After securing another good financial year despite the effects of the COVID-19 pandemic along with increased cost from discontinued operations, Seprod Limited said that the company is further seeking to expand its distribution footprint in the domestic and international markets.

Speaking in a livestream of the company’s 81st annual general meeting held on Monday, Richard Pandohie, managing director and chief executive officer (CEO), said that while the business has doubled down on equipment investment and retooling activities over the last few years, the entity now intends to give greater focus to distribution (domestic and export), warehousing and logistics.

“These areas are the lifeblood of the organisation connecting our factories, production and the brands of our partners to consumers and customers. We are projected to spend a total in excess of $2.5 billion to build out and consolidate our warehousing operation and create a distribution organisation that will be cost competitive, agile and with a customer footprint second to none,” he told shareholders present at the Jamaica Pegasus hotel in Kingston.

Pandohie said that with the first phase of the project done last year, the commencement of the second phase, which has already started, is expected to be completed by the third quarter of next year. With the company’s foray into the Trinidad markets through its Serge and Supligen brands, it further hopes to take advantage of export opportunities in other countries of the region including Guyana, where the group already operates other types of business.

“Opportunities do not come in a linear fashion and if opportunities came for purchasing and distribution business or working closely with the people that we work with or any opportunity, we will certainly look at that, but we do have relations in Guyana that we would want to grow and maintain.” “We see Guyana as a big opportunity, we’re going to work with our partners in that country to continue in building out that market,” said Seprod’s Chairman P B Scott in responding to questions from shareholders.

Among the new products up for disribution are Supligen’s newly added cookie & cream and coffee flavours as well as a gluten-free cassava flour which was launched a week ago.

“We are targeting a 20 uplift in volumes primarily by increased export sales. We have a very active innovation pipeline, as this will be key to improving our volume and profitability. The target is to launch a minimum of three new products quarterly, some will be renovations of existing products,” Pandohie told the Business Observer.

Commenting on the progress of the company, he said that not only has the business managed to delivers on its five-year strategic vision of creating a modern manufacturing facilities, value-added acquisitions, strong distribution pillars and increased value for shareholders, but it has also positioned itself well to move forward into the future.

In its last financial year, Seprod closed activities with $32.7 million in revenues, $10.2 billion more than it had in the previous year along with net profits of 1.0 billion or 89 million less than that last year. Total assets for the year stood at $36.5 billion and $15.0 billion in total equity. 

COVID-19 RESPONSE

The 80-year-old company, in light of the ongoing COVID-19 pandemic, recently reported in its six-month period ended June 30, unaudited revenues from continued operations of $18.6 billion, some $2 billion or 12 per cent more than that of the corresponding period last year. The company, following the disposal of its sugar production operations, also reported a $16 million loss which was significantly less than the $309 million seen in the same period last year.

“Despite COVID, the show must go on and will go on. None of us saw this coming and with so many unknowns it is difficult to say what the future will look like but what I can assure you is that we are committed to coming out of this pandemic more resilient and agile than before.

“We culminated 2019 by closing some big ticket projects by existing the hugely unprofitable sugar manufacturing operations and completing the consolidation of the diary business on the largest consolidation of its type in Jamaica’s manufacturing history. These initiatives have set the stage for significant improvement in our performance,” Pandohie said, noting that while the pandemic reshapes the world, it is the emergence of opportunities that should be factored rather than the disruptions.

“We all have had to learn virtually—ecommerce is now an essential channel to reach consumers. Global supply chains disruptions have created export opportunities and possible value-enhancing acquisitions. Our management team has been and continues to work hard to capitalise on these opportunities to bring value to all stakeholders,’ he continued.

The CEO said that the over 2000 people directly and indirectly employed by the group have not been severely impacted by the pandemic as the company has enacted measures to secure lives and livelihoods.

“We have pretty much maintained all the staff and at this stage we do not see any significant staff layoff on the horizon. We will do our best to protect our valued employees against this unprecedented economic shock, we are a team that wants to lead with compassion. We are fully engaged and confident that we will continue to find ways to unlock our full potential and be a key player in the renaissance of the productive sector and the recovery of Jamaica,” he stated.