Having commissioned new warehousing space at its redeveloped complex in Kingston, Seprod Group is reporting that it has given up most of the storage space it leased in the wake of a fire a year ago and is projecting savings of a quarter-billion as a result.
The company has already commissioned a 100,000-square-foot warehouse at its complex at Felix Fox Boulevard – equivalent to the space that was razed at its Facey Commodity compound at New Port West in October 2021 – and expects to install cold storage units and finalise the outfitting of office space before the end of December.
The fire had resulted in the company turning to the use of third-party warehouses, resulting in “extraordinary warehousing and logistics costs”.
“The additional cost from just rent alone, when that disappears in December, the results are going to be substantially different,” said Seprod Group CEO Richard Pandohie. “That’s at least another $250 million to the bottom line,” he told the Financial Gleaner.
Two years ago, Seprod Group disclosed the plan to redevelop its base on the Kingston waterfront into a ‘logistics campus’ that was not just functional for business, but offered an aesthetically pleasing environment for staff, at a projected cost of $2.5 billion. The construction contract was awarded to BYD Construction.
When Pandohie first spoke about the redesign of the Seprod complex, he described it as a “self-contained mini-campus”.
“It will come complete with our corporate offices on a four-storey building, a training centre, extra parking and a daycare centre. This in addition to a 95,000-square-foot warehouse, bringing the total to 200,000 square feet of space for our logistics centre,” he said in September 2020.
In an interview this week, the Seprod CEO reaffirmed the project’s goal.
“We said from the beginning that this was not supposed to be a distribution outlet, but it should have a campus feel. It is creating an environment where the staff feels good to be there, so too our stakeholders. We want to add value to the community. It’s not just about profit,” he said.
The campus includes a park and features Christmas palms throughout the landscape. One large company, he added, has already called, enquiring about the contractors who did the aesthetic improvements.
“In developing the campus, Seprod has also given up another 50,000 square feet of space it rented from the Port Authority of Jamaica. This means that of the 200,000 square feet initially rented, Seprod now only occupies about 50,000 square feet of rented space. This, ironically, allowed Seprod to maintain revenue levels in the aftermath of the disaster,” said Pandohie.
For the third quarter ended September, which includes the results of its newly acquired AS Bryden distribution business, Seprod Group achieved third-quarter revenue of $23.64 billion, an increase of $12.31 billion, or 109 per cent, year-on-year. Profit climbed by 113 per cent to $1.05 billion.
Pandohie says the operational amalgamation of aspects of the AS Bryden Group began with people engagement, and would next move to the integration of other parts of the Trinidad-based business, which effectively exist in silos – that is, AS Bryden & Sons (Trinidad), which distributes food, hardware and housewares and premium beverages for international brands; Bryden pi, which distributes healthcare, personal care and food and grocery products for international brands; and FT Farfan, which has a partnership with a Guyanese company.
“My next step is to combine those properly. When that is done, the next step is to combine with Seprod in terms of the synergies. We have to be very cautious, but they’re meeting expectations,” Pandohie said.