy to be able to launch another innovation that will satisfy the needs of the Jamaican market. We wanted to bring something that was value added to the table – an instant fortified milk powder to satisfy the milk needs of consumers in Jamaica at an affordable price. This new partnership is just another example of the commitment to Jamaica Nestlé has demonstrated over the last 80 years, which has included investing millions of dollars in local operations, innovations and renovations,” he continued. DIJL’s General Manager Radcliffe Walker lauded the new partnership with Nestlé, saying that the innovation will give consumers better value for their money. “Co-manufacturing is a great opportunity for DIJL. The increased product output will enhance our production efficiency and increase revenues and associated earnings for our team members. Our state-of-the-art facility has really revolutionised our ability to produce and maintain the highest product quality. We are excited to begin this new partnership to produce Nestlé EveryDay and I look forward to its success,” said Walker. JoINT VENTURE DIJL is a joint venture between GraceKennedy Limited and Fonterra, New Zealand. In 1995, the company became the first in Jamaica to be certified to ISO 9001 standard, and currently certified under the FSSC 22000:2017 standard. Frank James, CEO of GraceKennedy Foods – Domestic, said, “Manufacturing plays such a key role in our nation’s economic growth and development, providing employment for thousands of Jamaicans and reducing our dependence on imports. The impact of COVID-19 on the Jamaican economy has demonstrated how important it is that we invest in local manufacturing capacity. The cementing of this partnership between DIJL and Nestlé at such a critical time not only demonstrates confidence in our manufacturing capabilities, but also our commitment to Jamaican manufacturing as a whole.” Source: The Jamaica Gleaner

Lasco Financial Services Limited, LFSL, has hand-picked a few business operators from within the micro, small and medium-sized sector for a test run of a new tech-driven cashless business model system, designed especially, but not exclusively, for MSMEs that are among Jamaica’s large unbanked population. The microfinance company has gone ahead and invested in a full-service e-commerce platform that allows for the business owners to set up a fully functioning online store with inventory management, do cross-border shipping, conduct cashless transactions, develop and maintain transaction records, automate invoices, and create simple financial statements. Now, LFSL is getting ready to begin hosting the business owners, particularly those without bank accounts, in the pilot programme. “This financial service is a direct response to the challenges we observe facing microbusinesses, particularly when they attempt to obtain loans from financial institutions. They do not have sufficient records, and they especially do not have even a simple financial statement,” said LSFL Managing Director Hall-Tracey in an interview with the Financial Gleaner this week. The project is being done in collaboration with the Bank of Jamaica, BOJ, under the central bank’s fintech sandbox, which is designed to test innovative financial products, services, and businesses. Approved participants in the sandbox are subject to supervision of the central bank, which wants to promote innovation but within the context where risks are managed, including the prospect of product failure, as well as minimising the risk of jeopardising the integrity and stability of the financial system. The central bank does not provide financial backing for the projects. Those costs are borne entirely by the applicants. Hall-Tracey said she was not yet ready to disclose the size of the investment. Under the LSFL initiative, dubbed Lasco Biz, the microfinancing firm will, in essence, act as a merchant aggregator – or a super merchant to a preferred banking institution – in facilitating the small entrepreneurs, with or without a bank account, who wish to expand their sales and conduct cashless transactions conveniently across countries. In simpler terms, it means that with LFSL acting as a super merchant to a banking institution, the microfinance company can create multiple accounts for business owners to conduct transact in-store and online business if they do not already own a bank account. The details regarding plans for the settlement of the transactions and the banking partnerships were not disclosed by Lasco Financial. The merchant aggregator concept is new to Jamaica, but international businesses that act as super merchants to banks often allow for payments to business owners via debit or credit cards held by the super merchant, after which settlement will be done with the business owners. Hall-Tracey did not detail how income earned from sales would be transferred to business owners. However, the microfinancing company could leverage its network of MoneyGram stores islandwide for cash payments, or have the money sent to its co-branded prepaid Mastercard – Lasco Pay – which the company released last year. “Imagine a small entrepreneur operating a business on a social platform now being able to sell to customers and accept your payments any time and from anyone, anywhere, without the risk of sharing your banking details or collecting cash,” Hall-Tracey said in an interview with the Financial Gleaner. “These entrepreneurs or business professionals will no longer have to restrict their services to a fast-depleting cash-based customer segment,” she said. The test phase for Lasco Biz will run for up to two years, but the start date for the pilot is still to be determined. Once the test run ends, LSFL will need BOJ approval for a national roll-out of the service. The central bank’s fintech sandbox, which itself was only rolled out this year, has been generating interest from fintech companies and banking institutions looking to offer both mobile wallets and phone credit as a cash equivalent, in line with the sandbox objectives of encouraging innovations in financial services, promoting competition, and promoting financial inclusion for the unbanked. The programme also offers another means of closing off channels for the flow of illicit money by bringing more of the unbanked into the formal system. Both BOJ and telecoms regulator, the Office of Utilities Regulation, are collaborators in the sandbox programme. The sandbox regulations replaces those for the BOJ’s Electronic Retail Payment Services programme, or ERPS 2, which were withdrawn on March 2. The sandbox took effect two weeks later, on March 16. Under the initial phase of the sandbox, fintech companies and other regulated firms, such as cambios, remittance providers, securities dealers and banks, will form a partnership with deposit-taking institutions for delivery of payment services. Securities dealers seeking to participate in sandbox projects must get permission from their direct regulator, the Financial Services Commission.   Source: The Jamaica Gleaner by: Karena Bennett – Business Reporter

