Ashford Meikle, Staff Reporter
Byron Thompson, (right) Seprod group managing director in discussion with chairman A.D. Blades at the Seprod annual general meeting at the Knutsford Court Hotel on August 8, 2005. - Junior Dowie / Staff Photographer
Seprod Limited says that it will be expanding its dairy farm on the 2,300-acre Belvedere Estate in St. Thomas which it is buying from the Jamaica Flour Mills and the Jamaica Producers Group (JPG). It is also exploring the possibility of exporting mangoes now grown at Belvedere, Seprod says.
"The primary reason (for the purchase) is to expand our (dairy) herd and our milk production because there is a great demand for the UHT and fresh milk that we produce," Seprod's chief executive officer (CEO) Byron Thompson, told Wednesday Business yesterday. "We have limited scope for expansion at Serge Island because most of that land is taken up already. Belvedere provides a good opportunity to do this."
The Desmond Blades-controlled Seprod acquired Serge Island Farms 15 months ago from the ICD Group, taking the commodities manufacturer not only deep into agriculture, but livestock and dairying. Then last Thursday, Seprod advised the Jamaica Stock Exchange that it had entered into negotiations to purchase Belvedere, a property that is close to Serge Island Farms. The deal is expected to be completed by the end of August.
While Thompson declined to disclose how much is being paid for Belvedere, it is believed the company shelled out about $33 million for the property, based on information in its 2005 annual report.
At present, only 1,300 acres of the Belvedere property are under orchard crops, which, according to Thompson, provides Seprod with "another 1,000 acres of arable pasture land which is unutilised." This underutilised acreage will allow Seprod to expand its dairy herd by an additional 1,800 heads and possibly increase its milk pro-duction by 50 per cent to about 7.5 litres a year. Serge Island has about 2,300 heads and produces about five million litres of milk annually.
"I don't expect to put cows in right away. We'll probably spend two, three years to reach the maximum," said Thompson. "As a matter of fact, I am going about rearing and retaining our good heifers in anticipation of that bit of expansion."
The dairy manufacturer's main competitors are Island Dairies, Nestlé and the Dairy Federation.
Thompson said the mango orchard at Belvedere presented export opportunities for the company, which had its beginnings as an agriculture-based co-operative to which coconut farmers sold copra for the manufacture of oil, soap and margarine.
"There is a lucrative export market for mangoes [in Europe," Thompson said. "It's within our core activity and we will look at the viability of it."
Even if the export plans fall through, Thompson said the company could engage in some sort of backward integration of the product since Seprod already produced UHT juices.
"Even if it (mango export) is not viable, we could look at processing it, making it into concentrate so that it can go into the mango and fruit juices which we produce," he said. "That's also an opportunity that can be explored."
For its three months to March 31 this year, Seprod reports a 57 per cent jump in its revenue to $1.2 billion compared to $$773 million while its net profit increased by 11 per cent, to $131 million.
