Product adjustments, widening clientele keep CFF’s earnings steady
New business gained in Trinidad & Tobago and the Dominican Republic, along with adjustments in a few of the raw materials used in its products, helped Caribbean Flavours and Fragrances Limited, CFF, to maintain second quarter 2022 earnings at $24 million.
The company, which has been working to triple its earnings outside of Jamaica to 30 per cent, managed to secure new business in the region during the quarter while maintaining its current customer base, despite supply chain bottlenecks and rising raw material costs which have been threatening its ability to store adequate inventory.
CFF is on the hunt for more international business customers to sell its line of flavours and fragrances to. But this quarter the company found itself working closer with existing customers on adjustments in the raw materials used in some of the flavours from difficulties being faced by the company to source inputs for its production process.
“For materials that were short on the world market or for those that have had exponential price movements, what we have done is to reformulate the product, test it to ensure that it behaves in the same way, let the customers do their tests and then once we’ve had the sign off we go ahead and have them use the reformulated product,” Product Development Manager at CFF, Rhonda McFerguson, told the Financial Gleaner.
The product line most affected by the supply chain bottlenecks and the rising costs is the flavouring segment. The raw materials affected are all imported products.
“So far what we have done is to switch suppliers or to switch one product for another. The response from our clients has so far been good and so we may continue employing this strategy if it’s deemed necessary,” she said.
For the quarter, CFF grew revenues 11 per cent when compared to the three months up to June 2021. Earnings rose less than a 1 per cent to $24.3 million. CFF six months performance showed that revenues had grown to $360 million, making it the company’s best half year performance to date.
Earnings for the half year rose to $44.75 million, up 8.55 per cent on the similar period of 2021.
“We are proud of our performance during the first half of the year which has been marked by heightened uncertainty and constantly evolving dynamics in a time of rising inflation and interest rates within our markets and many markets we serve,” CFF said in the preamble to the financial reports.
CFF, whose product portfolio spans flavourings for beverages including syrup, sanitisation fragrances, baking and ice cream additives, and essential oils, currently has a foothold in home market Jamaica, Barbados, St Kitts-Nevis, Trinidad & Tobago, Guyana, Grenada, Suriname, Canada, and the Dominican Republic.