Wed | Nov 14, 2018

Nature Teas start-up dominates JSE pitch room

Published:Friday | January 22, 2016 | 12:00 AMSteven Jackson

Nature Teas, a hot beverage start-up which proposes to launch products locally and overseas, beat out companies that already are racking up hundreds of millions in sales to win the JSE pitch room on Wednesday.

The young entrepreneurs won $300,000.

"This will allow us to finalise the process of commercialisation," Nature Teas Director Samantha Williams told the Financial Gleaner.

Elated company founder, Jordon Freeman mirrored the comments of his director. "Whatever she said that's good!"

Nature Teas aims to initially manufacture four teas which contain natural sweeteners.

"You only need water," said Freeman in his pitch at the Jamaica Stock Exchange annual capital markets conference held at The Jamaica Pegasus hotel in New Kingston.

The company has interest from two distributors.

Nature Teas is ultimately seeking an investment of $2.7 million for 15 per cent of the company.

"We have invested 800,000 to date," said Freeman in his presentation, adding that the company expects sales of $18 million for the first year with profit of some $7 million.

The tea maker beat out Federal Transformer Manufacturing & Consulting Limited, a start-up which refurbishes transformers for power utility Jamaica Public Service Company (JPS). Servicing these transformers locally will obviate the need to ship them to Canada for repairs. This benefits JPS and the local economy.

Federal wants $60 million of investment to relieve the company's reliance on debt and free up its cash flow. The company wants the cash to quickly fill JPS back orders and to expand regionally.

Dr Karl Reid, who pitched on behalf of Federal, explained that the same model can be replicated regionally. "The company plans to capture this regional market in six to seven years."

Federal projects first-year sales of $401 million, increasing to $760 million in the second year.

"We are an $800-million company today," Reid indicated, based on a valuation which takes into account future cash flows.

Other companies that pitched were Ctrl-IT, Panache Spa, World of Reggae and Big Red Farms.

This is the fourth instalment of the JSE pitch room, one of the most anticipated events at the annual JSE Investments & Capital Markets Conference.