Salada looks to Africa
COFFEE and tea products maker Salada Foods is eyeing Africa.
“We are looking at the African market as another area of potential growth for us,” said Julian Rodney, Salada’s general manager. “Salada has no presence there.”
With a particular focus on West Africa, Rodney reckons that the similarity in taste profile to Jamaicans makes the market attractive.
Along with the company’s ability to offer competitive prices to the market, he figures that the fact that the Africa is growing economically is reason enough to go there.
Already, samples of products such as the 100 per cent ginger tea, which is in powdered form, as well as coffee have been sent to the area.
But in the meantime, Rodney said Salada is mainly looking at pricing and market research.
“Exports is certainly an area of focus for us,” he said.
As such, the medium-term objective is to export its entire suite of products to the US, UK and most recently, China.
“We are growing in the US and the UK, Rodney said. “Small exports are done in Continental Europe, we will grow it there and in China.”
There’s already coffee and ginger tea, and it hopes to export products from the range of canned juices and vegetables, as well as spices from the newly acquired Roberts brand.
“The Asian market is quite enormous, we are working with our distributors to open new territories and tackle there on a need basis,” he said.
Salada will give them (China) what they want, according to the general manager.
“They demand quality products at a competitive price. We know we make quality products over the last 50 plus years, hence our volumes into that market has been increasing since we entered two years ago.”
Salada acquired the assets and brand of Roberts, which is operated by the coffee makers’ new subsidiary, Mountain Peak Processors.
“It’s an indication that we have our eyes out and are open to adding to our food business,” Rodney said. “That’s totally different from what we’ve been doing over the years.”
Though Salada bought into Roberts, the plan is to retain the brand is already known. The Norwich Avenue-based, Roberts should be gaining revenues for Salada within six to eight weeks.
Modernisation of Roberts’s existing facility has so far been done.
“We at Salada will have the capital to improve the output.”
The main difficulty Roberts had was that it was undercapitalised, impacting its working capital, Rodney said.
“One of the things we’ve done to Roberts is ensure the infrastructure is up to standard,” he said.
Meanwhile, the company has been stacking profits on profits. For the three months to December 31, 2012, Salada’s profit after tax was 33 per cent more than the corresponding period.
Its annual report indicated that the company made net profit of $147.3 million, compared with $71.9 million in the previous year.
Though its bottom line speaks for itself, Rodney said Salada is always working to improve its efficiency.
Some efficiency was gained over the last year, and there were cost-saving measures from a utility standpoint, but the greatest improvement is efficiency is volumes, he said.
During the three months to December last year, Salada made $152.9 million in sales, 27 per cent more than the same period 2011.
“The more volumes you have going through a facility, the lower your cost per unit,” the general manager figures.
Salada’s principal activity is the manufacture and sale of instant coffee, roasted and ground coffee beans.
At its Bell Road headquarters, the company sorts, extracts, and dehydrates the beans to powder, also offering decaffeinated coffee.