MBJ Airports Limited will use the recently secured US$60 million loan from Scotiabank to upgrade the Sangster International Airport (SIA) in Montego Bay. The upgrade project includes the expansion of the departures retail area, which will feature increased circulation space and an improved retail experience for passengers. The retail departures area will offer more seating, improved natural lighting, entertainment and exciting retail offerings that will create a memorable experience for passengers to enjoy their last moments in Jamaica. The retail departures area will offer more seating, improved natural lighting, entertainment and exciting retail offerings. The airport is also investing in a 1 megawatt solar PV installation solar project to power the airport facility – a move that is expected to significantly reduce operating costs and the airport carbon footprint. Other projects will include a major upgrade of the airport’s HVAC system to include the installation of new chillers and replacement of the airport’s passenger processing system. Shane Munroe, CEO of MBJ Airports “These investments will not only improve the passenger experience, but will also result in environmental and economic benefit with our renewable energy initiative. MBJ also intends to reshape the passenger journey with the introduction of next-generation technology to reduce the number of touchpoints and make the passenger experience seamless,” shared Shane Munroe, CEO of MBJ Airports. Perrin Gayle, Senior Vice President, Corporate and Commercial Banking said “Scotiabank is committed to contributing to growth and supporting the local economy. The tourism industry will undoubtedly be positively impacted by this long term investment which will by extension benefit Jamaica for years to come.” Gayle also noted that this is the second such arrangement undertaken over the past two years. “MBJ continues to demonstrate a commitment to the development and operation of the Sangster International Airport (SIA) to the highest standards as is borne out by its multiple awards as Leading Caribbean Airport. The AAJ will continue its supportive role as grantor of the airport concession to MBJ, as together we play our roles to ensure that Jamaica recovers from the impacts of the COVID-19 pandemic,” said Audley Diedrick, Chairman of the Airport Authority of Jamaica. In 2018, Scotiabank provided a financing arrangement valued at US$40 million for the rehabilitation of the taxiways and apron. The investments being undertaken by MBJ demonstrate its confidence that Jamaica will continue to be the destination of choice for passengers and will ensure that the facilities are on par with international standards. Sangster International Airport is the Caribbean’s leading airport and remains a significant economic driver. SIA employs in excess of 7,000 individuals with over 80 per cent of the businesses locally owned and has contributed over US$230 million directly to the economy of Jamaica.   Source; Loop Jamaica

Caribbean Flavours and Fragrances Limited says it has made a breakthrough in Suriname. The manufacturer has been supplying new products to the Surinamese market in addition to other flavours to newly-acquired customers in the beverage manufacturing segment within the region. In its newly released annual report, the company said active work has commenced in other regional markets. “Based on two exploratory missions undertaken during this financial reporting period, work has begun with the private sectors in the countries. We are confident that we will obtain the necessary approvals for registration and eventually trading,” the company said. Caribbean Flavours currently has customers in Jamaica, Barbados, St Kitts, Trinidad and Tobago, Guyana, Grenada, Suriname, Canada and the Dominican Republic. Management said that the company will continue to focus on innovations in the flavour technology, including sugar-reduction solutions. A technical team at Caribbean Flavours and Fragrances has been working with a number of local and regional partners using existing technology to reduce the sugar content so that they can offer their customers healthier products, management outlined. Results so far are “remarkable,” management said. In the June 2020 quarter, profit for the company climbed 17 per cent year over year to 30.4 million. Net profit for the six months was $49 million, 22 per cent up, year over year. Second-quarter profit was made on revenues of $161.1 million. Sales for the second quarter were up 41 per cent over the similar period in 2019. Management said the focus will continue on the expansion of regional sales of fragrances along with pursuing new opportunities in the development of locally grown products such as sorrel and ginger. “Despite the impact of the pandemic COVID-19 on our business and country, we continue to remain focused on innovation, product development and provide new solutions to our partners,” the company said. Source: Loop Jamaica

