Carita staying afloat despite COVID-19
THE GLOBAL coronavirus pandemic has created some business opportunities for local food exporters who have been able to adopt their strategies in line with the challenges and have been able to survive and thrive. One such business is Carita Limited, of which Rita Hylton is chief executive officer.
Carita Limited grew because of increased demands for Jamaica produce in diaspora markets, and even though there are no airlifts, the switch to shipping containers meant that in some instances, they were able to ship more.
One major troubling factor for Hylton has been the propensity of some farmers to take advantage of the food scarcity by jacking up prices.
“What is disturbing is the high price of food produce in Jamaica, and the farmers’ and the middlemen’s expectations that people must pay more for food. That is why yam is close to $300 a pound. Sweet yam is just coming on stream, and the demand is that if you want it, you must pay this magical figure of $300 a pound.
“Three hundred dollars a pound is unconscionable! We have to remember that we are shipping to countries that also have COVID19 restrictions, and people are not working and purchasing power is down,” Hylton told The Gleaner. She admitted that food production is nowhere near where it should be, which might be fuelling the price spike.
Despite the hiccups with sourcing food at affordable prices and meeting shipping deadlines, Carita has been able to maintain its full complement of staff, without any lay-offs, despite COVID-19.
Things haven’t always been smooth for the company, which lost all its assets in the FINSAC debacle of the 1990s and had to start all over. The lessons learnt from that experience have been hard but invaluable, according to Hylton.
“We have grown the business by being consistent in the market by giving fair prices, by making sure that the business makes a profit, small as it is. That is how we’ve been able to build the business back again.”
This growth has had some drawbacks, but the Carita team has kept pressing on, reaping the rewards of hard work and perseverance.
Hylton explained that the company is no longer considered a small or medium-sized enterprise based on its revenue stream, which has put it at a disadvantage.
LONG UPHILL FIGHT
“My team and I have built this business ourselves, with no support from any bank, no grant assistance, so it has been a long, uphill fight,” Hylton disclosed.
Jamaica yellow yam is the number-one export item, followed by sweet potatoes and hot peppers; and based on the demand for these and other local food items, the export business has the potential to grow by at least another 300 per cent, Hylton
estimated. She highlighted some of the reasons this expansion has been stymied.
“There is insufficient product in the ground, the prices are not consistent – they change from dayto-day, and if you find that there is competition internally from other exporters. You make an order, you lose the order because somebody else wants to fill their container and will offer two, three dollars more per pound.”
For this reason, Carita has abandoned contractual arrangements with farmers and has gone the word-of-mouth route.
“We’ve paid out contracts, we’ve done contracts, but farmers only want contracts when there are gluts. I don’t find anybody who has honoured a contract yet. So we’ve stopped doing contracts – my word is my bond. If I say I’m going to take a product from you, I will take that product and we can negotiate the price, but I am not investing in farmers anymore.
“Small farmers, I realise, cannot support an export sector for Jamaica unless they are governed by a mother-farm concept. It is impossible for small farmers to support an export business for Jamaica, sadly.”
However, there are other market forces which work against the exporter, of which the customers might be unaware, but which have just as devastating an impact on their bottomline.
“When there are fluctuations in the exchange rate we have to suck it up, because if the rate goes to $147, everybody else is going to price their goods at $138-$140. When that remittance comes back in and the exchange rate has dropped at $141, the bank is going to give you $135. You have to hug up that loss in Jamaican dollars and yet we are the sector that’s earning foreign exchange and our company is 98 per cent export.”