Below is the story on one of the nominees for this year’s Jamaica Observer Business Leader Award. All the nominees are drawn from the list of entrepreneurs who have listed their companies on the Junior Stock Exchange. The Business Leader Award presentation takes place on Sunday, December 7, 2014 at the Jamaica Pegasus Hotel.

DERRICK Cotterell spent his early working years immersed in a culture where nothing big happened without the magical power of money. In this world, it was an article of faith that capital was the lifeblood of industry.

Sixteen years ago, the sales manager abandoned a promising corporate career and emerged from the shadow of his employer to put this conventional wisdom to the test.

He was penniless, but had a clear vision of his entrepreneurial destiny. With nothing to lose but the sweat of his brow, he rolled the dice.

Cotterell knew the retail terrain in Jamaica inside out. He had just ended 14 years at GraceKennedy Ltd where he moved up the ranks from sales representative to unit manager, so he had reason to be confident about the route he would take to business ownership.

A local manufacturer of syrup, ketchup and other consumer edibles had a voracious appetite for bulk granulated sugar and the would-be businessman thought he had figured out a way to become the supplier of this vital ingredient.

The fact that he had no cash, bankable security or guarantees to be able to place an order of this size was a minor inconvenience; he had maintained contact with a former colleague who was now a broker in Florida and it was time to leverage the mutual trust for all it was worth.

When the ship docked with his container load of sugar there could have been no misunderstanding that a businessman with a special kind of determination and drive for success had just showed up at the doorsteps of Jamaica’s distributive industry.

“I did not have any money to clear the container,” Cotterell confesses, almost in a whisper as if he was unsure whether to share this private detail of his early beginning. “I had to borrow the money from a friend.”

It was an audacious start to this man’s march towards self-empowerment.

The white knight that came to the rescue shall remain nameless. Suffice to say, she can rightly count herself among the first supporters who enabled the birth of Derrimon Trading Company Ltd.

“When I tried to pay her back she insisted that I keep the money to reinvest in more supplies until I got off the ground,” says Cotterell in offering a deeper insight into the friend’s generous support of his effort. “This was extremely helpful to me.”

The entrepreneur, always attentive to operational details, was quick in recognising that urgent action was needed once sales appeared to peak at a relatively low volume. This situation was worrisome, particularly because bulk items produce small margins and therefore require high volumes to make economic sense.

“After two years we only had three customers,” he says. “Something had to be done.”

The obvious answer was product diversification; higher-margin items with potential to turn the company’s fortunes had to be identified and taken to the market.

Overseas access to a rich source of red kidney beans was already established, and the plant protein was gaining traction among Jamaican consumers. This product was the convenient choice.

Additional hands were now required on board to help handle the shift to the retail end of the distributive business and the arrival of the first employee, a delivery/salesman, triggered a sudden lifestyle change for the Derrimon boss.

“I had a van and the driver had to use it and he kept it overnight at times in order to do early-morning deliveries,” he notes. “I now had to take the bus to visit customers and to go home after work. I actually enjoyed the experience.”

Sometime in 2000, Cotterell arrived at the small warehouse where the kidney beans were stored, only to discover that the entire stock had been cleaned out — all $1 million worth.

“The one million dollars was more than the capital of the business,” he points out. “I had to borrow money to repay the suppliers. It was important to pay them back at whatever cost because trust had to be maintained.”

That same year his father Egbert died unexpectedly, forcing him to jump into action in order to save the gas station he operated from imminent repossession.

“I had to fill the breach,” he explains. “The marketing company was going to rescind the agreement. They identified a whole list of issues and I was given three months to fix them or they would rescind the contract. I was able to fix all the problems in less time and maintained the dealership.”

His wife Monique now runs the service station.

Ironically, this entrepreneur could not replicate at his own company the rescue job he successfully pulled off to save his father’s business, so Derrimon’s attempt at product expansion was short-lived.

This is how he puts it: “I had to put a pause to the trading business. After the robbery I could not do the two businesses at the same time.”

That situation reversed itself following a chance meeting one day at the gas station. Cotterell says he ran into an old acquaintance and that the encounter set in motion a chain of events that ultimately led to the rebirth of the trading operation.

“Out of nowhere he just came up and asked me if I wanted to do distribution for Nestlé,” the businessman recalls.

The global consumer goods giant was selling about $1 million worth of products each month throughout its so-called downmarket retail network in Kingston, St Catherine and St Thomas and the executives in Jamaica rightly believed that there was far greater potential for their brand within this segment of the market.

It didn’t take long for them to recognise that they were talking to a dogged and masterful salesman the morning Cotterell showed up at their corporate headquarters for the interview.

The symbiotic partnership that followed the meeting breathed new life into the moribund distribution firm.

“They helped me secure an initial bank guarantee for $1 million per month,” the founder explains. “I was faithful and they trusted me, so they gave me credit to help grow the business.”

Hungry for the success that had so far eluded him, the indomitable salesman seized the lifeline that was thrown his way. He rolled up his sleeves and went to work, he and his small team beating pavements to find new customers and to better serve old ones. From noisy bars and suffocating wholesale outlets, to community shops and informal roadside stalls no potential sale was too small to pursue.

The orders for the Nestlé brand of goods began pouring in: Betty milk, Milo, Maggi chicken noodle soup, Suppligen — the list is endless.

Within four years, the $1-million-per-month business that Cotterell inherited was turned into a robust operation that topped monthly sales of $20 million. The entrepreneur behind this remarkable success story had finally found a firm anchor within the distributive trade.

The transformation was swift and visible: small backroom office that once seemed adequate for the business was now suddenly bursting at the seams as workers struggled with the supporting paperwork.

