Central America Beverage Corporation (CABCORP), the new majority owner of Pepsi-Cola Jamaica Bottling Company Limited and other regional operations that two months ago were owned by PepsiAmericas, is pumping US$10 million into its Caribbean assets, including US$3 million to US$4 million infusion in the local plant to boost capacity.

CABCORP in May acquired 82 per cent of PepsiAmericas' holdings under a joint venture agreement that sees PepsiAmericas retaining an 18 per cent share.

The investment in Jamaica, which converts to J$267 million to J$356 million, will "improve manufacturing capability," Marcelo Tortoriello, general manager CABCORP Caribbean division, said Monday at a ceremony in Kingston marking the ownership change.

The improvements occurred over several weeks, and the new line was commissioned in July.

"Prior to July, the plant was at full capacity, but with the enhanced line and new components added it has enhanced capability and so we are now in a position to increase throughput by at least 30 per cent," added Andrew Reid, general manager Pepsi-Cola Jamaica.

Current team to retain jobs

Reid and his current team retain their jobs under the new owners, but he now reports to Tortoriello.

Jamaica's soft drink market is estimated at approximately 12 million cases per annum, of which Pepsi-Cola Jamaica commands more than 60 per cent, accounting for 7.2 million cases, on average, sold domestically per year, said Reid.

Another 10 per cent of output is exported.

The company's brands are distributed in Jamaica by Desnoes and Geddes trading as Red Stripe.

Pepsi Jamaica carries 18 brands in its portfolio, including brands such as Ting, Mountain Dew, Toma, Tropicana, Gatorade and its water product, Essential, but also D&G flavours which it distributes on behalf of long-time partner Red Stripe.

"The enhanced stations will allow us to fill bottles at a greater speed than previously, moving from, say, 400 bottles per minute to 600 bottles per minute," Reid told Wednesday Business.

The plan, he suggested, is to increase volume production for all brands bottled at the Spanish Town Road plant.

According to Reid, Jamaica was the first plant to be upgraded. Similar work is being replicated in Trinidad and Tobago, Barbados and Puerto Rico, the other three markets that make up CABCORP Caribbean.

"The same size investment will be made in each country," said Reid.

Total spend

Reid said the total spend across all four markets would hit US$10 million, all of which is being financed by CABCORP.

The new joint venture, which gives CABCORP management control of the country operations, combines the Caribbean operations with that of CABCORP's operations in Guatemala, Honduras, El Salvador and Nicaragua.

A new board has also been formed consisting of five CABCORP representatives including Tortoriello, and one representative of PepsiAmericas.

The 18 per cent stake retained by PepsiAmericas could potentially fall to PepsiCo Inc if a deal to acquire the bottler announced Tuesday is consummated.

CABCORP, prior to the deal in May, was bottler for PepsiAmericas, but also manufactured its own brands.

"Going forward, what we expect to see is an embracing of the new cultures through integration and alignment of the Jamaican practices with those of our parent companies both in Central and North America," said Reid, speaking at a symbolic raising of the CABCORP flag at the company's Spanish Town Road plant on Monday.

"We look forward to enhancing our dominant market share of not only the Pepsi-Cola brand but also our D&G brands in the portfolio through this synergy."

Team remains intact

Reid's team remains intact under the new ownership - among them Dianne Tomlinson-Smith, director of finance, Denise Dixon, marketing manager, Tanya White-Martin, head of human resource, and Richard Bailey, general sales manager - and the name of the company remains Pepsi-Cola Jamaica, at least for now.

"We believe that the business is better run by local people - we do have the best people in Jamaica - but will give some support," said Tortoriello.

"Expect continued commitment to product quality from CABCORP, our continued investment in D&G flavour brands and promotion," he added.

Pepsi Jamaica employs 184 persons, and no jobs were cut during the transition, the new owners said..

According to Tortoriello, a relaunch of the flagship brand, Pepsi-Cola, is also expected across the territories, but said it was too early to disclose the specific details.

"It would be immature to say what the investment will be but a sizeable investment will be made in the marketplace to relaunch the Pepsi brand... to take a number of form, new imaginary, new promotional activities all surrounding the marketing of the brand," he said.

The relaunch is expected to kick off by the end of September.

"It's early days yet but we expect to continue the brands that we already have in our portfolio. Of course, we will be doing some rationalisation," added Reid.

"It is expected that there are brands that CABCORP has which may be similar to some of the brands we have, and so an opportunity to look and evaluate the two sets and make a determination which is the one that has more value to the Jamaica consumer and that can provide revenue for the company," he further said.

Tortoriello added that new products would be introduced only after "lots of consumer research to understand the needs of the consumer in Jamaica."

CABCORP sales last year reached US$500 million, but with the joint venture it is expected to grow to US$800 million this year.

sabrina.gordon@gleanerjm.com