Derrimon ups focus on retail
Bullish on plans to grow its retail segment, Derrimon Trading Limited said it has been taking steps to advance growth in this area across a number of its businesses.
“While we are largely a retail, manufacturing and distribution company, we believe there is more that can be done to grow the retail side of the business. Right now, our Arosa subsidiary is big in the hospitality food service business but not so big in retail. We think Jamaicans need to consume the best processed meat products, so we are working to have this delivered to them and in the best packaging. Having only a very small percentage of current market share, I believe we can grow in this segment based on the unique products we can offer to the market,” chairman and CEO of the Derrimon Group Derrick Cotterell told shareholders at the company’s annual general meeting on Monday.
The company, through its 5000 square feet Select Tech technology store situated above the new Select grocers in May Pen, Clarendon, which Cotterell said is being powered by capital investments of over $100 million in new inventory, is to also aid in moving the entity to become the “mini Best Buy” of Jamaica — offering local customers a wide range of top branded technology products and appliances.
“On realising a gap in the market for an all-inclusive comprehensive tech store, we’ve added Select Tech as a one-stop location where customers can get their computers, phones and accessories, television and all other appliances. The store is already open but we are going to expand the offerings to make it much bigger as we push for it to deliver significant revenues in the future. We expect the store to become fully operational by year-end and we’ve recently added an escalator to take customers up to the second floor,” Cotterell said in highlighting some plans for growth in that area.
Basking in its achievement of being ranked as the largest junior market company on the Jamaica Stock Exchange in 2022, after growing its asset base in excess of $15 billion, the company, whose business spans a number of local operations and a food entity in the US, said its intention is to further grow in the North American and other markets overseas.
“We’re going to increase our business in the US, in terms of adding more outlets as we take advantage of possible distribution opportunities. We currently have a wholesale and retail store in Brooklyn, which we will soon rename to Sampars New York,” Cotterell stated.
“We have plans to do much more overseas but more of that will be seen in 2024 — we have some opportunities coming for us in the stronger currency markets and we are looking to pursue them at that time so for this year we just want to consolidate and set up the business,” he added, noting the group’s immediate plan for the next three years, which he said was to increase its gross profit in order to earn better profits while using less money.
Gross profits, which stood at $4.6 billion in 2022, came in at $2.1 billion up to the half0year mark of June 2023 — up 14 per cent above the prior year period. This followed by increased revenues and profits at $9.5 billion and $199 million, respectively.
The food distribution and grocery company, as it also looks to recover cost associated with increased operational expenses as a result of higher energy charges, has alongside all its plans for 2024, said it will likewise embark on a solar installation project, through which it aims to cut electricity expenditure.
“We are looking at a plan right now with an international partner as to how we are going to deal with full solar across the different elements of our business and we expect to see payback from this within three to five years,” Chief Financial Officer Ian Kelly said.