Following the recent purchase of a substantial stake in Caribbean Producers (Jamaica) Limited (CPJ) by its AS Bryden subsidiary, the Seprod Group is now positioning to double down on growth opportunities in the lucrative tourism industry.

Chairman of the Seprod Group PB Scott, while speaking at the company’s 85th annual general meeting held on Monday, said that the recent acquisition of 44.8 per cent of shares in CPJ allows the conglomerate to tap into the hospitality services market in a much larger way.

CPJ, a food and beverage distributor, primarily services hotels and resorts in Jamaica and St Lucia. Shares in the hospitality services company previously owned by Mark Hart and Tom Tyler were secured by AS Bryden in a $5.2-billion transaction last week, with the company expecting to increase its stake overtime.

“One of the biggest areas in our region is the hotel trade and the business of hospitality, but up until now, our group has had very little exposure and that is because it is a very specialised area. One doesn’t just get to wake up tomorrow morning and sell to all the hotel chains…I thought that I could, but have since tried and failed, not making very much progress in the last 10 years. Having, however, watched other players such as CPJ do a tremendous job in the area, through their highly specialised team, strong customer relations and great infrastructure, we’re very privileged to work with them going forward as we look forward to building out that fourth pillar of our distribution business,” Scott told shareholders gathered in-person and online at the hybrid meeting.

With AS Bryden currently developing new facilities in Trinidad and Houston, Guyana and other warehouses in Barbados, Scott said the integration of cold storage forms a critical part of the group’s marketing strategy as it looks to onboard products to cater to the hospitality market.

Seprod, whose core operations span activities in manufacturing and distribution, is a large regional outfit with a growing list of subsidiaries in food, pharmaceutical, beverages and other commodities. Its Trinidad-based AS Bryden subsidiary acquired in 2022, a company in which it owns more than a 50 per cent stake, has over the last two years positively added to consolidated revenues. At the end of 2023 financial year, total revenues for the group jumped almost 43 per cent, moving from $78 billion in 2022 to $112 billion. The company hopes to boost this further by targeting the tourism sector.

“There is a gap as the chairman pointed out that we haven’t done much of a great job in taking advantage of and as a result, we want to look at all the available opportunities as we work more effectively to close it, hence the CPJ move. Tourism is a space that has been growing phenomenally with all the room additions and tourists coming and we want to ensure that our products are also there — not just existing ones but those to come in the future,” Richard Pandohie, CEO of the Seprod Group and AS Bryden, said in response to shareholder queries during the meeting.

“We can’t be in the Caribbean and not be a part of the hospitality sector if we really want to have growth. Our businesses, both Seprod and Bryden, didn’t have this footprint and in a way that we really wanted them to. Our latest actions are therefore very deliberate, so we are not just buying for buying sake, but with a specific objective in mind. This CPJ buy-in presents such a big opportunity and even without a final projection on the numbers, we know right now that the tourism and hospitality market is an area that we need to be in,” he further said during an interview with the Jamaica Observer following the meeting.

The local tourism sector has been working to deliver on its triple five objective, aiming to welcome five million tourists, and earn US$5 billion over a 5-year period ending 2025. Despite a range of global and domestic market challenges, Minister of Tourism Edmund Bartlett said the sector remains on track to achieving these outcome, with arrivals reaching 4.1 million in 2023 earning the country US$4.3 billion.

Output from the sector up to first quarter of this year according to the latest data from the Statistical Institute of Jamaica (Statin) was 6.9 per cent, and was the biggest influence on 1.4 per cent expansion in overall economic activity.

Seprod’s Jamaica operation accounts for about 40 per cent of its business and is seen as crucial in helping the group to reach US$1 billion in sales by financial year the end of its financial year in December 2026.

“We need to add value, so growing the business to US$1 billion as the CEO has projected, to maybe even US$1.5 billion within the next year or two is what we are now aiming to get to,” Scott added.