(File photo)

Derrimon Trading writes a new playbook in the pandemic

(File photo)

Derrimon Trading Company Limited (DTL) has followed quite the unusual playbook for navigating the COVID-19 pandemic — expanding to new markets while others have been hunkering down and waiting for the crisis to pass.

In early March 2021, the company completed the acquisition of a controlling stake in Food Services New York, Inc and Good Food for Less for US$8.9 million, financing the deal with proceeds from an additional public offer (APO) floated in February of this year.

As a result, the company now has a much bigger operation, both in business lines and geographic spread.

Chairman and CEO Derrick Cotterel believes the strategy was a natural extension of the company’s ethos of seeking opportunities in a crisis.

Chairman and CEO of Derrimon Traders Limited Derrick Cotterel
(Photo: Jamaica Observer)

“Our mindset has always been to look at the opportunities. Some companies saw [the need under COVID-19 conditions for] consolidation and cost-cutting. We began to run scenarios before it (Covid-19) came to Jamaica,” he told Caribbean Business Report.

“We realised food would be critical. We had to ensure sufficient inventory. Our mindset was to look for the opportunities Covid would bring up. As it evolved we realised online shopping would be more useful, so we ramped that up,” the CEO continued.

However, he noted that the company was caught off-guard by the lockdown of St Catherine last year, when Jamaica had its first spike in cases, and so “tried to be nimble to react to what was happening in the market.

“With Caribbean Flavors and Fragrances we recognised there was a huge need for sanitisers and we had a base. In less than 24 hours we made the decision and had the product on the market, ready to bottle and send to trade,” he explained.

The group also adjusted its supermarket and wholesale operations, staggering the work hours for staff, to ensure that none of its facilities would close. And when some team members came down with the virus, the company’s strategy was to isolate and test, ensuring business continuity.

Growing Derrimon Trading Limited

DTL, which was founded and incorporated in 1998, started out distributing everyday consumer items to various supermarkets and wholesalers in the Kingston Metropolitan Area. The main activities of the company include wholesale (Sampars Cash & Carry) and bulk distribution of household and food items, including meat products and beverages; and the retailing of those and other food and meat products through other outlets and supermarkets. 

The company listed on the Junior Market of the Jamaica Stock Exchange on December 17, 2013, after having raised JM$150 million in its initial public offer. At that time, Derrick Cotterell, his wife Monique, and mother Monica, remained the controlling shareholders.

Consequent on the APO earlier this year, Barita Investments Limited became a 20 per cent shareholder in the company.

Prior to the APO, DTL acquired two new ventures in New York, which have since joined DTL’s other subsidiaries in Jamaica, including Caribbean Flavors and Fragrances (CFF), a manufacturing operation; Woodcats International Limited, which makes wooden pallets; and supermarket Select Grocers.

Select Grocers Supermarket in St Andrew, Jamaica, is one of Derrimon Trading’s portfolio companies in Jamaica
(Photo: Paul Allen/Caribbean Business Report)

The company incorporated a New York subsidiary, Marnock LLC, to acquire the New York-based operations FoodSaver NY, a wholesale food distributor located at 402 East 83rd Street in New York, across from the Brooklyn Terminal Market which carries a full line of grocery supplies and produce; and Good Food For Less, LLC, a specialty supermarket.

FoodSaver NY’s meat-processing facility is USDA certified and serves both standard and custom cuts of meat as well as fresh fish and frozen seafood. That company has been in operation for over 23 years and is a recognised and reliable wholesale food distributor to restaurants in the New York tri-state area.

Good Food’s products are tailored to the needs of the African and Caribbean diaspora located in the New York tri-state area.

The acquisitions were expected to boost company revenue by over JM$400 million annually. At the year-end December 31, 2020, DTL’s revenue grew by 36 per cent over the same period in 2019 to record JM$12.6 billion. Net profit rose by 16.7 per cent to JM$290.7 million

DTL’s next chapter

When Caribbean Business Report asked Cotterel if DTL has closed the chapter on acquisitions for now, he responded, “We are getting organised in NY; however, there are some other businesses that will complement our operations there. There are some opportunities we are seeing.  We are always looking at opportunities that make sense so we can give investors their money’s worth. There is nothing in the pipeline now but we are not keeping our eyes closed.”

He added that the due diligence process that led to the acquisitions in New York was a long one, partially halted by the pandemic, but continued until the rewarding end. In terms of the lesson learnt from the process, the CEO said there wasn’t much the company could have done differently, having begun in February 2020 but could not return to New York until October.

Cotterel also pointed out that he hopes DTL will recover the investment over the next five years.