Seprod pumps $440M into farmlands to launch lactose-free dairy milk in June

Seprod pumps $440M into farmlands to launch lactose-free dairy milk in June

BY KARENA BENNETT Business reporter

Tuesday, February 02, 2016

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On the heels of the launch of the ‘Drink Real Milk’ campaign, Seprod Group of Companies is investing $440 million in its farmlands in an effort to double the milk yield per cow.

Concurrently, the company is eyeing the inclusion of milk as opposed to milk powder in the production of its value-added products including evaporated milk, yogurts and whipping cream.

CEO of the Group, Richard Pandohie, in an interview with the Jamaica Observer last Friday during the launch of the partnered ‘Drink Real Milk’ campaign, said the company has started investments of $150 million in its Serge farms for irrigation, drilling new wells and linking them to the fodder production. Another $40 million will be invested in the certification of the farmlands, and $250 million in equipment.

"The idea is to get production up. Right now we are producing 69 per cent of the demand, about seven million litres on our farms, and we expect to get that up to 10 million litres," he said. "But we are really hoping that farmers will be producing most of that milk so the idea is to work with the Dairy Board and the other partners of the ‘Drink Real Milk’ campaign to get farmers producing more."

Last week, the Caribbean Broilers Group, Seprod, Newport Fersan and the Jamaica Dairy Development Board partnered for the launch of a ‘Drink Real Milk’ campaign aimed at cutting the country’s milk import bill by $2 billion come year end. The initiative is aimed at producing 20 million litres of local milk annually, ultimately re-establishing a sustainable and self-sufficient dairy industry which has seen sharp and consistent decline from 38.8 million litres in 1992.

Jamaica currently spends US$52 million (J$6.2 billion) on the importation of milk and milk-based products annually.

According to Pandohie, as local milk production grows to exceed demand, Seprod will seek international demand for the product primarily within Caricom markets. Already, Seprod has secured a deal for the exportation of milk to Trinidad and Tobago, with the first shipment scheduled for this month.

‘It is our first time heading to Trinidad with milk and it is a couple thousand cases. We are exporting to Cayman Islands now but we are looking elsewhere," the CEO disclosed. The group’s products are currently sold in North America, the UK, Canada and Caricom markets but plans are underway to get into some South and Central American countries as well.

What’s more, Seprod will introduce lactose-free milk on the market by June as part of strategies to supply lactose-intolerant individuals with the needed calcium.

"There is a need for lactose-free milk in Jamaica. It’s a real need and that’s why they have all these milk alternatives including almond and soy milk. The fact that they can’t drink milk because we didn’t give them the option is our problem, so we are fixing that now," Pandohie told the Business Observer.

"We will have lactose-free milk in Jamaica by June, 100 per cent dairy lactose-free milk. That investment has started and we are in the process of doing that."

As part of its celebration of 75 years in operation, Seprod last year commenced the roll-out of a $5-billion investment with the acquisition of a state-of-the-art Compact Flex Filling machine slated to increase production at its subsidiary Serge Island Dairy by some 45 per cent.

The Tetra Pak equipment, acquired at a cost of US$3.5 million, will not only boost production for the domestic market but is expected to give Seprod an even bigger share in the export arena. The company will also capitalise on efforts of the ‘Drink Real Milk’ campaign to boost sales.

"This campaign is not really about Serge milk, it is just about milk. If it benefits other milk producers or manufacturers – great, but the idea is to increase milk production and demand in the country and then it will find itself naturally because the biggest opportunity we have is import substitution, that’s the key," the CEO said.

"So the pie is big enough for all of us and this is what I like about this campaign – it’s not brand specific, it’s just really about an industry."


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