Jamaica Broilers in Haiti: Exit or Edge? Custom Case Solution & Analysis

1. Evidence Brief

Financial Metrics

• Initial Investment: Jamaica Broilers Group (JBG) invested approximately 10 million USD to establish Haiti Broilers (HB) in 2010, later increasing to over 25 million USD in total assets by 2016 (Exhibit 1).
• Revenue Contribution: Haiti operations accounted for approximately 11% of JBG total revenue in 2018, yet struggled with consistent profitability (Exhibit 3).
• Market Pricing: Imported US chicken leg quarters were sold at 40% to 50% below the cost of locally produced Haitian poultry due to US subsidies and industrial scale (Paragraph 12).
• Currency Volatility: The Haitian Gourde depreciated by over 25% against the USD between 2015 and 2018, inflating the cost of imported corn and soy for feed (Paragraph 18).

Operational Facts

• Asset Base: HB owns a state-of-the-art feed mill, a hatchery with a capacity of 120000 chicks per week, and a processing plant (Paragraph 8).
• Supply Chain: Feed represents 60% to 70% of the total cost of poultry production. JBG imports raw materials through the Port-au-Prince terminal (Paragraph 14).
• Distribution: HB utilizes a network of 400+ small-scale independent farmers for out-grower programs and sells feed directly to over 10000 micro-entrepreneurs (Paragraph 21).
• Infrastructure: Electricity costs in Haiti are 3x higher than in Jamaica, necessitating heavy reliance on private diesel generators (Paragraph 15).

Stakeholder Positions

• Christopher Levy (CEO): Committed to the mission of food security in Haiti but under pressure from the board to deliver a return on capital (Paragraph 4).
• Haitian Government: Publicly supportive of local production but failed to implement promised 20% tariffs on imported poultry (Paragraph 24).
• Local Farmers: Highly dependent on HB for high-quality chicks and feed; they lack alternative technical support (Paragraph 22).
• JBG Shareholders: Increasing concern regarding the drag of Haiti operations on the overall group stock price and dividend capacity (Paragraph 27).

Information Gaps

• Competitor Data: Specific market share percentages for Dominican Republic poultry smugglers are not quantified.
• Asset Liquidation Value: The case does not provide a current market valuation for the feed mill or hatchery if sold in a distressed Haitian market.
• Security Costs: Exact expenditures on private security and logistics protection amid civil unrest are omitted.

2. Strategic Analysis

Core Strategic Question

• Can JBG transition from a vertically integrated poultry producer to a high-margin B2B input provider to survive Haiti structural volatility and US import dumping?

Structural Analysis

Porter's Five Forces Analysis:

• Threat of Substitutes (High): Frozen US leg quarters are treated as a commodity substitute by price-sensitive Haitian consumers. Local fresh chicken cannot compete on price.
• Bargaining Power of Suppliers (Moderate): JBG is vertically integrated for feed, but remains vulnerable to global grain price fluctuations and port disruptions.
• Rivalry (High): Competition is not from local firms but from subsidized international imports and unregulated cross-border trade from the Dominican Republic.

Strategic Options

Preliminary Recommendation

JBG must execute the B2B Pivot. The company cannot win a price war against US subsidized imports in the processed meat segment. However, the demand for high-quality feed and chicks among local backyard farmers remains high. By becoming the primary infrastructure provider for Haitian agriculture rather than a direct meat competitor, JBG lowers its operational risk while maintaining its asset utilization.

3. Implementation Roadmap

Critical Path

• Month 1-2: Decommission underutilized portions of the processing plant to reduce fixed overhead and diesel consumption.
• Month 3-4: Reallocate 70% of sales and marketing headcount to the Hi-Pro feed distribution network.
• Month 5-6: Establish a mobile payment or cash-on-delivery system for feed sales to mitigate Gourde volatility and collection risks.
• Month 9: Evaluate the feasibility of a solar-hybrid energy system for the feed mill to break dependence on diesel.

Key Constraints

• Security and Logistics: Gang-related blockades at the port or on main trucking routes can halt production regardless of strategy.
• Credit Default: Smallholder farmers may struggle to pay for feed if their own harvest fails or if local demand drops.

Risk-Adjusted Implementation

The strategy assumes a phased withdrawal from the broiler meat market. If the Haitian government unexpectedly implements poultry tariffs, JBG should maintain a skeleton processing capability to re-scale. However, the primary capital allocation must shift toward feed inventory and distribution logistics. Contingency includes a 15% cash reserve held in USD in Jamaican accounts to fund emergency supply chain bypasses.

4. Executive Review and BLUF

BLUF

Stay in Haiti but pivot immediately. JBG should cease competing with US frozen imports and reposition Haiti Broilers as an agricultural infrastructure company. The core value lies in the feed mill and hatchery, not the processing plant. By focusing on B2B sales of feed and day-old chicks to local farmers, JBG shifts the market risk to the retail level while securing the highest-margin segment of the value chain. This preserves the 25 million USD investment while narrowing the path to profitability within 12 to 18 months. Exit is a last resort that ignores the structural demand for agricultural inputs in Haiti.

Dangerous Assumption

The single most dangerous assumption is that the Haitian port infrastructure will remain functional enough to allow the consistent import of corn and soy. If the port faces a long-term blockade, the feed-centric strategy fails immediately as there are no local substitutes for grain at scale.

Unaddressed Risks

• Political Risk (High): Total state collapse would render any commercial operation, regardless of strategy, impossible to secure.
• Currency Risk (High): Continued Gourde devaluation could make imported feed ingredients unaffordable for local farmers, even if JBG operates efficiently.

Unconsidered Alternative

The team did not fully explore a Co-op Integration Model. JBG could lease its processing facilities to a collective of local farmers, shifting the labor and operational headaches of bird-rearing and processing to the community while JBG retains a guaranteed take-or-pay contract for feed and chicks. This would insulate the company from local labor disputes and direct production losses.

VERDICT: APPROVED FOR LEADERSHIP REVIEW