In short order the business outgrew the 1,000-square-foot warehouse space at Luke Lane in Kingston that Cotterell shared with his mother Monica Bell, who operated a retail business at the front.

Trucks had to be hired and new, expanded warehouse facilities secured.

The year 2009 marked the beginning of a new phase in the company’s attempt at internal reorganisation.

Three years earlier Winston Thomas, an old friend with a reputation for effective cost-control and operation, joined Derrimon as general manager. Thomas, who now bears the title chief operating officer, wasted no time in streamlining the organisation. He quickly put in place the accounting and other systems to ensure that the backroom operation could keep pace with the rapid growth that was taking place in sales.

“In 2009, I decided to formalise the company and run it as a proper business,” Cotterell explains.

That year Ian Kelly joined the new board, and by 2011 became part of the executive team as the chief financial officer.

The addition of two high-level executives meant that the founder now had more freedom to explore additional growth avenues.

Prior to 2009, growth was organic — the company continued to deepen the penetration of the Nestlé brands, and moved into other product lines. For example, bulk rice was sourced from Guyana for distribution into the Jamaican market. The first client to stock the rice was Sampras Cash ‘N’ Carry, a high-volume wholesale and retail establishment located on Marcus Garvey Drive in Kingston.

Sales crossed the psychologically important billion-dollar mark for the first time in 2009 — to be precise, $1.4 billion.

But Cotterell and his team were not impressed. They remained as impatient as ever for the company to attain real critical mass that would enable more efficient spread of its overheads — an important consideration in an industry where margins are notoriously razor-thin and size therefore really matters.

The logical pivot in strategy came in 2009 with the owner placing Derrimon in acquisition mode.

The first asset that was brought on the book was Sampras Cash ‘N’ Carry. The choice should come as no surprise as this retail/wholesale establishment appeared on the radar from as far back as 2006 when it became the first local distributor to sign up for the rice that Derrimon brought into the island from Guyana.

The acquisitive management team accelerated their search for suitable takeover candidates within the industry and began locating them.

In 2011, the purchase of Kerr’s Enterprise Cold Storage at Brome Close in Kingston 20 gave Derrimon a toehold in a new line of business.

This latest addition was renamed Sampars Outlet Washington Boulevard, and now serves as the main hub for the group’s $37-million-per-year cold storage operation.

In 2012, yet another company was brought under the umbrella, this time a distributor with operations on West Street in downtown Kingston. It, too, now carries the Sampras brand name. Mandeville and Old Harbour followed: they were the first towns outside of the Corporate Area to host Sampars stores.

These acquisitions reshaped Derrimon in many important ways, but the asset that has the possibility of truly redefining the organisation is the newest member of the group — Caribbean Flavours and Fragrances, a company that was itself listed in 2013.

The deal for 49 per cent of the fragrance manufacturer was consummated in August this year. Cotterell sees possibilities for foreign exchange earnings and believes that his organisation will help Caribbean Flavours unlock its potential to expand into overseas markets.

Interestingly, for a group that sold well over $5 billion worth of products in Jamaica last year, Derrimon lacks the name recognition of other smaller players with which it shares space within the market.

Without a doubt, this is a substantial vertically integrated organisation that in some way, shape or form helps to bring into local households many of the products that find their way onto breakfast and dinner tables.

The goods reach consumers directly, either through supermarkets, shops, or wholesale establishments, including the five Sampars stores that Derrimon owns. The items range from meats to vegetable oil, corn meal, canned mackerel, ketchup, rice, sugar. Many of them bear the Nestlé name and others the Derrimon proprietary brand, ‘Delect’.

The company’s primary location is on Marcus Garvey Drive in Kingston. Here its corporate office and warehouse are housed in a 38,000-square-foot building. It has a workforce of 224, with many of the employees spread across the five Sampars Cash ‘N’ Carry wholesale stores.

For the financial year that ended December 31, 2013, the operation generated gross trading revenue of $5.25 billion, up from $4.76 billion the previous year. It also earned $37.6 million from its cold storage business.

In 2013, net profit of $50 million was realised, not including the $15.7 million write back of deferred taxation which was booked to its P&L because of the tax gain Derrimon now enjoys for having listed on the Junior Stock Exchange.

According to the executive chairman, preparation work to list his firm and benefit from the freeze on profit tax began the moment the Government announced the scheme in 2009 to woo privately held enterprise to the Junior Stock Exchange.

“I gave Ian (Kelly) the charge to take us public when it was announced,” he says. “I went to the first meeting organised by the stock exchange and immediately said that this is something I want to do. Ian put all the fiscal disciplines in place. He worked with the external auditors and implemented all their advice.”

Under the programme, companies that gain seats on the exchange pay no tax on their profits for their first five years as publicly traded organisations, and are liable for tax on only 50 per cent of their gross profits for another five years.

Derrimon listed on the Junior Stock Exchange on December 17, 2013, after having raised $150 million in its initial public offer. The company was owned by Cotterell, his wife Monique, and mother Monica. The trio remained the controlling shareholders after the share offer.

“Listing was the biggest thing that we did in a long time,” declares the executive chairman. “But we were ready to go to the exchange. Our board met at least 10 times each year before we listed and we had good corporate governance in place.”

He acknowledges not being able to visualise, a decade ago, an organisation of the size, scope and complexity that he now runs, but points out that over the years he has grown confident in his own capacity “to achieve anything that I set my mind to”.

His assessment of the main challenge going forward is finding ways to squeeze more and more efficiency out of the operation while maximising organisational synergy.

“The environment is challenging,” he notes. “But the key is for us to be in a constant state of preparedness to take advantage of opportunities when they come.”

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