Caribbean conglomerate The Massy Group celebrates its centenary this year, having closed 2022 with a number of significant acquisitions.

Gervase Warner is leading the charge in transforming the Group and drilling down on its circle of competence thus creating greater returns and becoming  a leader, not simply a competitor in the businesses it enters.

The Massy Group will no longer be all things to all people. That era has ended.

For the 12-month period ended September 2022, Massy posted revenues of TT$12.3 billion, a significant increase on the TT$11.14 billion posted for 2021. The year 2022 saw Massy generate a profit of TT$858 million, a big jump on the TT$321.7 million posted for the prior year. It now has assets of around TT$12.6 billion and that is expected to grow as it extends its footprint across Latin America and the Caribbean (LAC).

At the end of last year, Massy made a move to acquire a 100 per cent of ICL Jamaica for US$140.3 million, a deal which is awaiting regulatory approval from Jamaica’s Fair Trade Commission (FTC). The share purchase agreement has already been signed.

It also bought Florida-based Rowe IGA supermarkets for US$47 million. This group has seven stores in Jacksonville.

It was not all about snapping up assets last year. Massy divested itself of Massy United Insurance Limited as it exited the property and causality insurance business.

So what is the plan for 2023?

“People refer to us as a conglomerate, but we think that term has some baggage associated with it – like one is some multi-business behemoth. We see ourselves as more of an investment holding company, developing a discipline in what we will invest in. Massy was known as a buyer of last resort with a slew of businesses from real estate, shipping, pet food – we would buy anything.

“Now what we have done is look at this portfolio and screened it, asking the question, what are the real businesses we have scale and competence in? What are the businesses we can grow and expand internationally?

“We did that and came up with a portfolio comprised of three industries, namely: 1. Integrated retail. 2. Gas products. 3. Motor services ( car dealerships and heavy equipment),” explained Massy’s Group CEO.

Everything else is non-core however the remittance business  provides important foreign exchange for the Group. Massy Finance GFC has a foreign exchange licence as well as being tightly coupled into the lending for its car dealerships in Trinidad. It also serves as the corporate treasury for the Group.

Capital will be concentrated into the three above mentioned pillars.

The slew of acquisitions comes after a period of Massy divesting non-core businesses. It did well with it insurance business and it would have been tempting to keep operating it but a good price was fetched and the Group remained dedicated to the plan of the three pillars.

Much more consolidated position in Jamaica and in the Caribbean

“The money we get from selling non-core assets, we put into industrial gases, supermarket retail, motors and machines which means we get a better return, so it is about  portfolio management now. We have a better growth trajectory with those investments than we would have had holding onto businesses like Massy United Insurance.

“Take the case of Massy Technologies. People ask how could you divest yourself of emerging companies with technology being so important these days? Now that gave us something to think about and we went back and forth with that, but we deemed it a technology service provider and not necessarily an innovator. What we needed was technology solutions in our core businesses.

“We sold that business and saw a good return on invested capital. Truth be told, we were struggling to grow it outside the English-speaking Caribbean. We thought PBS would be better at it than we were and there were synergies there. We got a good price for it so why not take that capital and that what we got from Massy United, Roberts Manufacturing and put it into businesses we know very well like IGL in Jamaica? This gives us a much more consolidated position in Jamaica and in the Caribbean in terms of ability to buy and scale.

“The backward integration process is key. The Air Separation Unit (APU) business in Trinidad is 50 times the size of the IGL oxygen plant in Jamaica and much larger than the plant we are putting down in Guyana. So, the scale of that in terms of the unit cost of oxygen produced, nobody else in the region has that! In the space of industrial gasses…. oxygen, nitrogen etc we are the biggest exporter across the entire region,” declared Warner.

The supermarket chain acquisition in Florida is certainly a bold move given the question, why does Massy think it can compete in this highly competitive sector?

But it can and here’s why.

The diaspora is growing and is set to do so for some time to come. It houses people of the Caribbean who are more literate and earn more, not to mention yearn for a taste of what they consume back home. This will be passed on to coming generations inculcated by their parents in the ways of the Caribbean.

As a long-term investment strategy, it is a smart play. Also, Massy knows how to run supermarkets.

Rowe IGA supermarkets has an ethnic appeal but is also a suburban outlet which serves a panoply of palates including mainstream America.

Warner has a way of distilling Massy stratagems into readily understandable homilies that doesn’t require unusual acumen or insights. He has a management gift and one can see why his team pulls for him.

“Once you are serving people’s needs and treat them properly, they remain loyal. They work well for you and delight your customers and that leads to profitability. You must ensure you therefore reward them well.

“This year is largely going to be about integrating these businesses into the Massy portfolios seamlessly. I don’t think we will be engaging in another round of big acquisitions in 2023 but you know, never say never. It’s one thing to run down the bus – it’s another thing to know what you are going to do when you catch it.

“For us, it is important to take who we are as Massy and bring that to the organisations we acquire. We have found that unlocks greater engagement with our employees. We have values, we have purpose, we want to be a force for good. We look to create value and transform lives. We take that seriously. We try to make sure people have a way to connect, to fulfil their purpose in life through the work they do with us. We try to treat people with respect, with love, with care. Empower them to develop the strategy, share ideas, look for improvements. All this leads to greater profitability and then we share profits with you.

“All this is not just applicable to the Caribbean. It is applicable to Colombia, the United States, Europe, Africa… because people are people. They like to be respected, appreciated, treated well, and rewarded.”