After much prodding from Naomi Garrick, the head of the firm which does public relations for Derrimon Trading, I relented on Monday to do the story about the beginning and growth of a company which started with nothing and is now worth $12.6 billion. It’s a story of failings, faith and determination. For Derrick Cotterell, the chairman and CEO, the success of the company, named after himself and his wife Monique, is down to divine will. Told by himself and Chief Financial Officer Ian Kelly, I hope you enjoy reading it as much as I did hearing it.
“We started the business in 1998, December 1998 to be exact,” Cotterell told the
Jamaica Observer about the genesis of Derrimon Trading. Cotterell started to supply sugar to a manufacturer of syrup after leaving GraceKennedy where he worked previously. “After I left GraceKennedy, a friend of mine suggested that I should start trading, so he gave me a US$50,000 line of credit to get started,” he added. Cotterell said even with the line of credit, he didn’t have the money to clear the first container of sugar he was importing for the manufacturer and had to borrow the $100,000 it would cost from “a friend and customer”.
“It was one container at first and when I brought back the money to her, she gave me back the money and said, ‘You are going to need more money to clear more containers’.” That, Cotterell said, continued for “a couple of years” until he insisted for her to accept repayment.
From sugar, Cotterell said the company ventured into importing red peas and corned beef. At that time, it was himself and a single employee.
But two years later, when his father died, Cotterell said his attention was pulled from his own business to his father’s business — a petrol station in Cross Roads, St Andrew. “I had to concentrate on that business, it was not in the best shape. So I paused trading and started to concentrate on the gas station.”
With that decision, Cotterell said he left the other employee as the sole person to run Derrimon Trading with grave consequences.
“As life would have it, my one employee misappropriated some funds, so the company was then basically bankrupt. With I not being there on a day-to-day basis, watching the sales and the collections, he collected the money and used the money, [putting] it in some silly investments and lost all the money.” That was in the year 2000. With the money still due to be repaid to the supplier, Cotterell said he took a bank loan and cleared the company’s debt and paused the operations of Derrimon Trading.
The year after in December 2001, he said his wife had a child and he told her then that when she returned to work from maternity leave, she would be running her own business. At that time, his wife was working at a stationery company, and shortly after returning to work in 2002, her boss handed over the business to her. “And so Derrimon Trading had its re-emergence as a stationery business in 2002.”
The company then was at the Empire Plaza in Cross Roads. Cotterell said then, the company operated from one desk “in a friend of mine’s office.” But it was an upgrade from a “suitcase company” operated from his father’s gas station.
Luck would have it that same year with Derrimon Trading getting its first big distribution contract from Nestle in October 2002.
“I always say to the Lord that when I am restarting Derrimon [for trading], I want to get some products that are household names and I was at the gas station one day when someone came there and said, ‘You know Nestle looking for some distributors. Why you don’t apply.’ I asked for the name of the person at Nestle to call, made the call and within two weeks I was the distributor for Kingston, St Catherine and St Thomas.” With that distribution contract, Cotterell said he was pulling in about $1 million each month delivering Nestle products. For him, it was the start of the new Derrimon and what it would look like.
Then he got a wholesale downtown Kingston with the back used for storing goods for distribution. At the Cross Roads office at the stationery business, a single desk shared between himself and his wife was inadequate. Cotterell then got his own desk, but in the same cramped office. Derrimon was now a distribution and stationery business.
With the Nestle contract, it was time for expansion. The business moved from having one truck to two trucks. Cotterell said these would break down often, but never with goods in them. “Always only when they are coming back,” he exclaimed. “God is good.”
By 2003, the company had grown, requiring its own office at Empire Plaza. By 2006, more structure was brought to the business when a friend joined the company and more people were hired. From $1 million per month distributing Nestle products in 2002, Derrimon was now distributing between $25 million and $30 million per month worth of products four years later. But the warehouse was still at the back of the wholesale in downtown Kingston.
Seeking other products to distribute, Derrimon Trading started importing and selling rice. More space was needed as well and a 3,000-square-foot warehouse was found at Ashenheim Road in St Andrew. By 2009, Sampar’s was offered to Derrimon Trading, giving the company a foothold in the retail business, and “as divine intervention would have it, the warehouse beside Sampar’s (Marcus Garvey Drive) [was] available, which was 30,000 square foot. That was huge, when we put the goods in the warehouse, it ‘kotch up inna one corner’. It was lost. We could play football and cricket in that warehouse together and not disturb the goods,” he reflected. But he was certain he would be able to expand to fill the warehouse.
The company formed a board in 2006, but improved it in 2009. The current Chief Financial Officer Ian Kelly, who was a banker at RBTT, then joined the entity. “When he joined in 2011, Ian and I actually shared the same desk until we could get him his own office.” Cotterell said Ian’s remit was to prepare the company to list on the Junior Market of the Jamaica Stock Exchange, which was achieved in December 2013. Months later in 2014, a 49 per cent stake was bought in Caribbean Flavours and Fragrances and another 26 per cent was bought later. “By that time we had a few more Sampar’s,” expanding into seven locations across the island. It then introduced its Select Grocers retail store in Manor Park. Another is slated to open this summer in May Pen, Clarendon.
More acquisitions were to follow. In 2018, Derrimon Trading acquired Woodcats, a Kingston-based company that makes wood pallets. Then last year in the middle of the pandemic, Food Savers and Good Food for Less, two supermarkets were acquired in Brooklyn, New York. Then Spicy Hills Farms was acquired earlier this year and more recently, Arosa, a St Ann-based entity which distributes wines and meats chiefly to the hospitality sector.
“Most of these acquisitions, when we started, we had no money, we think about the money after,” Kelly shared. “I remembered the first acquisition, which was Sampar’s Boulevard. We signed the deal and raised the money two days after. Woodcats we bought without any money. Caribbean Flavours and Fragrances we bought with no money,” Kelly continued. He said they dealt with the corporate governance first, not hiding from debtors. “We pay our staff and we pay our debt,” said Kelly.
For Cotterell and Kelly, Derrimon Trading was developed from a vision and guided by the divine. It has grown in 20 years from a suitcase company to a multi-billion dollar entity in acquisition mode and looking to expand outside Jamaica.