Seprod Limited (“Seprod”) recent announcement that it has reached an agreement to acquire A.S. Bryden & Sons Holdings (“A.S. Bryden”), is a combination that will according to Richard Pandohie Chief Executive Officer of Seprod, create the leading integrated manufacturing and distribution group in the Caribbean.
The combination will also position Seprod for regional supremacy.
To get a much clearer insight into:
1. What may have been the strategic driving force behind the acquisition, and
2. Understand what it has to do with Richard Pandohie’s single domestic market strategy
we have to look more closely at what A.S. Bryden & Sons Holdings Limited (“A.S. Bryden”) offers to Seprod that it does not already have.
But first let’s take a brief look at Seprod.
Seprod Limited (“Seprod”) is a preeminent regional food manufacturing, distribution and agribusiness group, founded in 1940 and is a blue-chip company listed on the Jamaica Stock Exchange (JSE: SEP). Seprod represents leading global and regional principals and also has a significant manufacturing base spanning oils and margarine, wheat and corn milling, integrated dairy and biscuits and snacks.
Importantly Seprod is a member of the powerful Musson Group of Companies (“Musson”). Musson is a diversified holding company that owns controlling stakes in a number of public and private companies in the Caribbean and Central America across distribution, manufacturing, insurance, information technology, logistics and real estate.
Musson’s subsidiaries and joint ventures include Seprod, Productive Business Solutions Limited, General Accident Insurance Company (Jamaica) Limited, T. Geddes Grant Distributors Limited, Interlinc Group Limited, Canopy Insurance Company Jamaica Limited and Felton Limited.
So, What Does A.S. Bryden Offer To Seprod?
A Single Domestic Market
Richard Pandohie Chief Executive Officer of Seprod has always considered that Caricom should operate as a single domestic market, and with this acquisition it will allow A.S. Bryden and Seprod to take a quantum leap in creating a regional company, utilizing the best of their Caribbean people to create value-added synergies.
Provides A Gateway To Guyana And Barbados Markets
It’s important and strategic to note that Seprod’s acquisition of the Trinidad based A.S. Bryden, provides gateways to both the Guyana and Barbados markets. One of the A.S. Bryden subsidiaries, Bryden pi through its wholly-owned subsidiary Genethics, operates in Guyana through its subsidiary BPI Guyana and in Barbados through its joint venture Armstrong Healthcare Inc. Limited.
Deep History And Roots In The Region
A.S. Bryden, which has deep history and roots in the region, having been founded in 1923 and operating in Trinidad for almost a century. is a leading consumer products distributor and is one of the largest privately-owned businesses in Trinidad.
How Does A.S. Bryden Make Money?
A.S. Bryden is a privately held company, so financial information on the company will not be readily available until we can view the financial reports from Seprod following the acquisition. What we do know is that A.S. Bryden distributes food, pharmaceuticals, hardware, houseware and industrial equipment, and operates through three principal operating subsidiaries:
1. A.S. Bryden & Sons (Trinidad) Limited (“ASBT”),
2. Bryden pi Limited (“Bryden pi”) and
3. F.T. Farfan Limited (“FT Farfan”).
ASBT distributes food, hardware and housewares and premium beverages for international brands including Mondelez, Whirlpool, Rubbermaid, Truper, Reynolds, Colcafe, Bon ice cream, Cadbury, Johnnie Walker, Hennessy, Moet Chandon, Red Bull, Black & Decker, LG, KitchenAid, Oster and Speed Queen.
Bryden pi distributes healthcare, personal care and food and grocery products for international brands including Kimberly Clark, Mead Johnson, Baxter, Roche, Glaxo Smith Kline, L’Oreal, Novartis, Sanofi and Sandoz.
Bryden pi also manufactures a line of over the counter products through its wholly-owned subsidiary Genethics and operates in Guyana through its subsidiary BPI Guyana and in Barbados through its joint venture Armstrong Healthcare Inc. Limited.
It’s not yet clear how FT Farfan, which is an industrial supply and service company that serves leading international brands including Stihl, JCB, Castrol, Shell Marine, Cummins and Lincoln Electric, fits into the current Seprod business structure. It’s possible that this company could be sold for its parts. However, with the rapid economic developments taking place in Guyana, driven by large investments taking place in the petroleum sectors FT Farfan, which operates in Trinidad and in Guyana through its subsidiary Ibis Construction Equipment Sales & Rentals Inc. (ICON) Guyana could be a strategic player.
