ICE cream maker Caribbean Cream Limited, which trades as Kremi, is investing roughly $50 million into a well at its Kingston factory, marking a significant step in its drive to improve efficiency and reduce costs.

The project, designed to reduce the company’s dependence on National Water Commission (NWC), is expected to come on stream within three months and will provide it with a cost-effective supply of water, which is critical for its production, cooling, and cleaning processes.

“We’re drilling a new well as we speak. This is a big deal for us. There was a moratorium on wells that was lifted recently,” CEO Christopher Clarke told the Jamaica Observer at the company’s annual general meeting held on Tuesday, November 19 at Courtleigh Hotel in New Kingston, St Andrew.

“As we learned about that, we jumped into action. We applied for it and got permission to drill a well. They’re drilling the well right now as we speak, and I expect it to come online within the next three months. The payback period is very short — I expect it will pay for itself within a year,” Clarke added.

Kremi relies on an estimated 35,000 gallons of water daily, underscoring the importance of a consistent supply to its operations, Clarke told the Business Observer. The project is being financed through its cash flow.

“By having our own source we’re ensuring efficiency and resilience as we continue to grow,” he said.

The well project follows several significant upgrades as Kremi continues to align its operations with long-term growth plans. Earlier this year, the company installed a combined heat and power (CHP) system at its Kingston factory, significantly lowering electricity costs while providing heat that could potentially be used for new product innovations.

“These measures are part of a broader strategy to drive efficiency while positioning us for sustained growth,” Clarke explained, adding that the CHP system is expected to recoup its costs within five years.

Kremi also tackled production constraints by upgrading its blast freezer and adding a new cold room, which has quadrupled pallet storage capacity. The improvements allow the company to better manage peak demand and maintain uninterrupted operations during maintenance periods.

“With the bottleneck now shifted to the mix plant, any future capacity expansions will require less time and investment, enabling us to respond quickly to market demands,” Clarke noted.

For the six months ending August 2024, Kremi reported a five per cent increase in revenue, reaching $1.3 billion, up from $1.2 billion in the same period last year. This consistent performance puts the company on a solid path toward achieving its ambitious $3-billion revenue target by 2025. Gross profit also climbed to $444 million, reflecting improved margins despite rising input costs — a sign that Kremi’s efficiency measures are paying off.

To sustain this momentum Kremi is focusing on strategic initiatives such as the well project, expected to come online by early 2025. The project is anticipated to cut operating costs significantly, enhancing the company’s ability to scale operations and drive profitability. Alongside this, Kremi plans to prioritise smaller, high-impact projects over large-scale capital expenditure, ensuring that resources are channelled efficiently to support growth.

The upgraded enterprise resource planning (ERP) system will be instrumental in these efforts, helping Kremi to streamline processes and make data-driven decisions as it advances toward its revenue milestone. “These investments reflect our commitment to balancing efficiency with growth, ensuring that we deliver long-term value for our shareholders while continuing to meet the needs of our customers,” Clarke said.