Wisynco sells $24 billion worth of products annually, but just a fraction comes from markets overseas.
But now that the manufacturing and distribution conglomerate has added new production and storage capacity and has wrapped up its expansion and post-fire consolidation programme, Wisynco has set itself the goal of growing exports sevenfold, from the current 1.4 per cent of total revenue to 10 per cent in three years.
“We currently export the brands into USA and Canada; and do production for Bigga in the United Kingdom. We also export in the Caribbean, all the way down to Trinidad and up to the Northern Caribbean,” said Wisynco Chairman William Mahfood.
“The hope is that with present growth [in exports] of 25-35 per cent, we will see a significant improvement,” he said at the company’s annual general meeting on Tuesday.
Speaking later with the Financial Gleaner, Mahfood said Wisynco’s proprietary Bigga soft drinks and CranWata flavoured water are produced by a manufacturer in the United Kingdom, whom he declined to name for competitive reasons. The UK partner has been granted a licence to bottle and distribute the brands, he said, an arrangement that began in 2013.
Wisynco also has an arrangement with Enco to distribute its beverages in the UK and European markets, but Mahfood declined to go into the specifics of the arrangement, which was struck five years ago.
Enco is owned by food and financial services conglomerate GraceKennedy Limited and operated by subsidiary company GraceKennedy UK.
Asked about the partnership with Wisynco, Group CEO of GraceKennedy Don Wehby says it aligns with his company’s philosophy of leveraging its strength in foreign markets to assist other Jamaican operators.
“I’ve said it to my colleagues that not because you compete with us in the Jamaican market, that you can’t work with us; because the truth is that with GraceKennedy’s distribution strength in places like the UK we are willing to work with the Wisyncos or Lascos and Seprods of this world to distribute their products overseas,” Wehby said, while confirming the existence of similar distribution arrangements with other Jamaican companies.
In the past two years, Wisynco has pumped $5 billion into rebuilding and expansion, including US$12 million ($1.54 billion) in production lines, in the wake of a fire at its St Catherine base. Some of those funds have also been poured into cold storage facilities, expanded warehousing and packaging.
With the two new lines, the company now operates six fully automated production lines.
“With the new cost-competitive packaging we can now compete against any manufacturer out of the United States or anywhere else for that matter in a very aggressive way and that is why I think there will more opportunities in the next few years,” Mahfood said.
He sees the Caribbean and UK markets as the easier targets due to the logistical and manufacturing arrangements already in place in those zones, including the arrangements with Enco and the contract manufacturer.
Mahfood also told the Financial Gleaner that the company’s export department has been expanded in line with its new strategy, and that already Wisynco has seen a small uptick in the contribution of export earnings for the group to 1.8 per cent so far this fiscal year, which for the company began July 1.
Wisynco owns and produces five beverage brands, and it also bottles foreign brands under licence, including Coca Cola, Sprite, Minute Maid and Scwheppes. Its distribution portfolio spans more than 4,000 products.
CEO Andrew Mahfood told shareholders that Wisynco’s revenues have climbed from $14.2 billion in 2014 to $24.5 billion in 2018, for a four-year compounded annual growth of 14.5 per cent.
He says this was driven by investments in production capacity, product innovation and organic brand growth; while noting that future income would also be boosted the distribution arrangements for juices made by Trade Winds Citrus and sugar and rum produced by Worthy Park Estate. Wisynco has taken ownership stakes in both companies as part of those distribution partnerships.
Andrew Mahfood says that of the revenue booked by the company, 78 per cent are from brands under the full control of Wisynco, while the rest comes from distribution arrangements.
Additionally: “63 per cent of all revenues come directly from products that we own …,” he said.
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