The EVE Brand
Both Seprod and ASBT own the Eve brand and range of products in their respective markets, which positions this brand for a major regional push, and could become the combined entity’s primary Caribbean brand.
EVE, positioned by Seprod as “First Family of Fine Foods”, and one of the most complete food brands worldwide, has become synonymous with fine quality products at economical prices. The EVE brand holds 6 categories: Pasta, Oil, Seasonings, Canned Vegetables, Canned Meats, Canned Juices, Vinegar, Jams/Jellies, Condiments, Sauces, Coconut Oil and Coconut Milk. Eve is arguably the most complete food brand on the Jamaican market and can be found on tables not only in Jamaica but throughout the islands the company notes on its website.
Businessuite Top 100 Caribbean Player
Together Seprod and A.S. Bryden, with combined annual revenues projected to be in excess of US$500 million could position Seprod into the Top 10 of the Businessuite 2022 Top 100 Caribbean Companies by US$ Revenue.
With revenues of US$264M, Seprod was positioned at #16 for 2021, behind such giants as Massy Holdings Limited at #1 with $1,775M, GraceKennedy Limited at #3 with $809M, and Jamaica Broilers Group Limited at #11 with $390M. To move into the top 10 for 2022 A.S. Bryden will have to contribute at least US$250M, which gives some indication of the kind of revenues the privately held company generates.
Single Operating Caribbean Brand
With Richard Pandohie serving as interim Group Chief Executive Officer of A.S. Bryden he will be well positioned with all the pieces in front of him to shape this new regional entity, operating in his vision of a Single Domestic Market.
Operating under one regional Seprod brand has to be a major part of the game plan going forward.
Given the long history and operation of A.S. Bryden, this will not be an easy or over night move. This will have to be done with careful consideration to local sentiments.
In this regard Richard Pandohie, will want to look and maybe learn from how the rebranding of the Neal and Massy Group of Companies to Massy Group was recently executed.
According to Massy Group CEO Gervase Warner this was not easy but the conglomerate’s vision for the future required that the brand be overhauled. He said the decision was difficult because over the past nine decades Neal and Massy became a household name, not only in T&T, but the Caribbean and parts of Central America.
“We wanted to make sure that whatever we came up with represented growth–businesses that worked and grow together. We also wanted prosperity, good economic, as well as community prosperity to be incorporated in this process and of course, we wanted it to be representative of the Caribbean basin. We wanted it to be a brand that people would look at and say this thing looks friendly, warm and everything Caribbean. So, we did that. We started to search for different names that would embody the manifesto that we put out before. After all the brainstorming, we just kept coming back to Massy. Massy was a strong name. People already abbreviate Neal and Massy to Massy. They are going Massy. They (are) taking their car Massy. Massy is a strong name, a name that translates well on the Latin American market that we would go into. Mass is more, si is yes. You want more? Yes! So, we went with Massy.” he said.
Management Shakeup
According to the release A.S. Bryden will continue to operate as an independent, standalone company and its subsidiaries: A.S. Bryden & Sons (Trinidad) Limited, Bryden pi Limited, and F.T. Farfan Limited, will continue to be managed by their existing executive teams.
However, many expect that over time Pandohie will start to move into place management who can help him realise his vison. Seprod has a track-record of supporting and motivating high-performing management teams and has demonstrated a keen understanding of local markets.
Speaking on the landmark regional transaction, outgoing A.S. Bryden Chairman, Ian Fitzwilliam stated that Seprod shares many of A.S. Bryden’s core values, and that he was confident that Seprod will maintain A.S. Bryden’s culture and identity and build on their proud history by investing in their people and businesses.
For his part Seprod Chairman, P.B. Scott, commented that “A.S. Bryden is an exceptional business run by outstanding people. We are privileged to be the stewards of A.S. Bryden’s heritage and to have the opportunity to work with its talented leadership team. I am excited about our ability to join forces and better serve our employees, customers and distribution partners at Seprod and A.S. Bryden.”
If Richard Pandohie is to create and realise his vision of a Single Domestic Market he may have to cherry pick from this, discarding with dispassion what does not fit.
Subject to regulatory approvals and other customary closing conditions, the transaction is expected to be completed by May 31, 2022.