Richard Pandohie, CEO of Seprod Ltd, said the company is now reaping the results of higher investments in innovation.

The company doubled exports in 2016 and reflected a $2 billion or 15 per cent rise in revenue to $15.7 billion at year end, compared to $13.7 billion in December 2015.

Profit jumped 51 per cent to $875 million.

Pandohie told the Jamaica Observer, “This has been an exciting period for the organisation as we truly have turned on the innovation pipeline, primarily in the dairy business. Products such as lactose-free milk, heavy cream, condensed and evaporated milk are all brand new to the portfolio.”

He said that in 2017, innovations will continue and more will be seen in the other business units. “Despite spending over $1.2B in capex over the last two years, we will continue to maintain an aggressive spend in capital expenditure to support our innovation pipeline, agricultural investments, and productivity improvement.

“Capital expenditure was actually $708 million in 2016 and we expect the spend for 2017 to be approximately $700 million. We strive to obtain a return on equity of at least 15 per cent,” the CEO said.

In 2016, he outlined, the company experienced more than 100 per cent growth in the export business by the addition of new products to the portfolio.

Pandohie said the rise in revenue and profit were driven by a combination of new products added to the portfolio, export growth, significant reduction in loss at Golden Grove, gain on the investment portfolio, and a turnaround in the distribution operation.

A significant rise in inventory was driven by shipments of spares and finished goods, which did not arrive until 2017, being recognised as goods in transit. This was valued at approximately $300 million.

At the same time, higher spending also resulted from use of professional services in the area of marketing and research.

“Seprod spent considerable time and effort to conduct market reviews and research (both local and overseas) to support the innovation process. Our staff complement also increased as we strive to build a world-class team,” Pandohie explained.

For 2107, he outlined, the conglomerate plans to expand its distribution footprint “to ensure that our products are as close to our consumers as possible”.

The group will also invest in “attracting and retaining great people to drive our productivity and innovation to make us competitive at an international level”, he said.

Pandohie commented: “the outlook for 2017 is positive with growth expected in both revenue and operating profit.

“The continuing macroeconomic stability has given us the confidence to make investments for the long term; our expectation is that the Government will continue to do its part to ensure stability and create an environment that is conducive to growth.”

He said that from a company standpoint, Seprod will continue to be aggressive in modernising manufacturing facilities.

“We have spent over $1.2 billion in the last 2 years to upgrade Serge Island Dairy factory and farm operations, investing in new oven and critical equipment at International Biscuit Ltd, and investing in equipment to improve the quality of the sugar produced at Golden Grove,” he noted

The company will also be investing in agricultural development, particularly in the dairy industry.

“It is our belief that investing in value-added agricultural production in partnership with farmers throughout the country is the key pillar for both Jamaica’s and Seprod’s growth ambition,” he commented.