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Sweet River adding poultry to line-up, new plant faces half-year delay

Published:Tuesday | September 1, 2015 | 2:32 PMTameka Gordon
Valdence Gifford, managing director of Sweet River Abattoir and Supplies Company Limited.
A graphic representation of the Sweet River Abattoir being built at Ferris in Westmoreland. The project has surpaased its June 2015 deadline and is expected to cost more to complete.

Sweet River Abattoir and Supplies Company says it is in dialogue with a local poultry processor to add poultry to its product line as a new revenue stream amid a continued scarcity of pigs for its slaughterhouse.

The abattoir continued to see declines it its revenue performance for the three months ending June 30, 2015.

Sales revenue for the period stood at $23.6 million, compared to the $42.4 million reported for the corresponding period of 2014, a 44 per cent decline which it said was due to the unavailability of pigs for pork production.

The pig shortage has spanned several quarters, producing volatile financial results for Sweet River, a Westmoreland-based operation.

Managing Director Valdence Gifford told Wednesday Business that the meat company hopes to diversify its revenue lines, starting this month.

"Come September, we are looking to diversify our products by adding one or two other items to our array of products - possibly chicken or turkey neck," he said.

Gifford, however, declined to name the supplier, saying the deal has not been signed.

At the end of its financial year (FY), March 2015, Sweet River earned revenue of $121 million, a cliff drop from $309 million the previous year, while loss on operations amounted to $4.5 million, compared to operating profit of $15 million in FY 2014.

With fewer pigs available to buy, lower haulage cost, and reduced energy bills, the 44 per cent drop in revenue for the first quarter ending June 2015 was counterbalanced by reduced production costs and general expenses, resulting in $2 million of operating profit, compared to an operating loss of $1 million at June 2014.

gradual improvement

To smoothen the supply market for pigs, Sweet River has been developing a network of contract farmers. Gifford said he is already seeing a gradual improvement of supply to the abattoir, adding that the network of contract farmers should be fully in place by next month.

The abattoir expects to source up to 80 per cent of its pigs from these farmers.

The abattoir has already announced plans to add sheep and goat to its product line at its new slaughtering facility at Ferris, Westmoreland. Construction of the new plant began in February 2012 and should have been operational by June, but the project has been delayed by additional work load, which has to be financed.

"Plans to have the abattoir operational by June 2015 were delayed as the company had to seek additional funding due to variations and changes in the scope of work for the slaughter line and waste-disposal systems," the company said.

Sweet River said these additional costs were not factored in its initial completion deadline, but expects to have the facility fully commissioned within six weeks of receiving the additional funds, the amount of which Gifford declined to specify.

Sweet River had projected a budget of $292 million for the facility, which has since been designated as an agro-park.

"Based on the changes, because the abattoir was to be made for pigs only and since it will be made into an agro-park that will slaughter sheep and goat, we had to have a second look at what we needed," Gifford told Wednesday Business.

Two pieces of equipment remain to be imported.

"It has to do with the line itself. We have identified the supplier, so we are working on bringing those two items in so as to have those two lines ready," he said.

Gifford was reluctant to give another definitive timeline for the completion of the slaughter house but, when pressed, he said it should be ready to meet the Christmas rush.

"I am fearful of giving another deadline because the (process) of bringing items in can be out of your control sometimes. But rest assured that the existing facility that we are in can manage the demand - it has done so over the last 40 years," he said.

"But, for sure, we will be in the new facility by the end of the year." It is "98 per cent complete, separate and apart from two bits of items that we are bringing in," he added.

Of other plans to improve revenue performance, Gifford said the company still plans to begin exporting meat to Caribbean markets as soon as the domestic supply/demand matrix rebalances.

"We are definitely looking to do some exports by 2016-17. By then, the industry would have recovered sufficiently to satisfy our domestic demand," he said.