Jamaica Gleaner / Caribbean Flavours & Fragrances (CFF) Limited, which makes flavours for food companies, aims to grow revenues nearly threefold in the medium term from its current base of $400 million.
“We want to make CFF a $1-billion company,” Managing Director Derrick Cotterell told the Financial Gleaner on the margins of the company’s annual general meeting on Wednesday, but did not give a specific timeline to hit the target. “We want to expand the revenue streams of the business,” he said.
It comes within the context of management also discussing a plan to diversify revenue streams over five years.
Currently, 80 per cent of revenues come from flavours, most of which go towards supplying beverage and ice cream manufacturers. The remaining revenues come from fragrances supplied to companies which, for instance, make home-cleaning items. The company also recently added extracts as a third revenue stream.
Sales at Caribbean Flavours climbed to $410 million at year ending June 2017, up from $362 million a year earlier. Subsequently, the first-quarter sales for the July-September period underperformed due to weather conditions which reduced trading activities. The company reported $99 million in sales revenue and $18 million profit for the quarter.
Caribbean Flavours is the Caribbean representative for IFF, a leading global flavour house.
The bulk of Caribbean Flavours’ sales, however, are done in Jamaica and an important aspect of diversifying its revenue streams includes growing its regional customer base. It currently exports to a few countries, led by Guyana, but remains bullish on expanding into Cuba, and Haiti, while Dominican Republic is already lined up for business next year, Cotterell said.
For 2018, the company will target the “Greater Antilles followed by the Lesser Antilles” for market entry.
“We made a visit to Cuba earlier this year, also Haiti, and have some leads, but we are still working on it. Haiti is a difficult market, but we feel confident that we will get into Haiti eventually,” Cotterell said.
“Cuba is now opening up because of tourism and the need to get better quality products. So we are talking to some manufacturers now and going through the process of becoming a supplier to the Cuban market,” he added.
In November, US President Donald Trump tightened the embargo against Cuba, which will make it harder for US citizens and businesses to trade with the island.
Asked what it implied for Caribbean Flavours, Cotterell said: “It cannot hurt – there will be less competition. But we get regional competition from Mexico, also.”
Chairman Clive Nicholas added that it could also hurt the company as the Cuban economy might have grown faster with US firms invested there and doing business, which would have meant a larger market for Caribbean Flavours.