JOHN Mahfood and his father Adeeb placed Jamaican Teas in public listing mode the moment they acquired the firm’s predecessor, Tetley Tea Company Ltd, in January 1996.

For 13 years after the Tetley acquisition, the Mahfoods, with the elder Adeeb at the helm, operated the rebranded firm as a privately held family enterprise, but judiciously put in place all the systems and controls that could one day make for a seamless transition to public ownership.

The galvanising event that sent the family knocking on the doors of the Junior Stock Exchange came in 2009.

That year, the owners of Walkerswood Ltd, a financially troubled but iconic agro-processing firm, signalled their willingness to part with the brand, and the Mahfoods reached out for the chance to take on a valuable piece of asset that could help propel their family business to a new level.

It was an ambitious play by the father/son entrepreneurial team; but short on capital, they watched, almost in despair, as the coveted brand slipped from their hands.

It’s not that Jamaican Teas was not profitable by the standards of privately held local corporations — in fact, the company netted $72.4 million in 2009. But within the world in which the Mahfoods operate, capital is relative, and Walkerswood — while a promising takeover target that appeared within reach — proved beyond their grasp.

“It was a missed opportunity,” John ruefully recalls. “Walkerswood had lots of debt and we just did not have the resources at the time to be able to take it on.”

A potentially good asset had slipped by, but a valuable lesson was learned.

“We vowed that we never wanted to find ourselves in that position again, where we had an opportunity and could not take advantage of it,” John explains. “We realised that, to get to the next level, it would be helpful to get in our company financial resources from listing.”

A government programme aimed at luring mid-sized entrepreneurs into listing their firms on the Junior Stock Exchange was the latest buzz throughout corporate Jamaica just when the Mahfood family made the mental leap to go public.

Jamaican Teas was an ideal candidate for listing. It was profitable and, from the perspective of potential investors, would therefore be considered a relatively easy buy. Its asset value fell within the $500-million upper limit for membership at the nascent exchange.

The Mahfoods were not unmindful of the Government’s big drawing card: a special 10-year tax freeze on corporate profit on top of the existing tax-free status that investors in all publicly traded companies enjoy on their dividend earnings.

“We wanted to enjoy the tax-free status,” says John.

The tax holiday has been grandfathered in its original form for the benefit of the 24 companies, among them Jamaican Teas, that went public on the Junior Exchange before January 1, 2014. Companies that join subsequent to December 31, 2013 will enjoy the tax incentive for five years — the decision to cut the tax-free period by half was taken by the Administration as part of an aggressive push at revenue enhancement.

Privately held companies that want to benefit from this incentive have until 2016 to join the Junior Stock Exchange.

In the hands of the Mahfoods, Jamaican Teas Ltd made quantum leaps in product range and volume, local market penetration, and overseas market diversification, evolving from the single-product operation that began as a joint British/Jamaican enterprise in 1967.

Tetley’s first change of hands was to the Trinidadian-owned firm Neal & Massy Jamaica Ltd, which subsequently offloaded the company to the Mahfoods.

Once the ink dried on the later acquisition, Adeeb, the ebullient chairman and chief executive officer, set about doing most of the heavy lifting to build on what had been inherited from the Trinidadians. John became the peripatetic advisor, even as he meandered his way up the executive ladder at GraceKennedy Ltd where he was substantially employed.

By the time John joined his father full-time in the business in 2007, taking over as chief executive officer (while Adeeb retained the chairmanship), Jamaican Teas Ltd had already built a substantial local market presence; its range of teas were reliably present on the shelves of supermarkets, wholesalers, and community shops throughout the island.

The Mahfoods were able to avoid the organisational convulsions that many companies go through ahead of listing because of their long-term preparations for this major undertaking.

“From we bought the company in 1996 we decided to run it professionally,” explains John, the CEO and a certified public accountant. “We have always had proper audited financial statements and did not require major changes to be listed.”

Adeeb died in September last year, and the company is yet to decide who will replace him as chairman; one of the directors, John Jackson, has acted in that capacity.

But the elder Mahfood was at the helm of the company in June 2010 when they invited investors to buy 17.5 per cent of the shares, with the promise that the $84-million that they raised would go towards expanding production capacity, improving operational efficiency, and accelerating the search for new markets abroad.

And, as it turned out, public ownership has had other benefits.

“Our banks and suppliers now view us differently,” beams John. “We have an independent board that provides professional support to us, people we can bounce ideas off. I can’t think of a downside to listing.”

Thanks in part to its status as a publicly traded corporation, Jamaican Teas was able to successfully float a $100-million 8.5 per cent four-year bond last year; money that it used to pay down more expensive bank debt, and which came in handy when the directors decided to deepen the diversification into housing development.

So, in some respects, going public has played an important role in shaping the entire structure of this organisation — opening up funding opportunities that now allow it to stand firmly on three separate, albeit unequal, legs.

There is the real estate development company — H Mahfood and Sons Ltd. Last year it completed its first major development, funded in part from bank borrowing. The scheme, Carmen’s Court, is an 18-unit super studio complex on Kings Way in Kingston that was snapped up the moment it went on the market.

The $100-million bond that was floated in 2013 is helping to fund a more ambitious, but this time phased, development in Yallahs, St Thomas, about half-hour’s drive from downtown Kingston. Orchid Estate, as it is called, is a 71-unit two-bedroom bungalow gated community, with each house sitting on 4,000 square feet of land.

