Securing Your Future Is Our Main Investment

Updated: 28-03-2024 - 12:00PM   8 6 CLOSED

Financial News

Feb 2014 Financial News

GK to enter manufacturing in Africa - Sets up subsidiary to handle own distribution

Feb 14, 2014

Food and financial services conglomerate GraceKennedy Limited is setting up its own distribution business in Africa, starting with Ghana this month through new subsidiary GraceKennedy Ghana Limited, and is already laying the groundwork to start manufacturing from the continent.

"Yes, expansion into manufacturing is being considered and investment will be in the region of US$10 million," said GK Group CEO Don Wehby.

The distribution of the conglomerate's products was originally outsourced to an unnamed firm in Ghana, and was overseen from the United Kingdom by Grace Foods UK Limited, said Wehby.

The effort crumbled because that distributor's core business was in disposables.

Now GK will have a physical presence in the country, headed by business development specialist Jerome Miles.

Miles joined GraceKennedy in Jamaica as business development manager in May 2005, working as part of the mergers and acquisitions team.

In 2007, he transferred to Grace Foods in the UK as director of supply chain and has since held the positions of general manager of Funnybones Foodservice Limited and general manager - services. He currently holds the position of general manager - export east overseeing Africa, the Middle East, Far East and Australia.

In Ghana - where revenue was up 77 per cent last year, said Wehby - GK's initial focus is on the distribution of Grace-branded beverages, Tropical Rhythms, Mighty Malt and Ginger Beer, as well as corned beef. Wehby said the company will next launch Grace's range of spices.

GraceKennedy is seeking to deepen markets in Africa, overall, with a concentration on beverages.

In the Nigerian market, where the focus is on powdered seasonings and Nurishment milk drink, GraceKennedy distributes its products through a Nigerian partner, but the management of that market will be done by GK Ghana Limited team, said Wehby.

Wehby said that the conglomerate is starting a programme of training and rotation of its management team, some of whom will take up new positions in locations overseas to gain international exposure.

Staff will be rotated to Canada, the United Kingdom, Africa and the Caribbean. "We also have non-Jamaicans working here, so that they can become embedded," Wehby said.

"You can plan financial strategy, but you will not be able to accomplish the vision if you don't have the right people," he said.

well advanced in its strategy

Eight years before GK celebrates its centennial, and four years into a strategic plan to achieve 50 per cent of revenue from non-Jamaican sources by 2020, Wehby said that the group is well advanced in its strategy to position as a global consumer group.

"When I took over in July of 2011, I redesigned the vision of GraceKennedy to be that of a global consumer group, whereby 50 per cent of profit will be generated outside of Jamaica by 2020. Our last results showed that we were at 37 per cent, with 63 per cent of earnings inside of Jamaica," said Wehby.

A second plank of the strategy was to generate 15 per cent of revenue from three different continents - North America, Europe and Africa, and a third, to leverage the relationships with international partners.

The joint venture with Western Union Company, under which the American firm acquired 25 per cent of GraceKennedy Money Services Caribbean, is one aspect of this type of relationship building, as cited by Wehby. That deal was struck back in 2007 under former CEO Douglas Orane.


Source:
Avia Collinder, Business Reporter
avia.collinder@gleanerjm.com
Jamaica Gleaner
Friday February 14, 2014

http://jamaica-gleaner.com/gleaner/20140214/business/business1.html