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Honey Bun gets toehold in Cayman, Antigua

BY KARENA BENNETT
Business reporter
bennettk@jamaicaobserver.com

Friday, August 10, 2018

Jamaican baking company Honey Bun has secured clients in Antigua and the Cayman Islands for distribution of its Buccaneer Jamaica pocket-size rum cakes.

The product, which is the latest addition to Honey Bun's portfolio, was launched at Expo Jamaica early this year and comes in three flavours. So far, Honey Bun has shipped the product to the Cayman Islands and has received requests for more shipments from the country.

As for Antigua, “the shipment is going off this month,” Chief Executive Officer Michelle Chong told the Jamaica Observer, adding that Honey Bun has interest from other buyers in existing markets.

In May, Honey Bun officially opened its new factory on Retirement Crescent in Kingston. The building, valued at $130 million, covers 11,500 square feet of space and is being used as a bread plant and distribution facility. Honey Bun has also added a fourth production line to satisfy demand from the international and local markets.

“The growth potential for the new markets is very good. The products have been very well received and we believe both markets will continue to reorder,” Chung told Caribbean Business Report.

She was, however, tight-lipped about initial growth targets set for the market, noting that it is still early days.

For the three months ended June 30, 2018 Honey Bun posted sales of $332 million which represented a 15 per cent increase relative to the same period last year.

Chung attributed the increase in sales to continued investment in production capacity and restructuring of distribution.

“We've added more trucks and that has resulted in greater penetration of the local market. So if there were 100 shops and we were going to 70 of them, we are now going to 80,” she said.

The company's profit increased 28.5 per cent or $2.16 million quarter over quarter and was largely attributable to increases in sales as well as gains from the depreciating local currency. For the three months, Honey Bun more than doubled its foreign exchange gains to $915,952 over the comparative quarter of 2017 which totalled $382,555.

In line with investments, Honey Bun's cash and cash equivalents declined from $108.7 million for the quarter ending June 2017 compared to $84.1 million for the comparative three months in 2018.