Medical Disposables to distribute candy
Published:Tuesday | October 2, 2018 | 12:00 AMSteven Jackson/Senior Business Reporter
Medical Disposables & Supplies Limited (MDS) is going more fully into retail distribution as a supplier of the confectionery products made by Aldor of Colombia.
"We want to be known as a distribution company. We are not limited to only selling medical supplies or pharmaceutical products," said MDS General Manager Kurt Boothe at the company's annual general meeting in New Kingston on Tuesday.
The company says it will leverage its existing distribution network to sell the confectionery products nationwide. But its distribution channels won't be confined to pharmacies.
"We had a suite of products that could be sold over the counter. Now we are venturing into new channels that we were not traditionally in, such as wholesale, haberdasheries and supermarkets," said Boothe. "So that is how we will expand our customer base."
MDS will sell lollipops branded as Pin Pop and Yogueta, along with chewy mints such as Masti, Frunas and others.
In addressing prospective critics, Boothe argued that consumers can enjoy sweets in moderation.
BUSINESS SEGMENTS
MDS operates three business segments - pharmacy, medical and consumer. The candy business will fall under the consumer segment, which is a fairly new addition to the company's business model.
The new segment launched last year helped push MDS beyond the $2 billion mark for annual revenue for the first time in the company's 20 years of operation. The Aldor confectioneries add to the GlaxoSmithKline pharma line, which includes Panadol, Andrews Salts and other products, within the company's consumer portfolio.
Aldor is among the largest exporters of sweets from Colombia. Boothe declined to comment on financial projections and market expectations for the new business line.
"We are cautiously optimistic," he said.
In other matters relating to MDS's financing, Boothe said the company would be approaching its banks, implying plans to refinance portions of its debt next year to take advantage of falling interest rates.
MDS debt at some $335 million is just over 50 per cent of equity. The company's financing costs at $35 million was one-third of its $110 million annual profit.
Most of MDS's loans are secured at single-digit interest rates. However, a $200-million loan acquired at 8.5 per cent in 2015 to purchase property has swelled 10 per cent from May of this year to maturity. Contextually, financial institutions are now lending to some clients at single digits.
"We will be sitting down and having conversations with our banks," Boothe said.