“I feel that there is a huge need for housing at this level, so I am taking a shot at it,” says Mahfood in explaining the shift to the lower-middle end of the real estate market.

The modest retail arm consists of three supermarkets, one of which is a 49 per cent partnership. Mahfood says that Shoppers Delite in Kingston and Savanna-la-Mar, and Bay City Foods in Montego Bay were designed as low-cost, foot-traffic supermarkets, and that his company has no plans to broaden its footprint in this sector.

“That’s it for this business!” he remarks wryly.

The manufacturing arm is the core operation within the three-member group. It is headquartered at 2 Bell Road in the heart of Kingston’s industrial belt — just off Marcus Garvey Drive.

The company moved into the refurbished 22,000-square-foot building, that serves as factory, warehouse and office, last year. The $170-million investment — enabling the owners to consolidate their manufacturing, warehousing and distribution centre, as well as their corporate offices under one roof — will eventually save on costs. Previously the operations were scattered across multiple locations.

Thirty-five of the firm’s 180 employees work in this building. The others can be found at the supermarkets, while scores find jobs on the housing site when construction is in full swing.

These days the factory is looking like the mini hub of a thriving trans-Caribbean outfit.

On a visit to the complex, the hum of conveyor belts and hissing of the packaging lines competed with the screeching of forklift tyres as workers loaded boxes bearing the Tetley and Caribbean Dreams brands on delivery trucks that were either headed for the wharf or the local retail trade.

The Tetley line of teas is manufactured under a licensing arrangement and can be distributed throughout the region and Florida. Caribbean Dreams, on the other hand, is Jamaican Teas’ proprietary brand. The company also distributes on an ad hoc basis, a range of third-party manufactured goods.

Tetley has been around for two generations, so it is not surprising that it is a household name in practically all the islands within the region. Caribbean Dreams is the brand under which Jamaican Teas has been marketing the edibles that it has been introducing on the local and overseas markets. The brand was introduced in 2000.

Just about every known herbal tea that is indigenous to the island is processed, packaged and marketed under the Caribbean Dreams logo; so too an endless list of prosaic supermarket items: cock soup, sorrel, powdered natural coconut milk, ackee, sardines, and cinnamon are but a few.

Given the ever-expanding array of goods that it has been taking to the market, it should come as no surprise that for the 2013 financial year (that ended on December 31) Jamaican Teas crossed the landmark billion-dollar sales value for the first time. From gross income of $1.2 billion the firm netted $93 million.

Below the impressive top line numbers are other strong indicators that this enterprise is indeed trending in the right direction. A key figure that pops up from a cursory review of the income statement is the $577 million that was generated from manufacturing last year. Critically, too, 51 per cent of this revenue ($293 million) came from the export market — Caricom and Florida.

This is a remarkable quickening of the export trend that started years ago and one that Mahfood and his team are still feverishly working to accelerate; so much so that exportability is now an important consideration in any decision to bring a new product to the market.

“Most of our products have export potential,” he offers. “The local market is tiny compared to the potential of export. Our objective is to make exports an increasingly bigger percentage of our revenue.”

The Jamaican Teas CEO acknowledges that there are challenges to making meaningful breakthrough within the USA and Canada — markets that companies like his find irresistible because of their limitless consumer spending power.

The task ahead is to find a way around a retail culture that restricts market access and limits the potential of exporters like Mahfood’s company.

“The challenge is to get mainstream access to the products, both in USA and Canada,” he says. “We hope to reach a point where the (overseas) supermarkets will put them (our teas) in their tea aisle.”

If this entrepreneur can lead his team at Jamaican Teas to meet this marketing challenge, he will further cement the reputation that he has built over many years as a corporate executive and entrepreneur who simply knows how to get things done.

For this task, he has had several years of preparation.

In fact, Mahfood himself traces his success at Jamaican Teas not just to his childhood when his father and mother, Violet, insisted that he and his three siblings help out in the family business after school hours, but to all the corporate engagements that have moulded him during his adulthood.

“I was able to watch my father, who became my inspiration, work,” he lets on. “He was a man of integrity, honesty and hard work. When he gave his word, he would stand by it. That stayed with me.”

At 19, John took up an accounting apprenticeship in the UK and immediately followed up with a six-year stint at PriceWaterhouse (now PricewaterhouseCoopers). Both experiences provided him with “the discipline of working in first world environments”.

Back in Jamaica, at GraceKennedy (he joined in 1996), he was, at various stages, in charge of export, and was promoted to the director of the company’s sprawling retail division. Here he was credited with turning around the division and overseeing the major consolidation that took place within the division. These experiences have been vital to the role he now plays at his own enterprise.

He credits the Jamaican Teas employees with much of the company’s success and points to staff retirement plans and generous health and life insurance benefits as part of an attempt to recognise the central role they continue to play.

“The philosophy on which we built the company is that all must benefit from our success,” he stresses.

Yet, walking the teeming factory floor that owes much of its existence to his entrepreneurial vision, Mahfood displays none of the affectation that many would automatically presume of an owner with his track record of achievement.

Soft-spoken and modest to a fault, he and his employees relate to each other like colleagues, with even the occasional argument over trivia. The relaxed, disarming management style betrays a steely confidence developed over a lifetime of hard work and success.

Moses Jackson is the founder of the Business Leader Award programme and chairman of the Award Selection Committee. He may be reached at moseshbsjackson@yahoo.com