Derrimon expanding again with new warehousing space from Tankweld

Woodcat subsidiary also growing

BY DURRANT PATE
Observer Business Writer

Friday, September 13, 2019

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Derrimon Trading is again in expansion mode having secured a large warehousing facility recently built by Tankweld.

The 110,000 square-foot facility, located next to Derrimon's Distribution hub, located on Sampars', Marcus Garvey Drive property in Kingston, has been leased from Tankweld for 20 years.

Derrimon, which is in its 20th year of existence has been adding warehouse space over the years, having outgrown the 30,000 square feet acquired besides Sampars sometime ago, which is now full to capacity and previously a 28,000 square-foot facility, which is also full to capacity.

Derrimon, whose registered address is 233 and 235 Marcus Garvey Drive, Kingston 11, is in the business of wholesale and bulk distribution of household and food items inclusive of meat products, chilled ambient beverages and the retailing of those and other food items and meat products through the operation of a chain of outlets and supermarkets. The company's subsidiaries are involved in the manufacturing of flavours and fragrances along with wooden pallets.

When questioned by The Caribbean Business Report about the cost for the lease of the new warehouse space, Derrimon's Chairman, Derrick Cotterell shied away from giving a direct answer. However, he disclosed that come January, Derrimon's Distribution hub should be relocated from Sampars to the new facility next door.

WOODCATS SUBSIDIARY

Speaking in an interview at the end of Derrimon's annual general meeting on Wednesday, September 11 at Terra Nova All-suites Hotel in Kingston, Cotterell explained, “all of Derrimon's distribution business will be going there (new warehouse facility)”. Cotterell told shareholders that Woodcats International, which Derrimon acquired last year for a total of $355 million has also seen some expansion with an additional plant being set up at Sampars for the production and repairs of pallets.

Woodcats offers a full range of pallet solutions, including manufacturing pallets for export and warehouse storage, reconditioning and repairing of used pallets. Additionally, Woodcats distributes plastic pallets and produces shipping boxes, crates and lobster traps. Cotterell said Woodcats will be getting additional space to grow its business.

He told The Caribbean Business Report, “we are going to use some of the space at Marcus Garvey Drive that we won't be using for distribution to put Woodcats there, so Woodcats will have more space there.” The Derrimon chairman pointed out that since the acquisition of Woodcats in August last year the company has seen “significant sales, increased production and profits”.

Whilst on its growth drive, Cotterell reported that the subsidiary is looking for cheaper raw materials to become more efficient. Remarking that he is happy with the acquisition, the Derrimon chairman reported that “staff benefits have increased; we are looking out for our employees' medical benefits so that all staff can benefit and we are also looking at a pension scheme.”

Derrimon reported net profit of $277.21 million for 2018, which was generated from revenues of $9.3 billion. The group continues to experience robust growth, as evidenced by the 38 per cent increase in revenue year over year.

The profit was derived solely from core activities and not any extraordinary transaction, unlike the $206 million recorded in 2017. During the 2018 fiscal year, Derrimon continued with its diversification, debt restructuring and strengthening of revenue sources.

The directors reported, “our debt management strategies continue to fuel growth…we will continue to work with our various financial partners with the aim of utilising innovative solutions, while minimising risks.”

This was evident from the restructuring of the short -term debt of $550 million to a 10-year amortised structure and the upsizing of the preference shares to $350 million at attractively priced interest rates last year.


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