Caribbean Flavours eyes bigger exports in revenue remix

Caribbean Flavours & Fragrances Limited, CFF, a manufacturing company owned by Derrimon Trading, is eyeing export markets to boost revenues. After reporting to shareholders on a flat half-year performance, the Derrimon subsidiary says it wants to double overseas sales as a contribution to total revenues, following improvements at the plant to achieve international certification.

Ian kellySpeaking to the Financial Gleaner after the company’s annual general meeting, Derrimon CFO and CFF Director Ian Kelly said operations at Caribbean Flavours are viewed as a work in progress. He says the company now has a dual focus: new markets and cost containment.

“The market in the Dominican Republic represents some exciting prospects, market size and the openings that we see give rise to the possibility of growing our revenues through exports,” Kelly said following the CFF annual meeting on Wednesday.

Both Derrimon, a distribution company that has fast diversified through acquisition in recent years, and Caribbean Flavours are listed on the junior market. In 2014, Derrimon initially acquired a plurality of shares in Caribbean Flavours, shortly after CFF listed on the market, and eventually acquired majority control in 2017.

Caribbean Flavours, is a supplier of flavours fragrances and essences to food and other manufacturing businesses. Its products are not sold in retail channels.

“Exports formed 27 per cent of total earnings in 2018 and our target is to have a 50:50 split between exports and local sales. The orders we see coming though from Trinidad and Barbados give us good encouragement in this export push,” Kelly said.

For the half-year up to June, Caribbean Flavours reported $226.33 million in total sales, up eight per cent over the 2018 period.

Kelly says the company achieved the internationally important benchmark SQF certification by spending a total of $35 million on machinery and process upgrades, and is now positioned to go more aggressively after export markets.

As part of that push, Caribbean Flavours is getting training assistance for its laboratory technicians under the auspices of its partners from Mexico, International Flavours and Fragrances, the Derrimon CFO said.

“We are now able to tackle these overseas markets since we have the SQF certification; that, along with plant upgrades and training of the lab technicians, puts us in a good position,” he said.

Earlier this year, CFF introduced sugar substitutes to the Jamaican food industry. This came as manufacturers and processors moved to comply with a regulatory mandate to reduce the amount of sugar in drinks.

The company recently began supplying sugar substitutes to Colefield Manufacturing, makers of Big Jo drinks, but local take-up of the substitutes has been slow overall, according to Kelly.

“We’re pushing the sugar substitutes in overseas markets, but really, our first port of call should be Jamaican products because, while the additional revenue from overseas is good, it is important that these products gain greater acceptance due to the health implications from an over-reliance on sugar,” he said.

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