Manufacturers should work more closely with Jamaican farmers

-- Wehby

BY KARENA BENNETT Business reporter

Thursday, April 02, 2015

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CHIEF Executive Officer of GraceKennedy Don Wehby is challenging local manufacturers to work more closely with small farmers to minimise the importation of produce that can be grown in Jamaica.

Speaking on Monday at the launch of a
book entitled Competing against Multinationals in Emerging Markets by University of the West Indies Professor Denzil Williams at the Mona School
of Business and Management, Wehby stated that the high cost of some productive inputs, including energy and other utilities, is a consistent and very serious issue for manufacturers.

"The energy issue is of particular concern within our GraceKennedy factories, and as such we continue to find innovative ways to minimise its impact," Wehby told the audience.

"We can also speak with authority on the challenges faced with regard to the cost of inputs. Again, we had to stop and take a serious look at that issue, and I want to share with you a success story that came out of our decision to address this at our processing plant -- Grace Agro Processors (GAP) in St Elizabeth," he added.

The CEO stated that in 2012, because of short supply locally, GraceKennedy was importing pepper mash from Costa Rica for use in the production of hot pepper sauces. However, the inconsistency of supply became an issue, which resulted in the company forming a solid partnership with over 95 local farmers in Hounslow and surrounding communities.

"We decided that we just could not go that route anymore, and we used that challenge and found an opportunity," he stated. "They produced the pepper and we used it in our manufacturing process which ensured us consistent supply, and today, we are exporting to other markets including the United States, United Kingdom and as far as Sweden."

In 2014, GraceKennedy produced 660,000 kg of pepper mash, up from the 325,000 kg it produced a year earlier. The company has now raised its target to one million kg this year, according to Wehby.

"Can you imagine the foreign exchange this will earn us?" he asked. "Sometimes I wonder how we can reproduce a model like this in Jamaica. A farmer came to me and said because of this arrangement and the assurance by GraceKennedy that they will be paid in terms of production, he can go to his bank and borrow funds to send his daughter to university. Can you imagine how I felt?"

"I would love to challenge all of us here to see how we can work closer with our farmers, the private sector and the public sector to reproduce a model like this to reduce our importation," Wehby added.

GraceKennedy is currently working to have such an initiative implemented in Bernard Lodge, according to the CEO. He added that working in partnerships can help local companies to compete better internationally.

"One of the things about small businesses, when you're exporting it is extremely important that you get a distribution company that can take you into the multinational stores like Walmart and Tesco," Wehby told the Business Observer.

"Let's face it, we have been at it for 93 years, so we now own our own companies in the United Kingdom, Ghana, Canada and the United States, and we have actually said to small manufacturers that if you have a product that we believe that can compete globally, come and speak to us because we will distribute it for you with our market-to-route distribution network," he stated.

Wehby added that GraceKennedy has already been distributing a number of local products that have garnered good recognition in international markets.

"Densil's book is really case studies with the issue of brand equity and how local companies can improve their success rates in international markets. The brand Jamaica is a very powerful brand -- and we have to capitalise on it throughout the world," Wehby said.

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