Spike Industries Limited seems to have brokered an arrangement with the Jamaica Manufacturers’ Association to facilitate the company in obtaining up to $350 million in capital over the next three years at an interest rate below five per cent.
Five years after being acquired by Peak Bottling Company Ltd, Spike Industries is focused on expanding its production, warehousing and distribution facilities as it looks to increase its share of the local and export markets.
“The problem with such an investment is interest rates; if we could get interest rates between four and five per cent it would make a lot of sense for business. When you get interest in excess of five per cent up to 11 per cent it creates a serious impact on operations,” Chief Operating Officer Ian Tomlinson told the Jamaica Observerduring a tour of Spike Industries’ Windward Road factory in Kingston yesterday.
Ultimately, Spike Industries hopes to increase production capacity by 50 per cent. The increase in production numbers will come from more shelf-stable products, which the company declined to disclose, in addition to the retooling of its production factory to meet growth targets.
With six brands, Spike Industries has had competitive advantage in the production of soy beverages. Touting itself as the leader in this product category with its two main brands, Farmer Brown and Soyalushus, Spike Industries already has its eyes on four Caribbean markets to export the flagship Farmer Brown products.
“We would also love to support that product with the Pure Water and the Ripple juice blends,” Tomlinson said.
The target is to move export revenues up to 40 per cent of total revenue by the company’s financial year-end. Currently, Spike Industries’ exports to the United States and Canada account for roughly 30 per cent. The beverage manufacturer is also looking to grow revenues from increased exports to the US and Canada.
Operations manager of Spike Industries Dave Frazer disclosed that the company is also focused on securing customers in England.
“It’s a work in progress in securing the markets and we have been receiving assistance from the JMA,” Frazer told the Caribbean Business Report.
Still, Spike Industries’ potential to expand is constrained by its warehousing facility. The issue has even resulted in the company halting production to clear goods. As a result, the beverage manufacturer said it will more than double warehouse space from its current 3,500 square feet to 10,000 square feet.
Tomlinson added that the company is also working to improve machinery in line with expected capacity, and is also looking install a production line for the production of its purified water brand, Purewater, which was added to the company’s line of product after Peak Bottling Company acquired controlling interest in Spike Industries in 2013. The fact that the company has a well with depth of 180 feet proved feasible for it to enter the bottled water industry.
Since then, Purewater has become one of the fastest growing brands for the company.
Spike Industries began operating in 1980. Today, the company employs approximately 100 members of staff and is looking to add another 20 people from the planned expansion.