Seprod ups revenues, cuts expenses
Seprod improved third quarter net profit behind increased sales and prudent cost management.
The company, which makes and distributes brands such as Chiffon and ButterKist, made $212.3 million in profit during the three months ending September 2012. This was $74 million more than it made during the same period last year.
All that was attributed to its increase in sales. "The sales increased primarily because of the price of sugar at the Golden Grove Sugar Company," said Seprod's chief operating officer, Carl Domville. He added that the local team bargained for competitive prices.
It made $3.1 billion in revenue, $568.4 million more than the same quarter last year.
Seprod invested in the St Thomas based factory owning 80 per cent of the company's shares.
The company partnered with Fred M Jones Limited (which now owns 20 per cent of the sugar company) in 2009 to acquire the St Thomas-based sugar factory from the Government and lease over 1,500 hectares of land.
An increase in exports was also behind Seprod's increase in profit. The company primarily sells to the Caribbean, but also exports to the UK, the US and Canada.
"We also got into the bleach market, and sold more soaps than before," Domville said. He added that corn mash, which is sold to farmers, has done reasonably well.
Seprod has always sought to do things better, Domville said. He added: "We do a review of our expenses and find ways to reduce them."
During the quarter under review, the company spent $360 million on administrative expenses.
The sugar factory was substantially dependent on the Jamaica Public Service (JPS) in previous years. But, in preparation for production in 2012, some technical changes were made, which cut the cost of electricity, he said.
"We made an investment and it paid off," Domville said.
The company's manufacturing division, which includes processing milk, producing edible oils and making of snack foods is an on-going negotiation to supply local hotels.
"They (hotels) are interested in competitive prices", said Domville. Products such as cream, shortening and milk are sold.
Its future plan is to intensify its exports. The company also wants to introduce new products in both the local and foreign markets, Domville said.
Seprod is also eyeing contract packaging. "We plan to sell packaged products to customers who want to resell them," he said.
The company offered to buy back 10 million of its own shares from the market. Seprod proposed to purchase just under two per cent of its issued stock to take advantage of its attractive pricing.