Camilo Thame, Business Reporter

Following on plans to expand its juice business in the United Kingdom, Jamaica Producers Group has acquired Scottish-based juice and ready-to-eat food company, Simply Organic Limited, a move which will add about $430 million to the Jamaican firm's revenue stream.

JP, which announced on Tuesday that it had completed the sale of its 65 per cent stake in UK-based banana ripening and fruit distribution company, JP Fruit Distributor, notified the Jamaica Stock Exchange on Thursday of the acquisition.

"The purchaser is Serious Food Limited, a wholly-owned subsidiary of JPG," said the notice.

Producers' executives did not provide a purchase price but noted that the "company, which is profitable, achieved sales of £3.6 million ($432 million) in its financial year ended July 31, 2006."

Final acquisition price

JP's chief operating officer Peter Morris told Sunday Business that the final acquisition price would be determined under an 'earn-out' arrangement that rests on the company's future performance.

Morris did not specify the performance period.

JP's fresh and processed foods division, which involves the distribution of fresh produce other than bananas along with the manufacturing and distribution of juices, saw its profit before tax increase from $145 million from $7.4 billion in revenues during the six months to June 18, 2005 to $264 million from $8.8 billion during the comparative period this year.

The move is in line with plans alluded to by JP's chairman Charles Johnston, in an interview with Wednesday Business two weeks ago that the sale of UK Fruit would provide capital for expansion in other markets.

'Little bottle drinks' category

Simply Organic, which was launched in 1998, produces a range of fresh organic soups, ready meals and pasta sauces, and operates in the "little bottle drinks" category of the UK food market, a segment estimated to be worth £200 million in 2005 with growth of over 30 per cent annually.

Last May, when the firm won the Healthy Eating prize in the annual Scottish Food & Drink Excellence Awards for its "Fruitality" health drink - made from oats and berries - the firm's two co-founders, Belinda Mitchell and Christine Manson, had forecasted that their firm would reach turnover of £5 million within 3 years to 2008 in the UK alone.

JP operates its subsidiary, The Serious Food Company, in the U.K. to produce and sell smoothies and fresh juices in the U.K., Sunjuice being the largest business unit in the division.

camilo.thame@gleanerjm.com