HONEY Bun Ltd started selling its rum fruit cakes in the United Kingdom-based ASDA Groceries which supported the tripling of its exports year-to-date.
The company also plans to test the market with two new undisclosed products in 2015.
“For the first two months of this fiscal year (October and November), exports have already increased by over 350 per cent. The Buccaneer Jamaica Rum Fruit Cakes were exported to the UK in November and are available in ASDA this year for the first time and we plan to continue on our increase in exports,” Michelle Chong, co-founder and chief executive at Honey Bun, told the Jamaica Observer in an e-mailed response to Business Observer queries.
ASDA, owned by Walmart, is the second largest UK supermarket chain by marketshare and operates in over 550 locations. The Honey Bun export explosion for its first quarter 2015 comes within the context of exports increasing 62 per cent in 2014 over 2013.
Honey Bun, which received the Jamaica Manufacturers’ Association award for Champion Exporter in the small category, indicated the growing exports would offset challenges faced in an austere local environment.
Honey Bun posted $23.4 million in profit from $741 million in sales for its September year-end or one-third less profit year-on-year.
“For the last two years, Jamaica has faced significant challenges in our economy with reduced spend in the local market and high inflation of input costs. We are optimistic that with reducing world market prices on major commodities we will benefit financially in 2015,” Chong said.
Oil prices dipped 45 per cent over six months to US$58 a barrel, which translates to electricity savings for manufacturers connected to the oil-fuelled power grid. Wheat commodity prices are currently on the rise since September, but are still roughly 20 per cent lower than 2014 highs in March this year.
Chong added that another major challenge faced by the company in 2014 was its unplanned distribution costs.
“There was a major independent distributor who experienced significant problems, for which we had to provide unexpected distribution expenses. Further to this, two of our main transportation vehicles suffered from serious accidents in 2014 which resulted in the leasing of vehicles which increased our distribution costs significantly. We have subsequently reduced most of the costs associated with the independent distributor and the two vehicles are up again,” she stated.
The company’s cash flow and equivalents position at $5.1 million for its year-end dipped from $64 million a year earlier due to the purchase of two real estate properties at 22 and 24 Retirement Crescent, beside the manufacturing plant at number 26.
“These purchases would have accounted for the reduction in cash flow,” Chong stated. “Profits from this year will replenish our cash reduction.”
Over the last two years, the company developed a strong information technology platform which includes distribution software and trend and predictive software.
“With this infrastructure in place, the company is focusing on several opportunities to move forward with three times the property space that existed the year before and a good portion currently not yet being utilised,” she said. “All these foundational structures will support Honey Bun in its progress moving forward. Our strategy is one of building sound foundations on which to expand.”
The company’s shares were listed on the Junior Market of the Jamaica Stock Exchange in June 2011.