Manufacturing and distribution group Seprod is looking to supply the region with more margarine, and is in the process of expanding subsidiary Caribbean Products Limited to handle the increased production load. Over the past eight months, the company has been renovating and upgrading the equipment, and is expected to ramp up the new capacity within another month. At that time, Seprod plans to start producing more margarine for sale to the Caribbean region, but it will also be producing the item on behalf of a third party under contract.
So far, Seprod has spent about US$6 million on the plant. "It is essentially a new margarine plant. We'll be finished by April and the idea is that we'll be co-packing for a major global company, while allowing us to introduce a lot more margarine and butter-type products to the market," said Seprod Group CEO Richard Pandohie.
Caribbean Products is presently capable of producing different types of margarine, inclusive of bulk for the baking and food industry; and hard stick and soft table margarine for home use.
Production of key brands Chiffon and Gold Seal margarine continued throughout the upgrade, but there were periods of disruption, Pandohie acknowledged. "Our consumers would have been noticing that at one time or another, there was a shortage of some products like Gold Seal margarine. At one time we had problems with Chiffon and some of the bulk margarine supplied to other manufacturers," he said. "We've modernised the plant by putting in new equipment, new capabilities. It was an aged plant that needed upgrading, if we're going to be competitive and produce to global standards,"
Pandohie added."Everything we do now, at a bare minimum, is sized to produce for the rest of the Caribbean. That's our mindset right now." The disclosure about the plant expansion comes alongside the release of the company's preliminary year-end results for 2022. Profit climbed 93 per cent during the year, from $1.85 billion to $3.84 billion. This was on the back of an 82 per cent increase in revenue to $79.67 billion. The additional $36 billion of sales was mostly related to the consolidation of newly acquired business AS Bryden, a distribution company based in Trinidad & Tobago. The acquisition has essentially doubled Seprod's revenue.
"That wasn't too hard to do," said Pandohie. "AS Bryden is essentially the same size as Seprod." Minus the effect of AS Bryden, profit would only have grown by eight per cent, which would still be a satisfactory outcome, according to Pandohie, who noted the challenges faced by the business throughout the year. "It is a performance that management is very pleased about, considering the challenges we had with the fire and so on and the unusual expenses that we had to endure," Pandohie said.
The blaze at the company's Facey Commodity warehouse complex in 2021 forced Seprod to rent storage space from the Port Authority of Jamaica as replacement, leading to additional expenses that carried over into 2022. Seprod says it has started the "unwinding of the extraordinary warehousing and logistics costs" and is gradually returning storage to its new distribution campus at Marcus Garvey Drive, Kingston.
The systems merger with AS Bryden is also ongoing. "We're not yet into stride. We're just getting out of the blocks. If trends hold true when we hit top speed it will be remarkable," Pandohie said.
Source: Financial Gleaner