Honey Bun 1982 Limited Expanding Production

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Honey Bun Employee operating machinery at factory

Having allocated additional space for inventory, Honey Bun Limited will add a fourth production line to its operations. Honey Bun hopes that this investment will increase revenue and profits for 2018. The expansion is not only limited to factory space but extends to the innovation of new products. The company recently developed new flavours for the Goldie cream-filled cake it is most famously known for. The new flavours include strawberry and black forest. Increasing the total flavours for Goldie to four, alongside vanilla and chocolate.

Additionally, Honey Bun will be making other products soon to hit the market such as shorty hamburger buns and cassava muffin. These new products will be showcased at Expo 2018 to be held next month.

The additional factory space was a necessity for the company in order to expand production. However, there is the need for more equipment as well. Honey Bun will purchase new equipment based on a production schedule they have devised in order to avoid debt financing. The company currently has three production lines and will be splitting one of the lines into two in order to create the fourth line once the equipment arrives by next week. Honey Bun is optimistic that they will max out the new space by the end of 2018 and should start a new expansion project by then.

In 2017, revenue for Honey Bun increased by 5 per cent from $1.19 billion to $1.25 billion in 2017. However, net profit decreased by 32.7 per cent from $139.5 million to $93.9 million in 2017. This decrease was attributed to the lack of space which hampered production and delayed the purchasing of more equipment.

Honey Bun Limited produces various pastries such as buns, cakes and breads and is currently trading on the Jamaica Stock Exchange at $4.48.

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