The Caribbean Bottling Company (Bahamas) is reporting a modest four percent rise in revenue this year, with perhaps more growth in 2013 based on new product lines. Since beginning operations at its new facility on Sir Milo Butler Highway in May 2011, the Coca-Cola producer has consistently expanded its product offerings. President and CEO Walter Wells told Guardian Business yesterday that the company is now producing Disani water in a full range of sizes. Whereas in the past, the bottler imported these water products, paying duty as high as 75 percent, local production eliminates this liability and ultimately makes it a profitable segment in its own right.
"The government has also removed the duty on raw materials, so it obviously improves the cost and bottom line. We made no money on water before. We did that to build the brand while we get our act together on production," he explained. "Now we make a margin on what we produce." The CEO felt the three to four percent improvement in revenue doesn't sound like a lot, but in the grand scheme of things, given the economy, it points to better things to come. The manufacturer said its staff has grown five percent in 2012, up to approximately 158 Bahamians. Production has not increased as much as merchandising and sales, Wells explained.
He anticipates that Minute Maid and energy drinks will join the produce line by the end of the year, after which Caribbean Bottling Company should enter a period of consolidation. "Now we have to sell the new products. We need to get sales up," he said. "That means aggressive sales approaches and getting product on the shelves. Of course, every company is fighting for the same dollar, so it's a struggle. At the end of the day though, you need to sell these products." Another struggle for the local manufacturer has been the high cost of electricity, a grievance often echoed by other businesses in the community.
Wells said this segment has increased up to 40 percent over last year. Two years ago, he noted that the company's Bahamas Electricity Corporation (BEC) bill was about 31 cents per kilowatt. Today, it is as high as 41 cents. Some of this increase is attributable to more equipment and electricity demand, he admitted. But he called on the public corporation to improve its efficiencies. Caribbean Bottling Company speaks from experience, in the sense that its new facility is far more efficient than the old factory on Thompson Boulevard.
Geoff Knowles, operations manager at Aquapure, has suggested a different BEC rate for manufacturers. This approach is frequently adopted in other nations. Wells expressed concern about this approach, however, arguing that the cost would have to be passed on somewhere. If it went to the consumer, that means Bahamians would suffer even more, and likely reduce their ability to buy the company's products.
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