Pinnacle Feeds Ltd, a subsidiary of Roberts Manufacturing Company Ltd, is exploring the possibility of engaging alternative suppliers of corn and soya for the manufacturing of its feed products to help drive down cost.
Peter Bunting, Chairman of the board of directors of Roberts Manufacturing, made the revelation on Wednesday, noting that company officials were looking to the South American region to source products cheaper and faster.
“We are examining, very actively on the operation side, [alternative suppliers],” he said.
“[We are] strategically exploring alternative sources of supply. Currently we get our commodities primarily out of the United States but we are looking at South America very actively because Brazil and other countries there produce many of these commodities and shipping wise [it is easier],” he said.
Bunting noted that Roberts Manufacturing was not spared the impact of the global shipping challenges and shortages of some supplies, especially at the height of the COVID-19 pandemic.
He explained that sourcing the items could take a long time and therefore any change in commodity price would not be immediate.
Noting that supplies were usually ordered months in advance, Bunting explained that the corn has to travel through the Gulf of Mexico by barge before being transferred to grain elevators for storage and then to ships which have to make stops along the way before arriving in Barbados.
“It is a long lead-time after purchasing, before that corn and soya are milled and manufactured here. The prices are locked in about three months ahead. So if you heard tomorrow corn prices drop 20 per cent you would not see that benefit until month three or four down the road. A lot of the costs we are seeing now are the costs that are passing through from last year,” he explained.
Bunting admitted that while sourcing the items closer to home may result in faster delivery, it may not always result in significant cost savings.
“It is an international commodity so you are not going to find huge differences because wherever you are growing it that supplier is going to benefit from global market prices as well, but there are always opportunities from time to time given a good crop or a drought here. We are putting in place a purchasing approach that would exploit whatever opportunities we see,” he said.
(MM)
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