Jamaican Teas Limited (JAMT) is looking to further expand its local and regional footprint following the appointments of Wisynco Group Limited and Alston Marketing Company Limited (AMCO) as the new distributors in Jamaica and Trinidad & Tobago, respectively.

Wisynco taking over the distribution of the Caribbean Dreams and Tetley tea portfolios, along with select grocery items under the Caribbean Dreams brand, represents another listed company under the distributing giant’s belt. Wisynco currently distributes for Caribbean Cream Limited which sells Kremi branded products, Pan Jamaica Group’s St Mary products, and some Unilver PLC products. Wisynco will become the exclusive distributor on November 1 for Jamaican Teas with both company’s principals sharing the same last name.

The new tea portfolio addition comes several months after some of the Ekaterra products including Lipton and Red Rose products that Wisynco distributed went to another regionally listed distribution company in December 2022.

“Wisynco is one of the largest distributors in Jamaica and they go directly to all the small shops, restaurants, hotels, pharmacies, schools and a lot of institutions. So, they go to thousands of locations. They are one of the few distributors in Jamaica that do all of those stops. We believe that it will be good for Jamaican Teas and we’re looking to see 18 to 20 per cent increase in our domestic sales as a result of this [agreement],” said Jamaican Teas Chief Executive Officer (CEO) John Mahfood in a call with the Jamaica Observer on Monday.

Jamaican Teas had used Amalgamated Distributors Limited (ADL) for more than a decade as its local distributor with its founder and Managing Director Marcos Dabdoub sitting on the company’s board of directors from May 2010 until July 2017 when he resigned. Jamaican Teas’ 2022 audited financials revealed that ADL had transacted $563.09 million worth of business with Jamaican Teas in 2022.

Marcos was the tenth-largest shareholder of Jamaican Teas at the end of June with 31.40 million shares or 1.45 per cent of the company while ADL held 6.25 million shares. ADL is also the fifth-largest shareholder in Jamaican Teas subsidiary QWI Investments Limited with 30.23 million shares or 2.21 per cent of the shares.

AMCO is set to take over as exclusive distributor from Kelvin Ghany Enterprises Limited in the twin-island republic effective September 25. AMCO is owned by Ansa McAl Limited which is one of the largest family-owned conglomerates in the region with more than TT$6.53 billion or US$1 billion in annual revenues.

“So, the distributor in Trinidad is part of the Ansa McAl group which is the largest group in the Caribbean. They’re very big in Trinidad, but we have other distributors in the Caribbean. In Barbados, we have the Massy Group; in St Lucia, we have the Massy Group and in each of the other islands, we have different distributors. So, the new distributor is only for Trinidad,” Mahfood added about the regional growth partnerships.

Sixty-four per cent of Jamaican Teas’ manufacturing sales are derived from foreign markets which translated to $952.16 million for the nine months up to June 2023. The company generated $545.08 million in local manufacturing sales while it also derived $543.26 million from retail sales related to its Bay City Foods subsidiary.

For the overall nine months, Jamaican Teas’ revenue was up 12 per cent to $2.05 billion with consolidated net profit improving 18 per cent to $227.65 million. However, net profit attributable to shareholders marginally moved up from $186.32 million to $191.81 million. Total assets stood at $5.08 billion with equity attributable to shareholders at $2.86 billion.

Jamaican Teas listed on the Jamaica Stock Exchange (JSE) in July 2010 where it solely focused on manufacturing teas. More than 13 years later, Jamaican Teas has a subsidiary focused on investments in the form of QWI, has a real estate focused business called H Mahfood & Sons Limited, a retail business with Bay City and now a new manufacturing specific subsidiary called Caribbean Dreams Foods Limited (CDF).

CDF was incorporated in August 2021 as part of plans to spin-off its manufacturing business into a separate company which would then have a partial offer for sale and list on the JSE. However, the company is still facing hurdles in getting operational, which relates to the transfer of certain agreements in place with several counterparties.

“We were hoping it would start October 1, but there’s two final arrangements that we have to put in place. One of them is to get the USFDA (United States Food and Drug Administration) to approve Caribbean Dreams Foods. So, we may not make the October 1 deadline for us to start Caribbean Dreams Foods, but it will certainly be before the end of this year that we’ll start. The intention is to operate the company as a stand-alone company for six months or so and develop a track record, so that we can then approach the stock market,” Mahfood explained in his update on the planned spin-off which will leave Jamaican Teas as a holding company.

Jamaican Teas completed its Belvedere real estate development in Red Hills recently and sold six out of the 30 units, but Mahfood lamented the impact higher interest rates has had on sales of the $800-million investment. While Mahfood believes that the company will complete sales within the next six to nine months, he noted how higher interest rates has effectively excluded many individuals from being qualified for purchasing the development.

“When we get the cash coming from Belvedere, that will give us about $800 million that we can use towards looking at acquisitions. So, what we’re now focused on is looking at opportunities in the manufacturing sector to be able to look at companies that are compatible with us, have a product that can be exported. That, I think, is the big move in the next 12-15 months, is to take the resources from the real estate development and put it into manufacturing,” Mahfood highlighted, regarding the potential for acquisitions which will also focus on family-owned businesses looking to sell.

Jamaican Teas has not paid a dividend since 2021 while its subsidiary QWI has also not paid a dividend since 2022. The company’s stock price is also down 23 per cent year-to-date to $1.95 which leaves it with a market capitalisation of $4.22 billion. Also, Dianna Blake-Bennett, who joined in November 2021, will resign at the end of this month as CEO of CDF/JAMT’s manufacturing division.

However, Mahfood is confident about future sales, especially as the company gets ready to move to Temple Hall by January for its new 60,000 square-foot factory space on three acres of land. He also noted that the company is seeing relative normalcy with its supply chain and will be working to reduce its $603.33-million inventory by $100 million which represents excess.

“We expect significant improvement in our sales for next year as a result of the appointment of these new distributors and the new factory. Dianna has resigned effective the end of this month. I will be going back in full-time assisted by Charles Barrett and my son, Jonathan Mahfood. We’ll be in that process of trying to bring these guys up during the next year so that we can look at succession for myself,” Mahfood closed.