Michelle Chong, CEO of confectioner and bakery Honey Bun Limited, said last Thursday that the company will be spending in excess of $150 million in a phased programme to add to the existing plant at Retirement Crescent in Kingston.
The expansion will take place on two properties acquired for $120 million in the last 18 months.
They adjoin the home base at 26 Retirement Crescent, comprising lots 22 and 24. Planning and design for the additional space is now being pursued for the manufacturer which makes and wholesales pastries and cakes, including rum cakes, donuts, snack cakes, buns, raisin bread, cinnamon rolls and cheese bread.
The addition to the factory space is expected to double capacity over a two-year timeframe.
More automation of in-factory processes will also be pursued and machinery added for improved efficiency, it was indicated in the company’s recently released annual report.
Michelle Chong told the Jamaica Observer, “Our current plans are to double our existing export over the next two years,” with the capacity added.
“We are in the early stages of planning and doing drawings for the extended plant which will be done in phases,” she added.
Current capacity was not disclosed. The expansion, the CEO said, will also facilitate product diversification.
Honey Bun which listed in mid-year 2011 at $3 per share was priced at $9 per unit on Monday, February 1. Within the last 12 months, share value has increased by 46.34 per cent.
For the financial year ended September 2015, sales improved from $741.95 million in 2014 to $885.67 million, year over year.
Net profits increased by 213 per cent from $23.3 million in financial year 2014 to $68.15 million in the year ended. Earnings per share were $0.72 compared to $0.25 in the previous year.
Company chairman Herbert V Chong, in his statements in Honey Bun’s recently released annual report, commenting that the results represented record breakers for Honey Bun, said strides were made “based on a focused team who felt that long-term investments were more important than shorter ones. Now that the results of our earlier efforts are being realised, we continue to work towards a sustainable future by making deliberate strides towards our long-term goals.”
These goals, he said, included a commitment to international competitiveness, maintaining global standards to reduce the carbon footprint and automating various processes to remain competitive while building additional capacity — noting that the first phase of implementing solar energy has been completed.
The annual report indicates reduction in utility costs and better inventory management costs relative to sales with additional cost reductions in property rental and security attributed to the purchase of the new properties.