Local agro-processor Spur Tree Spices Limited has moved to increase its supply network as it continues to ramp up pre-processing activities at Holland Bamboo Limited in St Elizabeth and convert its Kingston-based Garmex Freezone factory into a space exclusively for the production of finished goods.

The company recent posted a notice on various social media networks indicating: “Farmers needed. Currently buying Scotch bonnet pepper, Jamaican red pepper, scallion, cassava, onion.”

According to Spur Tree Spices Jamaica CEO Albert Bailey, the company has a roster of local farmers with which it enjoys contractual arrangement to supply agricultural inputs such as scallion, pepper, thyme and pimento to its factory at Garmex Freezone and its associate company, Holland Bamboo. The company has also established supplier relationships with farmers who have leased lands surrounding Holland Bamboo Limited through the Agro-Investment Corporation.

Notwithstanding, Bailey told the Jamaica Observer that based on recent assessment, the level of raw material and pre-processed inventory levels were not able to “sustain the output that you need in the market”.

“So it is good to have the arrangement in terms of consistent supply from the farmers but those arrangements get interrupted due to factors that are outside of both your control and their control in terms of consistently getting produce at the level that you need,” the CEO shared, adding that factors for short supply include disease, weather conditions and the movement in the price of farm produce.

“It is always a difficult thing because you have peaks and troughs in terms of supplies. Although you have arrangements with farmers, those arrangements are interrupted at various times,” he emphasised.

In the case of weather conditions, Jamaica has so far, within 2023, had long bouts of dry and humid weather conditions followed with intermittent downpour due to El Nino effect. In this regard, Bailey pointed out that it is important that farmers benefit from stable weather conditions to ensure the quantity and quality of goods supplied. He added that heavy rainfall can make it near impossible to reap agricultural produce.

Faced with the aforementioned conditions, Spur Tree Spices has moved to increase its raw material and pre-processed inventory levels.

“So that ad was in relation to that because our levels had gone down below that which is needed to sustain the business over the expected period and, therefore, we put out the ad to try and attract more farmers in terms of supplying various ingredients or inputs that we need,” Bailey informed Business Observer.

He added that the shortage in supply has been due to the increased capacity of Holland Bamboo Limited to engage in the conversion of raw material to pre-processed inventory, “which is something we have invested significant amounts into to facilitate the ongoing demand for our business”.

In 2022, Spur Tree Spices entered a contract with Holland Bamboo Limited, in which it has equity interest. Then Bailey told Business Observer that the aim was to rationalise all storage and pre-processing activity at its 35,000-square-foot Garmex Freezone operation and move it to the St Elizabeth-based processing plant.

However, that rationalisation is ongoing as some 15,000 square feet of space at the Kingston factory is still being used for storage and pre-processing.

“Our entire business strategy now is to shift the space at Garmex to productive use for finished product and use Holland Bamboo for pre-processing,” Bailey stated.

“So with that factory [Holland Bamboo] now focused on the receival and pre-processing of raw material inputs for Spur Tree, then we also need to widen the network of farmers because we have greater capacity there [in St Elizabeth] to facilitate taking in more raw materials for pre-processing,” he added.

Despite having contractual arrangements to meet demand for raw material, Spur Tree Spices has always been open to accepting produce from other farmers. Bailey, however, noted that the company employed a more direct approach by advertising to farmers to ensure that it has a consistent supply of raw material to meet the demand for its finished goods — most of which it exports.

Spur Tree Spices manufactures a variety of sauces, dry seasonings, and canned produce. The company’s revenue for 2022 rose to $1.03 billion, up from $859 million in the year prior, despite supply chain challenges.

Chairman of Spur Tree Spices Metry Seaga attributed the growth in sales to increased local partnerships to build market share and brand equity. “These initiatives resulted in a 44 per cent increase in local sales,” he said.

During the year the company acquired a 51 per cent stake in the St Thomas-based Canco Limited, which trades as Linstead Market. It also entered into a distribution partnership with Massy Distributors, through which it hopes to gain access to other Caribbean markets.

Spur Tree Spices’ total comprehensive income rose to $115.62 million, 26 per cent more than that reported in 2021.