Local entrepreneurs are being encouraged to use qualitative and quantitative research methods to access data and information to grow their business on a budget. Speaking at a Jamaica Business Development Corporation (JBDC) weekly online series, ‘JBDC Virtual Biz Zone’, today (September 9), Chief Executive Officer of Blue Dot Insights, Larren Peart, said entrepreneurs should have a few specific objectives before embarking on research, be open to using non-traditional approaches, and be clear about the target groups. Business owners were advised by Mr. Peart that cost-effective methods, such as observational research, can be used by businesses to access useful data. “Every time you interact with a customer, that is insight you can use to develop or change a product. If you have a store, just simply observing where people go when they head into the store first, their behaviour when they interact with products, what they look at first and based on these patterns, you can make adjustments,” he explained. He also encouraged entrepreneurs to observe what products attract customers the most. “Analyse dwelling times, facial expressions, what causes delight or disgust; do testing, so lower the price a little or increase it to see what the reaction is from the consumer and if it influences their decision to purchase,” he added. Entrepreneurs were also advised by Mr. Peart to collect customer data through one-on-one interviews, focus groups and also using sales information. “Learn who purchases your products, what influences their purchasing decision, why are your products purchased over others, and the user’s opinions of your products,” he said. The ‘Biz Zone’ is a weekly series of webinars organised by the JBDC to assist micro, small, and medium-sized enterprises (MSMEs) to further their development. The JBDC is the Government’s business development agency that assists in the sustainable creation and development of MSMEs in Jamaica.   Source: Jamaica Information Service (JIS) by: Rosheika Grant

Scotiabank has announced several enhancements made by the bank that will provide greater convenience to customers using its automated banking machines (ABMs), mobile and online banking systems. Among the newly launched features for Scotia Online and mobile app platforms are access to e-statements for transactional and savings accounts, credit cards and lines of credit, the ability to update contact information and add third party recipients – a new feature for mobile banking customers. Using Scotiabank’s network of ABMs, which now include intelligent deposit machines (IDMs), customers can now make credit card payments that are instantly updated by inserting their credit card at the machines and depositing cash to make payments. According to Scotia’s President and Chief Executive Officer David Noel, the bank has already received overwhelmingly positive feedback on these additional features and promises additional enhancements throughout September. “By the end of September, Scotiabank customers can expect even more features and functionalities that are sure to add greater convenience and further reduce the need for branch visits to access routine transactions,” Noel said. Another novel feature to be introduced at ABMs is the ability to withdraw, deposit and transfer USD, from and to local currency accounts. The machines will both dispense and receive USD and seamlessly convert funds at the prevailing exchange rate. Scotiabank will be the only local bank to offer this feature. “When we analysed the types of transactions that are conducted frequently inside our branches, we were seeing high incidences of customers coming in for basic account updates, maintenance and inquiries. Source: Jamaica Observer

Despite trying economic times and uncertain prospects for most exporters, grass roots coffee company, Rocksteady Coffee is thriving during the pandemic because of the constant and increasing demand for its gourmet single origin beans. President and CEO, Ricardo Forbes attributes the continued success to relationship building and the company’s single origin approach that contributes to Rocksteady Coffee’s superior taste profile. All the coffee manufactured, grows on Forbes’ farm and is not purchased from other sources ensuring its consistently balanced, unique robust flavours appreciated by discerning coffee lovers. Established in 2013 and produced on a 17.5-acre farm located in the Blue and John Crow Mountains, Rocksteady Coffee Co. is on track to expand its reach in over 300 high-end specialty food stores in Canada and is currently available locally in select Progressive Group supermarkets, Things Jamaican at Devon House and Norman Manley International Airport. Members of the Rocksteady Coffee team Guidance from the Jamaica Business Development Corporation (JBDC) enabled the company to access an investment readiness grant of USD$25,000 from the World Bank’s Link Caribbean fund aimed at helping SMEs in the Caribbean grow their businesses. This saw the World Bank Group further matching half of $75,000 in successful angel investment raised by Rocksteady. With key milestones reached and product validation, the business is now focused on acquiring investment from the right angel investor and support from Link Caribbean. According to Forbes, additional funding will serve to “increase our holding to 40 acres, maximise farm yield, strengthen the sustainability initiative and continue to build on the relationship we have with our farmers and stakeholders.” Despite the coronavirus pandemic and the fates of numerous businesses in similar and disparate industries, the demand for Rocksteady coffee is growing. The company has been able to retain its 14 employees, 80 per cent of whom are women who reside in the parish of Portland. It remains very important for Forbes and his family to scale the business and see it thrive. This will not only help them to achieve their lifelong goals but to also sustain the lives of the workers of the rural district of Cascade, Portland.   Source: Loop Jamaica

