Byron Thompson, managing director, Seprod. - File

Seprod Limited is employing the latest in technology to boost efficiency and reduce costs, investing $10.6 million in a software package being rolled out across its seven subsidiaries to manage its huge inventory of machine spare parts critical to its day-to-day operations.

But company officials are not saying what level of savings is expected from the latest technological upgrade even as they insist it is not designed to cut jobs.

"It tracks and tells us when to purchase machine parts, spare parts and when repairs are needed as well as allows for better inventory management of spare parts," Byron Thompson, Seprod's managing director, said of the new software, Maximo, which will cost an additional US$50,000 in annual licensing fees.

Thompson said Maximo is expected to maximise efficiencies within the manufacturing company, whose net worth exceed $6 billion.

St Thomas sugar factory

Its newly acquired sugar factory in St Thomas will also be brought into the new inventory system, he said.

The company and its partner, Fred M. Jones Estate, took possession of the factory in mid-July.

Thompson would not divulge the investment being made, but last year the company reported a 94 per cent jump in capital expenditure from $205 million in 2007 to $398.5 million in 2008.

Seprod is in the business of producing and distributing edible oils and fats, cereals, other foods and beverages, personal-care and household consumer products.

Manufacturing accounts for the lion's share of the company's $4.9 billion half-year revenue to June, 13.5 per cent more than it brought in the first six months last year.

Its distribution business contributed $1.9 billion.

Four of the Seprod's seven subsidiaries are involved primarily in manufacturing activities, and savings in this area are likely to have a major multiplier effect on the business' bottom line.

Group Financial Controller, Carl Domville, said the information system being built is not designed to affect jobs in any way.

"It is a preventative maintenance system which allows you to take pro-active steps in getting repairs done rather than wait for the machines to break down," he explained.

The inventory-management software was first tested in Seprod subsidiary, Caribbean Products Company Limited, a high-tech refinery on 16 acres along Spanish Town Road in Kingston that produces cooking oil, margarine, shortening as well as plastic containers.

With encouraging results from improved equipment uptime, fewer breakdowns and better adherence to maintenance schedules, Maximo is about to be rolled out in other Seprod operations such as Serge Island Farms and Dairies Limited, International Biscuit Limited and Belvedere farms.

Seprod, largely owned by conglomerate Musson and the Coconut Industry Board, runs the largest dairy operation in Jamaica through Serge Island Dairies, the manufacturing arm of its 2,000 acre farm in St Thomas.

The dairy operation has been undergoing a major modernisation and expansion aimed at ramping up milk production to about nine million litres over the next three to four years.

"We are progressing well with the expansion, said Thompson.

"Last year, we produced 5.4 million litres of milk; this year, we are on track to produce about six million."

International Biscuits is the former local manufacturing arm of Kraft Foods, acquired by Seprod two years ago.

It makes several popular brands of biscuits, cookies and crackers.

Full implementation

Next in line for the full implementation of the system by the end of this year, according to Seprod, is Jamaica Grain and Cereals, the dry-milling plant that produces a wide range of corn products.

"It has been done in some of our existing plants and with the acquisition of the factory in St Thomas, we will move to implement it there as well," Thompson said, indicating Seprod's intention to apply the technology to the former Duckenfield sugar factory it recently bought from the Government in partnership with Fred M. Jones Estates in a 55 per cent/45 per cent joint-venture partnership.

At June, Seprod reported fixed assets of $2.2 billion and a six-month operating profit of $1.3 billion, up from the $752 million it made in the corresponding six-month period last year.

But with increasing finance cost, net profit for the first six months this year came out at $926.6 million.

Shares in Seprod last traded at $14.50 on the Jamaica Stock Exchange.

sabrina.gordon@gleanerjm.com.