Business

Sweet River hopes ham season will save bacon

BY KARENA BENNETT
Business reporter
bennettk@jamaicaobserver.com

Friday, December 14, 2018

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With another drastic decline in performance for the second quarter 2018, pork supplier Sweet River Abattoir and Supplies Company is banking on sales from the festive season to drive up year-end profit for the company.

Sweet River posted losses of $4.42 million for the quarter ended September 30, 2018; $4.12 million more in losses compared to a loss of $225,000 for the comparative quarter of 2017. Total assets of the company also declined to $400.8 million compared to $446 million a year earlier.

“The quarter July to September is often referred to as the worst in the year for the sale of pork in Jamaica, and coupled with a relative lower than normal supply our performance was negative,” Managing Director Valdence Gifford told shareholders.

“We are confident that the third quarter, often referred to as the ham season, and which also includes the start of the winter tourist season, will be better as it is historically the best season for pork sales,” he continued.

As the same time, he anticipates that Sweet River Abattoir's entry into the hotel markets is expected to significantly increase sales for the company. With the winter season running from December to May, Gifford is optimistic that the fourth quarter will also benefit from this spike in demand.

Sweet River's three-month period saw sales falling 28 per cent when compared to the similar period in 2017. Meanwhile, year-to-date sales for the six-month period in 2018 fell by 23 per cent compared to the similar period in 2017. For the June 2018 quarter, sales of Sweet River also underperformed, dropping 16 per cent from $92 million to $77 million attributable to the unavailability of pigs in the market.

The meat processor continues to face challenges quarter over quarter, mainly from oversupply of pigs in the market, and what it says are 'uncompetitive' prices in the marketplace

“There is consensus among pig farmers islandwide that they experienced great difficulty in selling pigs in 2016 and 2017. They also complained of low prices coming against the background of record arrivals in the tourism sector — from which a lot of our demand of our product is derived — reflecting the need for more transparency in the market,” Gifford previously said.

The managing director noted that while the company is expecting revenue growth from 2018's third and fourth quarter, he is mindful that cost controls must be made while improving efficiencies at the plant.

“We have also begun discussions with some of our key farmers with the view of collective purchasing of raw materials. The sharing of best practice and technology amongst farmers has begun and will be expanded moving forward,” Gifford said.

Sweet River is adamant that the pork industry remains a viable business option in Jamaica, largely based on its population of 2.8 million and tourism traffic of 4.2 million in 2017— comprising 2.3 million stopover visitors and over 1.9 million cruise ship passengers.

“The demand for pork is significant and growing,” Gifford said.

The company, however, highlighted that to realise maximum benefit from the industry, more investments are necessary in further processing as only approximately 40 per cent of fresh pork is being processed.

“In other major pig-producing countries over 75 per cent of pork is processed. With an estimated 6,000 pig farmers in Jamaica, of which approximately 70 per cent are located in rural parishes, the country can produce all the pork we need, with the exception of pork bellies,” he continued.


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