Vet business looks to food-testing market, IPO for expansion

Veterinary doctors Graham and Katalin Brown have been providing healthcare and nutrition of the highest standard to animals in Jamaica for the past 30 years, driven by a passion and love for nursing our sick, injured, or malnourished furry, feathered, and reptilian friends to health.

They ventured into the importation and distribution of animal food, equipment, and other supplies to create critical mass for procurement for their veterinary clinic and other similar businesses across Jamaica. Now, Animalcare Veterinary Services Limited (AVS) has annual turnover of an estimated $200 million per year from three distinct revenue streams – veterinary services, the marketing and distribution of veterinary products, and veterinary and food safety laboratory testing and diagnostics.

The Browns have a keen interest in expanding their food safety laboratory services and tapping the stock market through an initial public offering, with a projected timeline for going public being by next year.

“Hundreds of millions” invested

The amount of resources invested and reinvested into the business runs into “hundreds of millions”, according to CEO Dr Graham Brown, who adds that the business’ financial controller is in the process of calculating the precise investment figure as part of preparing the company for possible listing on the junior market of the Jamaica Stock Exchange with the guidance of investment adviser Mayberry Investments Limited.

It would not be the first company in the health field to list, if the IPO becomes a reality, but it would be the first that tends to the well-being of animals.

Incorporated in 1999, with the wife and husband duo as shareholders and directors, the AVS was formed with the objective of providing veterinary support services to Animalcare Veterinary Hospital run by the Browns at 110A Constant Spring Road in Kingston, their Animalcare Veterinary Clinic in Portmore, 20 other veterinary clinics run by other veterinarians across the country, and the AVS Laboratory at 34 Red Hills Road in Kingston.

Today, AVS is one of the leading companies importing, marketing, and distributing veterinary pharmaceuticals, equipment, and other animal-related products. It has developed strategic partnerships with two animal health companies – Merial and IDEXX Laboratories – that are global leaders in the development, production, and distribution of veterinary pharmaceuticals and diagnostics.

AVS also provides veterinary laboratory and diagnostic products and services to veterinarians and the livestock sector in Jamaica since 2012. The AVS lab was recently upgraded at a cost of about $50 million and received world-class certification to ISO 17025 level in food-safety testing, a service provided to several major small and large food manufacturing and distribution companies in Jamaica.

As an importer and laboratory operator, Dr Graham Brown is only too familiar with the vagaries of the governmental bureaucracy that he says impedes businesses in Jamaica. He is particularly peeved at the difficulties related to the treatment of laboratory specimens, which restricts his company from doing more business emanating from other countries in the Caribbean and elsewhere overseas.

Still, the AVS CEO, who received his veterinary training as well as pursued doctoral studies and worked in virology in Hungary between 1976 and 1990, believes that the laboratory services hold the greatest potential for expansion of the business he runs with his wife, a Hungarian national. He is projecting that at the current level of expansion and development, the AVS lab should be doing $200 million in annual gross sales that is now the turnover of the entire business.

Dr Brown is of the view that state regulator, Bureau of Standards Jamaica, is inhibiting the independent food safety testing sector by being a testing-service competitor while also being the regulator.

State-of-the-art facilities

Of the 40 persons who work across the business, seven are laboratory analysts, seven are veterinarians, and some are veterinary nurses, veterinary technicians, and porters at the animal hospital. The College of Agriculture Science and Education is said to provide the bulk of the trained staff needed by the company.

The AVS animal care hospital and clinic pride themselves on being modern facilities outfitted with state-of-the -art equipment, not found, the CEO contends, in many hospitals and health centres catering to human health and wellness. The Portmore clinic, he notes, is able to operate seamlessly in a mall setting beside law offices and other businesses. The veterinary services include endoscopy, ultrasonography, and cardiology.

The Browns also have expansion of the vet services and animal hospitals in mind and have scoped out the possible integration of smaller veterinary clinics across the country into an integrated network under the AVS brand.

“We are not looking at building new structures, but rather at integrating existing clinics into our operations,” said Dr Graham Brown.

While profit margins are said to be small in the veterinary care side of the business, the AVS CEO told the Financial Gleaner in an interview that the operation has been able to sustain itself and provided seed funding and financial support in the process of building out the distribution and lab sides of the business. Some funding has been provided through bank loans, with a small percentage of funding coming from loans from private investors in the business.

Brown is convinced that both private and public financial institutions in Jamaica are not doing enough to facilitate business, especially those operating in niche markets such as the AVS entities.

“There is very little of that kind of financing available to us. The number-one challenge we have is financing. We are fortunate to have private investors who loans us money, money that money is not always as cheap as it should be and private investors are not in the long-term credit business. Most of them want their money back within two or three years,” he said.

huntley.medley@gleanerjm.com