CFF expanding into supply of ingredients to manufacturers
CARIBBEAN FLAVOURS and Fragrances Limited, CFF, is adding a new line, ‘ingredients’, to the line-up of products it manufactures as additives.
“In developing, say, a soft drink, a company may come to us and ask for ingredients such as flavourings, whether artificial or natural as the case may be, but we want to go one further by providing other ingredients such as preservatives, colourings, and so on, and become a one-stop shop,” said CFF Managing Director Derrick Cotterell while reporting to shareholders at their annual general meeting.
CFF is a key provider of flavourings and fragrances used by other manufacturers in both the food and cosmetics industries in Jamaica.
Its product expansion is being pursued in tandem with overseas partner International Flavors and Fragrances, which recently bought into chemicals giant Dupont. That deal opened up greater access to other ingredients such as preservatives and enzymes used in food manufacturing, and consequently, will open greater possibilities for CFF here and on the international market, Cotterell noted.
“We’re very optimistic about the future for CFF. The company continues to do well and is a shining gem in the Derrimon group of companies,” he asserted. Cotterell is also founder, chairman, and CEO of CFF parent Derrimon Trading Company Limited.
Chief Financial Officer for both Derrimon and Caribbean Flavours, Ian Kelly, said CFF is seen as a vital part of the manufacturing arm of the Derrimon Group. With the enhancements and equipment upgrades at the company that Derrimon acquired back in 2014, CFF has the capacity to satisfy the needs of the distribution and retail channels across the group, Kelly indicated.
Over the 10 years since the acquisition, CFF has moved from $95 million in total revenue and profit of $38 million to annual sales of $900 million and over $135 million in profits, he said, adding that for continued growth, the flavour, fragrance, and ingredients maker will be looking towards exports for new sales.
After dipping in March, the company’s sales recovered in the June quarter, leading to a near four per cent improvement to $448 million at half-year, January to June. Profit also grew 16 per cent in the June quarter but was down by 12 per cent at $53 million over the six-month time span.
Kelly says for the first quarter ended March 2024 revenues at CFF was 12 per cent down, driven by a fall-off in demand from Jamaican customers and delays in order fulfilment. Net profit was $12.43 million, 52 per cent less than the $25.83 million for the similar period in 2023.
In its second-quarter earnings report, CFF said it continued to be negatively impacted by logistical issues, that is, delays in delivery of inputs needed to fill its orders.
“Based on our projections, these delays resulted in a two to five per cent negative impact on revenue,” Caribbean Flavours said in its performance review of the second quarter.
The company added, however, that it was still committed to hitting a new milestone of $1 billion in revenue this year.