Seprod bemoans drop in dairy business

New climate change challenges including heat and drought have further weighed on Seprod's dairy business, cutting milk production at the start of the summer season by almost half, CEO of the company Richard Pandohie has said.

"This year our milk production has dropped as a result of the heat and drought conditions which have been impacting all areas of agriculture. Whether with animals or plants, this year has been very tough, especially in light of the unprecedented heat and drought conditions," Pandohie stated.

"During the height of the drought and temperature we experienced, our milk production went down by almost 45 per cent, resulting in losses per month in the region of approximately $50 million," he further said during an interview with the Jamaica Observer following the manufacturing and distribution company's 84th annual general meeting held last Wednesday.

Seprod has the island's largest dairy operation through its Serge Island Dairies subsidiary which processes millions of litres of fresh and flavoured milk at its plant in Bog Walk, St Catherine. It also has about 5,000 cows on its 2,000-acre Serge Island Farm in St Thomas according to its website, which lists annual production at 7 million litres of milk.

Having lost out on earnings during the novel coronavirus pandemic due to sick cows and increased rainfall, the dairy business, which has been struggling to make a comeback, is now further burdened by new challenges. According to the company's 2022 audited financial filings, expenses for feed, chemicals and veterinary supplies totalled $660.8 million, up from $532 million in the year prior. This, however, did little to scathe group earnings which grew to $2.9 billion for the year backed by record revenues of $78.4 billion.

Labelling the impacts as 'rough', Pandohie said that much effort is being made to keep the business afloat. He pointed to the roll-out of products such as a almond milk, manufactured under the Eve brand, along with others to come, as part of plans by management to claw back lost revenues under its milk segment.

"We're looking at all the alternatives and very soon we will be expanding our almond milk to an unsweetened version and then we will be moving on to an oat milk, so customers can be on the lookout for those two coming very soon. Plant-based dairy, we have noticed, has been in demand in a lot of other markets, so it makes sense for us to go after these value-adding options," he also told the Business Observer.

Similarly, the CEO informed that with the company having recently started to export its condensed milk product, it is also looking to bring additional revenues to the milk segment.

"Condensed milk sales had declined over the years but what we have noticed since this year, for the first in a long time, is that we are starting to see positive movements in this area. Capitalising on the opportunities we have seen, we have also decided to put condensed milk in the export market and we are now supplying the product to the US and other countries," Pandohie said.

Pandohie said investments have been made to help the company overcome supply chain challenges especially those impacting packaging materials and production. At the same time he bemoans the costs the company pays to secure the animals against praedial larcenists among other challenges being faced, but remained committed to the dairy industry.

"We have to make our dairy business work, as tough as things get, because if we don't, there will be no dairy business in Jamaica," Pandohie said.

Source: Jamaica Observer
October 4, 2023