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Stabroek News

Seprod forms new biscuit subsidiary - Kraft assets a US$4m acquisition
published: Wednesday | October 10, 2007

Susan Gordon, Business Reporter

Byron Thompson, managing director of Seprod Limited, says the company's new biscuit subsidiary began manfucaturing on September 3. -file

Local manufacturing company, Seprod Limited, has created a new subsidiary called International Biscuits Limited (IBL) for the assets acquired from Kraft Foods Jamaica in August.

International Biscuits has already begun production of Butterkist and Ovaltine and other brands at Valentine Drive, St. Andrew.

The Seprod acquisition of the tangible and intangible assets of Kraft Jamaica was a US$4.1 million (J$283 million) deal, Wednesday Business has learned.

The purchase included manufacturing assets, inventory, freehold property and intangibles that included the Butterkist trademark, Pix Nix and Snackables, as well as rights to produce Ovaltine.

"We don't own the Ovaltine brand, only the licence to manufacture it," said managing director of Seprod, Byron Thompson.

New acquisition

Thompson told Wednesday Business that the new acquisition represents about 20 per cent of the group's operations.

He hopes to grow the brands locally and internationally by more than 10 per cent in the year ahead.

"This deal includes factory machinery, land real estate, fixed assets, packaging material, raw material and finishing," he said.

"We started production on September 3."

Kraft entered Jamaica at the top of the decade, when its parent, Phillip Morris Companies Inc., acquired the worldwide operations of Nabisco in December 2000, for US$18.9 billion.

Its manufacturing operations were shifted from Trinidad to Kingston two years later. With the sale of its assets to Seprod, the company has reportedly ceased all manufacturing in the Caribbean.

The company continues to maintain a presence in Jamaica - with Richard Barrow as the man in charge of operations - ostensibly to continue to build its global brands.

Thompson declined comment on the size of the local market commanded by International Biscuit's new brands, saying only that it was "a reasonable share".

"The plan is to grow these businesses and to improve our market share locally and internationally," he said.

"I expect no less than double digits."

Top regional consumer

He said the brands have global growth potential, including the Jamaican market, which remains a top regional consumer of biscuit products.

Kraft products are currently exported to the United States, Canada, Singapore and CARICOM using Facey Commodity Limited as distributors.

Facey, which is jointly owned by Seprod and Musson Jamaica Limited, will remain distributors of the brands now controlled by International Biscuits.

Thompson said he plans to penetrate more of the CARICOM markets with the brands.

The Butterkist Company was established in 1969 and the company and eventually sold in 1984 to the Matalons.

In 1998 it was acquired by Nabisco from Mechala, part of the ICD Group, for $330 million. The brand rights were later transferred to Kraft after consumation of the Phillip Morris/Nabisco deal.

The August acquisition by Seprod makes it the fifth change of hands for Butterkist since its establishment in Jamaica.

The Butterkist line includes chocolate, vanilla, strawberry flavoured sandwich cookies, butter cookies, cream crackers, tea biscuits and cookies, savoury biscuits and snackables.

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