Caribbean Cream Limited (Kremi) is poised to significantly enhance its operational efficiency and reduce costs, with the completion of a new water well at its Kingston plant. The well, which is currently being drilled, is expected to provide the ice cream company with a reliable and independent water source, freeing it from reliance on the National Water Commission (NWC).
CEO Christopher Clarke shared the company’s optimism about the well’s impact during the company’s annual general meeting on Tuesday, explaining that drilling is nearing completion, with water testing set to begin soon. He anticipates that within three months, the company will fully transition to using its own water supply. “We expect to be completely independent of the NWC within three months,” Clarke told the Financial Gleaner.
The well taps into a naturally occurring aquifer and can supply water at a rate of 50 gallons per minute, sufficient to meet the company’s substantial water demands. The total cost of the project is $50 million, and it is expected to save Caribbean Cream approximately $2 million per month, reducing the company’s water expenses significantly.
Water usage is a critical concern for Caribbean Cream, which operates a water-intensive plant, consuming up to 36,000 gallons per day. The company typically spends around $25 million annually on water, a figure that can rise during drought periods when water must be trucked in.
In its latest unaudited financial results for the six months ending in August, Caribbean Cream reported strong growth, with a 39% increase in gross profit compared to the same period in 2023. Gross profit for the half-year was $541 million, up from $390 million in 2023. Revenue also saw a boost, rising to $1.5 billion from $1.3 billion last year. However, operating expenses increased by 31% to $498 million, reflecting the costs of ongoing capital improvements.
Clarke attributed some of the increase in expenses to the company’s ongoing investment in upgrading its facilities and systems. “Over the past few years, the company has heavily invested in capital expenditure projects financed through loans. In the short term, this may negatively affect cash flow, but we expect improved returns on these investments as the company grows,” he said. Notable improvements include a new cold room and blast freezer, which were commissioned last year.
Looking ahead to the holiday season, Clarke assured shareholders that the company is well-prepared to meet demand. “With increased capacity from the cold room and blast freezer, we don’t need to stock up as much as we needed to in the past,” he said, ensuring that Kremi ice cream will be readily available for the Christmas season.
Caribbean Cream, which employs approximately 150 people, produces a variety of frozen treats under the Kremi brand, including bulk ice cream, ice cream tubs, frozen novelties, and ice cream cakes.
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