Nov 2011 Financial News

Lascelles diversifies into frozen meats

Nov 16, 2011

Lascelles Limited will start selling frozen meats in a bid to achieve performance target of 20 per cent returns, following its lease of a US$20-million (J$1.7 billion) food-production and storage facility formerly occupied by National Meats.

The company will refurbish and modernise the facility in a bid to increase Lascelles' storage space twofold, the company said.

"It is a huge facility and probably the nicest frozen-foods facility in the Caribbean," Bruce Terrier, managing director of Lascelles Limited, told Wednesday Business. "It will allow us not only to distribute but also to cut up meat. So you can have some amount of value added," he said.

Lascelles Limited is the trading arm of Lascelles de Mercado and Company (LdM), a J$39-billion conglomerate by assets.

The St Ann-based facility includes 100,000 square feet of ambient or air-conditioned rooms and frozen facilities covering 75,000 square feet, plus a processing facility.

"We are leasing with an option to purchase," said Terrier. The facility is said to be worth about US$20 million to US$49 million.

Said Terrier: "US$50 million seems a bit high but to replace it would be nothing less than US$20 million. We will spend millions to upgrade it."

Over the past 10 years, Lascelles Limited has acquired major brands in canned seafood, home care and infant, child and family care categories, and wine and spirits. The lease arrangement aims to continue "driving the 20 per cent annual growth" achieved over a decade, said a press release on the new initiative.

National Meats managing director and main principal, David Phillips, told The Gleaner last December that his company had ceased trading since last June but was not sold.

Billion-dollar debt

It distributed frozen meats, poultry and seafood to the hotel industry. National Meats disclosed on its 2009 annual returns that it was more than J$1.32 billion in debt.

The facility employed about 200 persons during its heyday, said Terrier.

"We are trying to get to that level," he said in relation to the jobs to be created by Lascelles.

The lease will allow Lascelles to not only increase its distribution of existing brands but sell and distribute meat products, including beef and mutton, he said.

"We see tremendous opportunities in the market and we are investing for the future," Terrier said in a release on the lease. "It positions us near the north coast, improving our distribution capability and service level to our hotel industry and wholesale trade customers, more efficiently and effectively."

Lascelles Limited distributes local and international wines, spirits, pharmaceuticals, foods, personal and home care and agricultural products. Lascelles also manufactures pharmaceuticals and agricultural chemicals that are exported throughout the Caribbean.

It does not, however, distribute the popular Appleton rum, which is produced by LdM subsidiary Wray & Nephew.

"This major move for Lascelles is an indication that the LdM group is committed to and is supporting its trading arm for future growth and development," said LdM managing director Fraser Thornton in the release.


Source:
business@gleanerjm.com
Jamaica Gleaner
Wednesday November 16, 2011

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