Two-month extension for Mavis Bank Coffee Factory bids
Published:Sunday | February 6, 2011 | 12:00 AM
The Development Bank of Jamaica Limited (DBJ) has extended the deadline for the submission of bids for the Government of Jamaica's (GOJ) interest in the Mavis Bank Coffee Factory Limited (MBCF) by two months - from Friday, February 11, to Friday, March 4.
The DBJ holds 70 per cent of the Mavis Bank coffee operation, with Keble Munn and family owning the other 30 per cent. Milverton Reynolds, DBJ's managing director, said last Friday that the bank was extending the deadline "because of the overwhelming interest by potential investors who have asked for additional time to facilitate the completion of critical due diligence in the submission of their bids".
The 70 per cent stake it holds in Mavis Bank fell into Government's hands in 2004 when the National Investment Bank of Jamaica acquired the stakeholding as part of a restructuring of debts owed by the company.
The GOJ is seeking investors who will undertake the financing, development, operation, and management of the business, and pay for its interest in the company.
written proposals
The DBJ requires interested parties to submit written proposals as prescribed in the Information Memorandum document, which is available at a cost of US$1,000 from the manager, privatisation, at the DBJ.
Bids should arrive at the Development Bank of Jamaica on or before noon on Friday, March 4.
MBCF is located on 12 acres of land in Mavis Bank, St Andrew, in the foothills of the Blue Mountains. Close to one million pounds of beans are exported in barrels and bags under the MBCF trademark in the green bean form, with the remainder roasted and packed in vacuum bags under the Jablum brand.
The Jampro investment guide indicates that revenue over the last few years ranged between US$8 million and US$11.6 million per annum. However, sales have been affected by falling demand in primary market, Japan.
In third quarter 2010, provisional figures show a decline of approximately 30 per cent for the period August 2009 to July 2010, from $1 billion to $700 million.
record turnover
However, the company has been growing its market in the United States. In 2009, sales included a record turnover of US$3 million in this country, according to its managing director, Senator Norman Grant, which accounted for 20 per cent of overall sales.
The company benefits from a green bean agency agreement it had signed with the Munn family-controlled Blue Mountain Coffee Inc (BMCI).
BMCI, established in 1990 and located in Gainesville, Georgia, in the US, is involved in the marketing, distribution, and roasting of the coffee. It is run by Edgar Munn, the nephew of Keble Munn, a former government minister of the 1970s and pioneer and principal of the Munn family's coffee interests.
BMCI has expanded the green bean, roasted and ground-products market in the US. The performance in 2009 represented a turnaround from 1997, when 99 per cent of export sales was to the Japanese market, with only one per cent to the USA.
MBCF has also been working with BMCI on introducing smaller barrel sizes, targeting mini- roasters as a means of increasing demand.