Seprod focuses on warehouse build-out as revenues surge
Seprod CEO Richard Pandohie addresses the company's annual general meeting on September 21, 2020. Partially hidden and seated to Pandohie's right is Seprod chairman, P.B Scott. (Photo contributed)
CEO of Seprod Group Limited Richard Pandohie says the company is moving ahead with its $2.5 billion investment in its warehouse operation.
“We will be spending a tremendous amount of money to consolidate our warehousing operations and create a distribution organisation that will be cost-competitive and have superior customer focus,” Pandohie said.
The project commenced in 2019 with the first warehouse completed and Industrial Sales Limited (one of Seprod’s distribution companies) relocated to Felix Fox Boulevard.
“The other warehouses will commence in 2020 and will be supported by an expanded distribution fleet,” Pandohie said.
Pandohie was speaking at Seprod’s 81st annual general meeting at Jamaica Pegasus in New Kingston on Monday.
Seprod Group is in the meantime, looking at the challenges emerging under the coronavirus (COVID-19) pandemic, the CEO noted.
“Under COVID, the challenges are much talked about. What is not well talked about are the opportunities. Your management has been and will continue to work hard to capitalise on these opportunities.”
Seprod AGM 2020
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The Seprod Group is organised into two main business segments- manufacturing and distribution. The manufacturing segment incorporates the operations for production and sale of oils and fats, corn and wheat products, cereals, milk products, juices and biscuits. The distribution segment includes the merchandising of consumer goods.
For the six months ended June 2020, Seprod Group achieved revenues from continuing operations of $18.61 billion, an increase of $2 billion or $12 per cent over the corresponding period.
Net profit was $1.22 billion, an increase of $354 million over 2019.
Management, in remarks attached to the company’s financial report, said the increase was due to investment made in previous years to strengthen business fundamentals.
Pandohie said tight management of cash, including cash conservation and disposal of non-operating assets, will continue in the company’s third quarter.
In remarks included in the annual report, Pandohie stated, “The pandemic COVID-19 is truly reshaping our world and the way we do business. Whilst there are many unknowns, it is the intent of your management to deliver strong revenue and operating profit growth with exciting innovations in all our operations”.
The aim of the company in 2020 and beyond, the CEO outlined, will also include expanding exports “which we hope to grow by 25 per cent each year.”
Seprod is also planning to attract “talented people with a can-do attitude”; and expand its contract manufacturing opportunities.
In the year ended December 2019, company revenues climbed to $32.69 billion up from $ 22.49 billion in 2019.
Net profit was $973.33 million compared to $1.06 billion in 2018
As outlined in the 2019 annual report by Pandohie, the 2019 performance “is to be taken in the context of significant one-time costs to close the sugar factory and to execute the consolidation of its dairy factories.”
“Both of these projects had a high price tag, but they will result in the elimination of the continuous losses and cash burn of the sugar operation and will create a best in class dairy operation which will enhance our competitiveness and put us on a firm footing to grow our export business,” he commented.
The year 2019 was also the first full year of the company’s expanded distribution footprint through the acquisition of the Facey Consumer Division.
Pandohie said, “It is still early days but the synergies that will be unlocked in the future will bring tremendous value to the business, our customers and consumers.
“With Seprod now having three firm pillars – dairy, distribution, and ingredients – it is our expectation that revenue and profitability will rise steadily, driven by expanded domestic and international growth. Over the last few years, we doubled down on equipment investment and retooling, but now our focus will shift to our distribution, warehousing and logistics efforts.”