The Development Bank of Jamaica (DBJ) has embarked on the implementation of a new product, the Innovation Grant Fund, to provide financial support for medium-sized companies looking to introduce or expand innovative processes, products, and/or services. General Manager for Strategic Services at the DBJ, Christopher Brown, tells JIS News that the facility aims to assist entities fulfilling the eligibility criteria to create additional revenue streams and employment, through the provision of a maximum $14-million grant to fund innovation ventures. The US$2.7-million grant facility is the first of six products being launched by the DBJ under the five-year US$25-million Inter-American Development Bank (IDB)-funded Boosting Innovation, Growth and Entrepreneurship Ecosystems (BIGEE) Programme. A loan agreement for the BIGEE Programme was signed by Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, and IDB Caribbean Group Country Department General Manager, Therese Turner Jones, at the engagement’s launch in March. The initiative is a comprehensive undertaking aimed at building out entrepreneurs and stimulating more innovation from micro, small and medium-sized enterprises (MSMEs), as well as strengthening the innovation and entrepreneurship ecosystem. Mr. Brown informs that this grant product is designed to support medium-sized entities that have been registered for a minimum of seven years, are generating annual earnings of between $75 million and $150 million, and have a Board of Directors in place. He advises that the BIGEE Programme also has a funding facility tailored for business start-ups and smaller companies, adding that “our aim is to have both products in the market to support companies at all stages”. Mr. Brown says that under the two-stage Innovation Grant Fund application process, which opens on September 7, representatives of these entities are invited to log on to the project website: www.thinkbigee.com, fill out the concept note/application form, which provides a basic outline of the proposed engagement, and submit same for evaluation Evaluations will be undertaken at the end of September or each month, depending on the number of applications meeting the criteria, until the 30 entities being targeted for support are identified. Mr. Brown says entities passing the concept stage will, thereafter, be invited to submit a comprehensive project proposal, detailing their engagements’ main objectives/goals and how these will be achieved. He tells JIS News that a $300,000 grant, in the form of a voucher, will be available to assist each entity in preparing their comprehensive project proposals. The General Manager explains that the grant will enable them to engage the services of a member of the DBJ-accredited list of consultants to assist in writing the proposal “and really helping them to think through and design the project”. Mr. Brown says the successful applicants will have access to a grant intended to cover 70 per cent of the overall project, up to a maximum of $14 million, with the applicants putting up the remaining 30 per cent as counterpart contribution. He points out that the businesses’ counterpart input, which can take the form of cash and kind, will be evaluated. Mr. Brown advises that phased disbursement of grants will be undertaken for each applicant, pointing out that this will be contingent on milestones achieved. “So if, for example, you’re going to do drawings for a machine being developed or you are in the process of getting a product passed by the Bureau of Standards Jamaica, we advance an initial percentage of the grant for the completion of the specified deliverable. Upon justifying the expenditure, applicants will get another tranche, until the entire sum applied for has been disbursed,” he adds. Mr. Brown says the plans for the Fund’s development and rollout commenced earlier this year, coinciding with the onset of the coronavirus (COVID-19) outbreak. He points out that the challenges posed by COVID-19, “re-emphasised the importance of supporting innovation in Jamaica, especially given the type of issues that may face the businesses [consequent on the pandemic]”. “Now it has become more of a reality that businesses are under severe pressure, given that [some target/traditional] markets have closed. But instead of their succumbing to the pressure, what they really should be looking to be is innovative. But innovation costs money, whether it’s to test the idea or trying something new or developing a new product,” Mr. Brown argues. Against this background, he says the DBJ facilitated consultations with several business stakeholders and interests, among them representatives of the Jamaica Manufacturers and Exporters’ Association (JMEA) and the Private Sector Organisation of Jamaica (PSOJ), “for which an intervention like this would be necessary to support [member] businesses at this time, especially given COVID-19”. Mr. Brown says this engagement will be greatly enhanced by virtue of the “extensive stakeholder sensitisation that’s going to take place outlining what we are looking for from prospective applicants”. He encourages businesses fitting the criteria for the innovation grant to prepare themselves to take advantage of the opportunity. “We are living in a new world of business, which requires unconventional products and services or different methods of delivering those in the marketplace. We must innovate,” Mr. Brown underscores.   Source: Jamaica Information Service (JIS) by: Douglas McIntosh