Ice cream company IPO this month
Ice-cream manufacturer Caribbean Cream Limited (CCL) will go to the market this month with an initial public offering to raise between J$60 and J$80 million of equity to assist the company in its expansion drive.
Mark Croskery, president and chief executive officer of Stocks and Securities Limited, lead broker and arranger of the offer, said the shares will be priced between J$0.80 and J$1.10.
But he said he was unable to disclose the amount of shares to be offered on the market until the release of the prospectus.
CCL, a manufacturer and distributor of ice cream and ice cream products, operates under the brand 'KREMI', and was incorporated in 2006 by its current chief executive officer Chris Clarke.
The company manufactures 20 different flavours of ice cream in three-gallon, 1.5 gallon and quart sizes, as well as three flavours of ice cream cakes.
The company is also the local distributor of the Flavorite brand of frozen novelties from Trinidad.
The funds from the IPO will be used to help finance the company's expansion as well as for general working capital.
"Currently 80 per cent of our sales is from bulk ice cream, said Clarke. We see room to grow into the supermarket segment, although we are in it but not very strong," he said, adding that "we expect to grow that side of the business."
Clarke said some of the funds will also be used to purchase new equipment for its operation. He said there is also the intention to purchase a cold storage room, that is, a large freezer to store finished products.
Currently the companys storage freezer has the capacity to hold 5,000 boxes of three-gallon ice cream. The new freezer, he said, will increase storage capacity by five times that amount.
He also said the company plans to acquire a new blast freezer, which will cut down freezing time for its product from 14 hours to 10 hours.
The ice cream plant produces 30,000 gallons of ice cream weekly, but Clarke said he wants to expand.
"Our plant operates at full capacity now and we want to move to the next phase of production so as to increase output by about twice that level," he said.
CCL operates a manufacturing plant on South Road, Kingston 5, as well as a distribution plant in Montego Bay, St. James.
Among its competitors in the local market are Crazy Jim and Häagen-Dazs.
It will be the first ice cream company to list on the junior market of the Jamaica Stock Exchange, which currently has a register of 16 companies.
The IPO is set to open later this month and close some time in April.