Tuesday, July 11, 2017

Business: Seprod Hitting its Stride

SEPROD CEO Richard Pandohie
Seprod CEO Richard Pandohie" was clearly upbeat at the Company's most recent AGM Kingston's Pegasus hotel on Monday, and a cursory glance at the company's financials suggest strong grounds for his optimism. the conglomerate returned a pretax profit of J$1.8bn, with similarly positive results in respect of returns to shareholders and total asset growth. Below is the text of the CEO's Report.

Minority shareholder leader Orett Staple

2016 was a positive year, which saw Seprod accelerating its expansion efforts, growing its international business and rolling out an impressive innovation pipeline.
Let us briefly walk through the major business units that have occupied our discussions over the last couple years.
Golden Grove Sugar Company
Sugar is a sweet product but, for us, the financial results over the years have been bitter. With the approved marketing agency status which enabled us to market and distribute our own sugar, the financial losses were reduced.  Our Golden Grove brand is now synonymous with high quality sugar and first class presentation. With the implementation of the revised sugar packaging and labelling standards on July 1, 2017, we expect the Golden Grove brand to take an even greater share of market.
Our fields and factory operations are much improved; we were very optimistic about achieving breakeven in 2017 but continuous adverse weather conditions have destroyed that ambition.
We will continue to strive to make this operation viable, to not onlystop the further destruction of shareholder value; but also in an effort to continue one of the only economic activities in Eastern Jamaica and more so, in the forgotten parish of St. Thomas.
Serge Island
The farm operation was much improved; milk production and productivity continue their positive trajectory. We presented a proposal to the Government that spoke to a public/private sector partnership to double milk production, bring back small farmers to the industry, and in general, begin to reverse the catastrophic decision in 1994 that liberalisedthe importation of heavily subsidised milk powder that resulted in the near total decimation of the local dairy industry.A few discussions were held but nothing substantial has emerged; we have accepted that to make any headway, we will have to start on our own, working with the farmers and hopefully the Government will join eventually.
In the factory,our innovation pipeline continued to flow.  Consumers have embraced our evaporated milk, condensed milk, whipping cream and of course, our lactose free milk. The investments made in Research & Development have been, and will continue to be, substantial; this will be the backbone of creating sustainable growth and delivering above average returns for shareholders.
Jamaica Grain & Cereals Limited
The Chairman has already spoken about this investment to enhance our corn milling facility and enter into the flour market; arguably the largest industrial project undertaken in Jamaica in recent decades. We are proud to have a state of the art, best in class facility right here in Kingston. We anticipate not only producing our own brands but doing private label manufacturing for 3rd parties. 
Ladies and Gentlemen, can there be any doubt about our pledge to grow the business and grow             shareholder value?Your company is committed to growth.The principles that guide our growth commitment will continue to bebuilt on the following pillars:
Consumers and Customers will continue to experience new products in all aspects of our operations; not just dairy and sugar; for example, we have launched low fat and vegan margarine that you can see in the display booths. We will also be innovative in our technology and the way we interact with our consumers and customers.
Building Economies of Scale
This is critical to driving down our unit cost of production which will enable us to be price competitive in the local and export markets. We have to maximize our manufacturing capacity; as, in many cases, we are competing on an unfair playing field with persons who are either abusing loopholes in import regulations, or with import products that are being heavily subsidized in their countries of origin.
As a manufacturer, employing more than 1,000 Jamaicans and having invested over $5Billion in the last 3 years, we are constantly facing higher cost and more stringent requirements to do business; however, some entities can simply bring in containers, have very little investment in the economy but are allowed to undermine and destroy legitimate manufacturing investments. Let us be clear, we have no problem with competition but it must be on a level playing field; the rules cannot be selectively applied for the benefit of a few and to the detriment of many.
High Performance Culture
Another pillar is building a performance culture by attracting and investing in talented persons. I am proud that our company has taken on young graduates of the University of the West Indies, University of Technology, College of Agricultural Science &Education and the Caribbean Maritime Institute, who will work in the organization, gaining valuable work experience and being the first cohortto develop a talent pool to drive Seprod to higher heights. Today, we have some of our new interns in attendance. Our young people are talented and ambitious, they just need an opportunity.

Mutually Beneficial Partnerships
·         We want to expand our partnership with our farmers.
·         We want partnership with the Unions to improve productivity. Jamaica continues to struggle with a culture of low productivity that puts us at a competitive disadvantage in the global village.
·         We want to partner with Government to make Jamaica a place of choice to live and to raise our families; creating employment opportunities that will allow persons to break the poverty cycle.
·         We are partnering with educational institutions to build human capacity.
·         We will continue to develop a value-added partnership with our consumers to bring them competitively priced, nutritious and healthy products; for example, we have been proactively reducing the sugar content in our products and have embarked on a redevelopment campaign that will see making our products healthier.
·         We want to partner with our employees, to be an employer of choice and create a culture and environment of which they will be proud to be a part.

Ladies & Gentlemen, Seprod is heavily invested in Jamaica and has been an indelible part of the Jamaican landscape for 78 years. We are a significant player in this country and it is our responsibility to be a key agent in making Jamaica a better place for ourselves and the generations to come.
We implore our Politicians & Technocrats to be truly committed to the growth agenda and not compromise the fledgling growth possibilities, through ill-advised taxation measures and poor policy decisions.
We implore the various Government agenciesto partner with manufacturers. It cannot be that they are forcing manufacturers to outlay hundreds of millions of dollars for every conceivable compliance; but then have no resources in place to stop persons bringing in goods that are flagrantly violating the country’s labelling requirements, not paying their fair share of dutiesand utilizing illogical loopholes todestroy legitimate businesses.
We are cautiously optimistic about the country’s outlook; there is evidence of economic growth occurring, but it must be nurtured carefully.We stand in solidarity with all well thinking Jamaicans in condemning the level of criminality in our nation; crime has been an albatross around our neck, devaluing our lives, destroying our economic growth and increasing the cost of doing business. We can be so much more.

I want to end by thanking the Chairman and the Board for their confidence and support, the Management team for their passion and commitment to the cause, and to each and every employee in the company for the contribution you are making to ensure that we can truly say “Made at Seprod, mustbe good’. I want to thank our consumers and customers, without you, the dream would not be possible; and finally, our shareholders, for their continued confidence."

No comments:

Post a Comment