Local cigarette distributor Carreras Limited said that while it will continue to actively pursue expansions within its core tobacco business, the company is not opposed to tapping into new opportunities in the cannabis dispensary market, preferably those medically related.
“One of the key things behind [this thought] though is that it has to be science-based. There is a lot of research taking place by British American Tobacco (BAT) [parent company of Carreras] as this is one of the things that we don't want to make a mistake with. It's an unknown territory so we prefer to have as much science and focus behind it, but when the time comes we are going to be there, because it's very difficult to have that product that is Jamaican as a whole and not maximise on it,” said managing director of Carreras, Raoul Glynn, while responding to questions at this week's staging of the Mayberry investors forum.
Glynn, however, said that while this was not the foremost objective for the company which is currently more focused on its transformational agenda, the outcome from ongoing research into the very lucrative product will help to determine his company's next move in this regard. This latest pronouncement follows previous ones in which the company at the time said it was not interested in venturing into the marijuana products market.
Carreras, which continues to pay over approximately $8 billion in tax revenues to government coffers said that despite the ongoing competition it continues to face from the illicit trade of cigarettes along with high taxes from government, its business continues to grow steadily even amid the challenges brought on by the novel coronavirus pandemic.
For its nine-month period ended last December, the cigarette marketing and distribution company owned by almost 50 per cent of local shareholders recorded a 10 per cent growth in revenues which amounted to $4 billion when compared to the same quarter in the previous year. As a result of the pandemic, the company also managed to cut its administrative and distribution expenses by 20 per cent over the period as it improved efficiencies. Last month Carreras paid a little over one billion dollars in dividends to shareholders in line with its dividend policy and commitment to returning value for investors.
The managing director said that while the company will continue to seek out new partnerships and expansion opportunities in the region, the build-out of its strong distribution footprint and proper development of the local market remains some of greatest concerns at this time.
“Right now the focus is Jamaica, I think the opportunity is there and we need to maximise that before we look at anything else,” he stated.
“Partnership is also a big part of our plans as we are currently managing certain elements of Proctor and Gamble's portfolio. Many other suppliers in the market are also [seeking] to piggyback on that strong distribution footprint that we have but there are so many opportunities in Jamaica currently and we're fulfilling that as we expand in certain areas,” Glynn added.