Seprod to invest $1.4b in upgrades
Seprod Limited will be pouring more than a billion dollars into upgrades across the company, Chief Executive Officer Richard Pandohie said Tuesday.
"Within Seprod, we are not quietly optimistic, we are loudly optimistic. We intend to grow over the next three years, both organically and by acquisitions, adding to our over 1,800 employees and $12 billion in assets," Pandohie declared at the passing of the baton from retired CEO/Managing Director Byron Thompson - a transition heralded with cocktails.
Thompson had a 41-year run with Seprod, the last 15 as managing director.
The new boss said Seprod would be spending heavily in the coming months.
"In 2015, we'll invest over $1 billion in projects to enhance our agro-businesses, snack division and our oil and fats division," said Pandohie at the function.
He later told the Financial Gleaner that the planned capital expenditure was closer to $1.4 billion.
Seprod was incorporated in Jamaica in July 1940 and became a public company listed on the Jamaica Stock Exchange in 1985. Its subsidiaries include Serge Island Dairies Limited, Serge Island Farms Limited, Caribbean Products Company Limited, Industrial Sales Limited, International Biscuits Limited, Jamaica Grain and Cereals Limited, Belvedere Limited, and Golden Grove Sugar Company Limited.
Third-quarter results up to September 2014 show assets of $11.2 billion.
Pandohie said he plans to invest $300 million in the oil and fats division - the larger portion of which would pay for upgrades to co-generation to save on energy costs for the group.
Another $400 million will be spent on the dairy division to expand the overall operation and introduce automation. Pandohie said he expects to see yields in efficiency and production of around 50 per cent over three years.
The juice operation is getting an injection of about $250 million, which will finance new product lines and position Seprod to chase after a new demographic and additional market share.
"You will never, for example, get our teenagers and young adults drinking out of a straw. They will more want to go for a box or some sort of container, and so we have to cater to them," Pandohie said.
The biscuit and cereals division will also be renovated for efficiency and to expand the range of products at a cost of $450 million.
Pandohie said Seprod expects to recoup the investment in less than two and a half years.
He also said that Seprod will be doing a major export push over the next three years, starting with its juice products.
"We expect to have about 30 per cent of our revenues coming from exports" he said.