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Canco expanding exports markets into Canada
Published: Wednesday | November 10, 2010 0 Comments and 0 Reactions
Linstead Market Jamaica products made by Canco Limited.
Avia Collinder, Business Writer Canco Limited, which cans food products under the Linstead Market Jamaica label, is finalising a distribution contract for its products in Canada, which is set to be inked by year end.
The deal is the culmination of a five-year foreign market push, which has involved investment in research as well as development and equipment upgrades by the Seaforth, St Thomas, operation, costing J$25 million.
Canco will, starting next year, also spend another $20 million to sell new products including guava jelly, guava jam, mango chutney, pepper jelly, red pepper sauce, scotch bonnet pepper sauce and jerk seasoning on the American continent and Europe.
The 25 year-old company also produces canned ackees, callaloo, breadfruit slices, red peas and gungo peas in seasoned coconut milk, ready-to-[COLOR=blue !important][COLOR=blue !important]eat[/COLOR][/COLOR] red peas, gungo peas and pepperpot [COLOR=blue !important][COLOR=blue !important]soup[/COLOR][/COLOR] from its 13,000 square foot factory.
The company employs 60 permanent staff, but the number of workers swells to 220 in high season, its management told Wednesday Business.
Some 95 per cent of its total annual output of up to 40,000 cases of products, is exported.
Chairman Norman McDonald said sales volumes to Canco's primary market in the United States, comprising 90 per cent of sales, have remained constant in the last two years.
However, he said, value has fallen by 4.5 per cent because of foreign exchange movements.
Market diversification, first in Canada and then in Europe, is intended to improve sales by 20 per cent over an 18 month period. The money invested in research, development, staffing and marketing is expected to be recouped in three years.
The Canadian market was first explored in 2000, but entry was later suspended as the company sought to focus on growing its presence in the US.
"Canada is a sophisticated market (and) cuisine is a big thing there," McDonald said.
"We expect to sell Cdn$500,000 worth of products in the next 18 months, which will in turn improve our total sales by between 15 to 20 per cent."
Cash flow
Seventy per cent of the money used for capacity building at the company came from the business' cash flow with the remainder coming from local banks and a number of grants including from the European Union Banana Fund.
Over the last five years, the firm has faced challenges including limited access to capital, with McDonald noting that it has taken as long as six months to negotiate a bank loan.
Another problem cited by McDonald is the bureaucracy associated with maintaining duty free status for imported raw materials - a problem that arose after a company shipment of duty-free goods, mistakenly, he said, included one item that was not, resulting in Canco being fined J$180,000. Canco is appealing, he said.
The company has doubled its production, and anticipates ramping up volumes even further once the Canadian distribution deal kicks in.
The United Kingdom market, which currently takes only 10 per cent of output, and then the wider Europe, are also expected to help boost output further.
Canco has taken care to safeguard its intellectual property in overseas markets - registering its products in Canada, the US and Europe.
The company was one of the first local entities to be certified by the United States [COLOR=blue !important][COLOR=blue !important]Food[/COLOR][/COLOR] and Drug Administration to manufacture and export canned ackees to the US after the lifting of a long-standing ban.
According to the chairman, development funds have also been invested in international product certification. This, he said, was done in preparation for the planned market expansion.
Canco initially marketed its products under the Country Choice brand, but later rebranded under the name, Linstead Market Jamaica, which it hopes will get better recognition among Jamaicans and other Caribbean nationals.
The planned marketing push is expected to take production to near the full operating capacity at Canco.
"We spent all of our lives being a production company and it has now become clear that we need to market ourselves," McDonald said.
austanny@yahoo.com
Published: Wednesday | November 10, 2010 0 Comments and 0 Reactions
Linstead Market Jamaica products made by Canco Limited.
Avia Collinder, Business Writer Canco Limited, which cans food products under the Linstead Market Jamaica label, is finalising a distribution contract for its products in Canada, which is set to be inked by year end.
The deal is the culmination of a five-year foreign market push, which has involved investment in research as well as development and equipment upgrades by the Seaforth, St Thomas, operation, costing J$25 million.
Canco will, starting next year, also spend another $20 million to sell new products including guava jelly, guava jam, mango chutney, pepper jelly, red pepper sauce, scotch bonnet pepper sauce and jerk seasoning on the American continent and Europe.
The 25 year-old company also produces canned ackees, callaloo, breadfruit slices, red peas and gungo peas in seasoned coconut milk, ready-to-[COLOR=blue !important][COLOR=blue !important]eat[/COLOR][/COLOR] red peas, gungo peas and pepperpot [COLOR=blue !important][COLOR=blue !important]soup[/COLOR][/COLOR] from its 13,000 square foot factory.
The company employs 60 permanent staff, but the number of workers swells to 220 in high season, its management told Wednesday Business.
Some 95 per cent of its total annual output of up to 40,000 cases of products, is exported.
Chairman Norman McDonald said sales volumes to Canco's primary market in the United States, comprising 90 per cent of sales, have remained constant in the last two years.
However, he said, value has fallen by 4.5 per cent because of foreign exchange movements.
Market diversification, first in Canada and then in Europe, is intended to improve sales by 20 per cent over an 18 month period. The money invested in research, development, staffing and marketing is expected to be recouped in three years.
The Canadian market was first explored in 2000, but entry was later suspended as the company sought to focus on growing its presence in the US.
"Canada is a sophisticated market (and) cuisine is a big thing there," McDonald said.
"We expect to sell Cdn$500,000 worth of products in the next 18 months, which will in turn improve our total sales by between 15 to 20 per cent."
Cash flow
Seventy per cent of the money used for capacity building at the company came from the business' cash flow with the remainder coming from local banks and a number of grants including from the European Union Banana Fund.
Over the last five years, the firm has faced challenges including limited access to capital, with McDonald noting that it has taken as long as six months to negotiate a bank loan.
Another problem cited by McDonald is the bureaucracy associated with maintaining duty free status for imported raw materials - a problem that arose after a company shipment of duty-free goods, mistakenly, he said, included one item that was not, resulting in Canco being fined J$180,000. Canco is appealing, he said.
The company has doubled its production, and anticipates ramping up volumes even further once the Canadian distribution deal kicks in.
The United Kingdom market, which currently takes only 10 per cent of output, and then the wider Europe, are also expected to help boost output further.
Canco has taken care to safeguard its intellectual property in overseas markets - registering its products in Canada, the US and Europe.
The company was one of the first local entities to be certified by the United States [COLOR=blue !important][COLOR=blue !important]Food[/COLOR][/COLOR] and Drug Administration to manufacture and export canned ackees to the US after the lifting of a long-standing ban.
According to the chairman, development funds have also been invested in international product certification. This, he said, was done in preparation for the planned market expansion.
Canco initially marketed its products under the Country Choice brand, but later rebranded under the name, Linstead Market Jamaica, which it hopes will get better recognition among Jamaicans and other Caribbean nationals.
The planned marketing push is expected to take production to near the full operating capacity at Canco.
"We spent all of our lives being a production company and it has now become clear that we need to market ourselves," McDonald said.
austanny@yahoo.com