6 months ago
27
Medical Disposables & Supplies Limited, MDS, has entered a new arena in the fast-moving consumer goods market with its appointment as a distributor of True Pet Food in Jamaica.
The non-exclusive distributorship is part of an expansion plan in its home market and overseas that will see the company taking on the distribution of new products and investing in a new entity in Cayman Islands called MDS Cayman.
“We’ve expanded over time strategically. We’ve entered a fast-moving consumer space for different reasons: looking for new areas of growth, but also for diversification, as well of income streams, product lines … market segments,” MDS CEO Kurt Boothe told the Financial Gleaner.
MDS Jamaica will hold 30 per cent of MDS Cayman, the formation of which is projected to be finalised by the end of March. Boothe expects the company to be fully operational by April, and says its dealings will be confined to the healthcare sector for the time being.
It will operate as a distributor of pharmaceutical and medical products to healthcare facilities in Cayman and the wider Caribbean. The joint-venture partner in MDS Cayman was not named.
True Pet, a pet food brand developed by Caribbean Broilers Group specifically for Caribbean dogs, is being handled by MDS’s consumer division, which the company started building out in 2017.
Over time, the portfolio has expanded to include confectionery and snacks, personal care and home care products, and includes brands such as Velina paper products, Disiclin cleaning fluids, Benjamins’ cosmetics, True & Natural soaps, Tree Hut Beauty Care, Scotch Boyz sauces, Blue Maxx laundry, Olive Babies infant care products, and Aldor and Pereira candies, which are distributed through supermarkets, wholesale shops, small shops, beauty stores, the hospitality sector, gas stations, restaurants and small vendors.
True Pet adds a new type of product to the line-up – pet food – which will be sold through similar channels.
“It’s something that we take in stride. It’s not an area that we’ve entered on full blast, but we take it in stride to ensure that whatever it is that we do take on, we can manage with regard to providing a superior quality service,” Boothe said.
“We pretty much started small and gradually expanded along the way. Tested the market and then added more. That way, we also didn’t have to have an explosion of input as far as resources are concerned,” Boothe added, regarding the portfolio expansion and diversification programme.
MDS’s consumer division currently accounts for 10 per cent of group revenue, which, for the financial year ending March 2024, would equate to $372 million of the $3.71 billion in sales revenue that the distribution company reported.
Boothe said the division has more than doubled its contribution over the past three years, from four per cent to 10 per cent, and he expects the addition of the pet food product to result in new growth, given the robustness of the pet industry in Jamaica. According to global data and business intelligence platform Statista, the overall pet food market in Jamaica is expected to reach US$22.85 million in 2025.
The expansion comes in a period of vulnerability for MDS, which has been bleeding red ink and burning through cash. At last report, its cash holdings were in deficit to the tune of $246 million at half-year ending September 2024. MDS also reported half-year loss of $48 million from marginally improved sales of $1.88 billion.
Out of comfort zone
As to whether the company might be taking on more than it can chew with the new distribution arrangement, Boothe said MDS and CB were of like mind regarding market synergies, and that for business to grow, one had to take calculated risks.
“With regard to biting off more than you can chew, a wise person once told me, ‘Bite off more than you can chew, then chew like hell!’,” he quipped, with a nod to his mentor, Cari-Med Group Chairman Glen Christian.
“What I must say is that for any leader or any business to grow, they have to come out of their comfort zone. If you’re too comfortable, you are not growing. You have to be prepared to get into an uncomfortable space. Which means that we don’t roll the dice and take chances; we take calculated risks. And that’s the difference,” Boothe added.
The terms of the agreement with CB Group were not disclosed.
“The beauty about the deal is that everything is already in place to facilitate it. So it’s only an addition to the cost as opposed to additional expenses,” said the MDS leader.
It required no investment in additional infrastructure, because the consumer division at MDS has sufficient storage for new products, he said.
“The greatest challenge is with start-up, where you have to roll out or provide the outlay to enter. That’s where you put in additional infrastructure, additional logistics, additional routing. But once you’re already in the channels, the more you’re able to add products without adding any more expenses,” Boothe said.
As new partners, MDS in collaboration with CB Group hosted an all-day conference with pharmacists last Saturday, January 25. The conference, themed ‘MDS Gone to the Dogs’, had in attendance representatives of the Cayman Association of Pharmacists and “covered what we regarded as untapped areas to pharmacists, which included veterinary care”, Boothe told the Financial Gleaner.
There were participants from across the Caribbean, North America, Europe, Asia and Africa, giving MDS a better sense of what the needs were in overseas markets.
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