JAM | Jun 6, 2023

2022 was tough but GraceKennedy tenaciously committed to 2030 vision

Al Edwards

Al Edwards / Our Today

Reading Time: 6 minutes
(L-R) Gail Moss-Solomon, General Counsel and Corporate Secretary, Andrew Messado, Group CFO, Prof. Gordon Shirley, Chairman, Don Wehby, Group CEO

“Individually we are one drop, together we are an ocean,”Ryunosuke Sataro

Group CEO of Caribbean conglomerate GraceKennedy, Don Wehby is seeing to it that the downtown Kingston-headquartered company with its extended business arms lives by this credo.

The year 2022 was a challenging one for Grace but it nevertheless put in a noteworthy performance with its Food Division doing particularly well contributing J$11 billion to Group revenues.

At its annual general meeting (AGM) held at its downtown Kingston offices, Wehby pointed to revenues for 2022 were up by J$13.6 billion or 10.5 per cent on last year to $143 billion.

Of that revenue figure, 56 per cent come from Jamaica with 44 per cent outside of its home base.

The group posted profits of $10.2 billion which fell by 12.5 per cent. Profit after tax came in at $7.6 billion.

Assets came in at $200 billion, registering a growth of $1.2 billion. Stockholder’s equity of J$70 billion allowed Grace to pay out more in dividends.

(L-R) Gail Moss-Solomon, General Counsel and Corporate Secretary, Andrew Messado, Don Wehby, Group CEO

The first quarter of 2023 is most encouraging and saw Grace generate revenues of J$39.1 billion with growth across all business segments. Profits went up by 20.6 per cent to $2.3 billion.

According to Wehby all indication are 2023 is going to be a very good year with the Food Division in the Jamaican market showing strong growth. The way he sees it, manufacturing is a competitive advantage for the GraceKennedy Group of companies. It has invested over J$2.5 billion in improving its manufacturing efficiencies over the last five years. In the next two years it aims to have 50 per cent of its Jamaican manufacturing plants output servicing export markets.

Addressing shareholders, Wehby said: “ Profit is an opinion, cash is a fact. I never externalise results. I never say the company’s performance was below standard because of something external. I always put our results in context. 

“Individually we are one drop, together we are an ocean.”

—Ryunosuke Sataro

“The year 2022 was very challenging which saw rising inflation. We have not seen inflation so elevated for some time. This has had an impact on the disposable income of our brothers and sisters in the Diapora who have less money to send home. Now that impacted our Group negatively. Remittances in Jamaica were down by 2 per cent.”

Clear skies look ahead for GraceKennedy after a bout of turbulence. Wehby pointed to an improvement in freight rates.

“In the height of the pandemic we were paying US$17,000 per container and now that is down to US$2,500 which is a significant drop. However, it is not quite what it was pre-COVID which was US$1,700.

GraceKennedy Building, Downtown Kingston, Jamaica

We are still seeing inflationary pressure on the cost of raw materials. Increasing interest rates have impacted the equities market in Jamaica. This has seen portfolio managers moving from the equities market to the fixed income market with 7 to 8 per cent on deposits. This has impacted GraceKennedy’s share price as well as those of other listed companies.”

The foreign exchange (FX) movement was also a factor to consider and proved a unique impediment to Grace. The pound sterling depreciated against the US dollar by almost 12 per cent. The Canadian dollar depreciated against the US dollar by almost six per cent. The Jamaican dollar appreciated against the greenback by nearly per per cent.

“Now you can understand if the major currencies around the world are depreciating and the Jamaican dollar is appreciating that doesn’t spell good news for the GraceKennedy Group,” lamented Wehby.

The Group CEO and his leadership team have come up with six strategic drivers to improve revenue and profitability The team meets every Monday morning to monitor improvements and decide what must be done.

The drivers are: 

  • Grow revenue
  • Improve operational efficiencies
  • Facilitate Mergers & Acquisitions
  • Customer Engagement
  • Monitor supply chains and service levels
  • Keep an eye on working capital and cash management

On the ‘Mergers & Acquisition’ side, Grace now owns 70 per cent of Catherine’s Peak Spring Water and 100 per cent of 876. Both brands are expected to grow by double-digit this year.

Grace also acquired a stake in Larren Peart’s data insights company Blue Dot.

It made a further move in the insurance business acquiring both Scotia Insurance Caribbean Limited and Scotia Insurance Eastern Caribbean Limited. Both these companies were profitable and generated good revenue. This move now gives Grace a presence in 13 Caribbean countries. Now what must be considered here is that in 2020, Grace was not in involved in life insurance.

In order to further optimize its insurance business, it has engaged the services of  Haven Technologies to expand access to the insurer’s creditor life products.

Haven Technologies will leverage its advisor new business, underwriting, policy admin, front-end advocate, claims and migrator solutions.

Don Wheby, Group CEO at GraceKennedy AGM

Haven Technologies is a subsidiary of Mass Mutual, which in turn is a US$23 billion company.

“This will be a game changer for the GraceKennedy Group. We are going to be introducing technology for life insurance which has never been seen before in terms of acquiring customers, managing and distributing insurance experiences. You will be hearing a lot more from GraceKennedy in this space,” proclaimed Wehby.

He went on to say that Grace is all in with digital transformation. Wehby recounted engaging top global consultants McKinsey who told him if Grace didn’t transform its businesses digitally, the group would become a dinosaur.

“If you think about it, 93 per cent of the remittances coming into Jamaica is cash and seven per cent is digital. However, digital is growing at over 30 per cent but cash is not growing at all. Now that is something to pay attention to. We currently have over 200 locations and with our new partnership with Courts will be looking to take that to 250,” informed the Grace CEO. 

This year many big Jamaican companies have had incidents of fraud and cyberattacks. To date, these heinous acts have not befallen GraceKennedy. 

(L-R) Don Wehby, Group CEO, with Orette Staple, Shareholder

“At GraceKennedy we don’t benchmark against companies only in the Caribbean. We benchmark against the world’s best. The world’s best must measure us. A part of our culture is to have good controls and systems in place,” Wehby explained.

Under the stewardship of Gail Moss-Solomon, general counsel & chief corporate secretary, GraceKennedy is committed to putting in place a robust environmental, social, governance (ESG) policy.

“This is going to be a win for the society, win for the shareholders and a win for GraceKennedy,” announced Wehby.

The goal is to see to it that by 2030, GraceKennedy becomes the number one Caribbean brand in the world, with Jamaican roots and a global reach. To continue building on the pillars of financial services and food, to provide shareholders with strong returns and improve the quality of lives of its team members and its greatest asset, its customers and communities.

The target has been set that by 2030, 70 per cent of its profits and revenues will come from outside of Jamaica. By that time Grace will be a company doing US$2.5 billion in revenues and US$250 million in profit. 


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