DON Wehby, GraceKennedy’s new CEO, follows in the footsteps of his legendary predecessors, Carlton Alexander, Raf Diaz and Douglas Orane, men who were regarded as some of the best CEOs produced from the Caribbean. They left big footprints and many feel that Wehby is more than able to walk in those shoes. The more established corporate heads in Jamaica view Wehby favourably and regard it as just, that he takes his rightful place at the helm of Jamaica’s leading indigenous corporate entity. Younger business leaders have long hailed him as the prince in waiting and the one to champion 21st century business practices in the country.

The new boss at GraceKennedy has wasted no time in declaring how he intends to maximise shareholder value and further entrench the GraceKennedy brand. Speaking with Caribbean Business Report, Wehby said: “We have now established four strategic themes or rally drivers. The first is sustainable growth and innovation. Secondly, to become more consumer-centric, thirdly look to increase our operational efficiency. The fourth rally driver is to create and drive performance and our culture.”

For the half year ended June 30, 2011, GraceKennedy Limited (GKC) reported a diluted EPS of $3.68, this represents a 1.1 per cent decline in earnings from the $3.72 reported in the comparative 2010 period.

In comparison to the first half of 2010, GKC registered a 3.2 per cent increase in its revenues to J$29.0 billion. This growth stemmed particularly from the largest revenue contributing sector, Food Trading. Revenues here gained 9.4 per cent over last year and accounted for 66.3 per cent of the overall Group’s top-line. In its second quarter, GKC would have benefited from strong domestic market performance as sales were boosted because of the Easter period. On the international front, the Group’s UK subsidiary continued to experience growth in its sales. GKC’s Retail and Trading sector revenue also grew, recording a 6.3 per cent year-on-year improvement over 2010.

Expenses for the Jamaican conglomerate was 4.5 per cent higher than the J$26.4 billion registered in the first half of 2010. Overall, the Group’s Profits from Operations were down 8.2 per cent to J$1.9 billion. The fall here would have been mitigated to some extent by the 24.1 per cent year-on-year increase in Other Income. GKC’s operating profit margin declined marginally from 7.5 per cent in HY 2010 to 6.7 per cent in HY 2011. Interest Income fell 11.9 per cent to J$175.5 million, while Interest Expenses declined 22 per cent year-on-year.

Food, glorious food!

Wehby is pleased with the performance of the Foods Division and ascribes this in part to operational efficiencies through a US$31-million investment in a distribution centre. This has helped to improve supply to its customers.

“We have been very focused on building the Grace brand and in Jamaica the brand has been growing particularly well. This has contributed to the improved performance of the Foods Division. It has been a mix of operational efficiency and driving the revenue particularly through the Grace branded products that has worked well for us with this revenue stream.” There has been some speculation that with Appleton Rum now floundering due to well-known problems at Lascelles, its parent company, it would make an attractive acquisition target for GraceKennedy. Wehby made it clear that Grace would not be interested in such a move at this point in time. “No, not at this time. We are concentrating on food and financial services. One can argue that Appleton would fit well in our Foods portfolio but we will continue to watch with interest how Blank Sands acquisition bid fares. We are not interested in acquiring Lascelles. Strategy is about making choices and we have already outlined how we intend on growing our business.”

First Global

The financial services landscape has seen a number of efforts made to consolidate and bolster operations by acquisitions and mergers. More recently there has been the proposed acquisition of Capital & Credit by JMMB, and Scotiabank took over Dehring, Bunting & Golding’s (DB&G) interests. With the sector seeing many players chasing fewer dollars during a time of growing austerity and financial uncertainty, mergers and acquisitions may well be the new reality. First Global is regarded as a small player but can it become a bigger one through mergers and acquisitions? Is this the way to go if it is going to compete successfully with the likes of Royal Bank of Canada, Scotiabank and CIBCFirstCaribbean?

“There is no doubt the competitive landscape has changed largely due to the JDX. Upcoming capital requirements by the Financial Services Commission (FSC) has made things even more difficult for many financial sector players, more notably the smaller ones. This means there will be additional pressure in terms of capitalising financial institutions. Based on our assessment BNS and NCB have about 80 per cent of the market. I would not be surprised if we see some consolidation in both the securities brokerages and commercial banking industry,” explained Grace’s new boss.

Management style

Wehby is said to have an easy-going management style that gets results. He likes to communicate personally with the staff on all its levels and spends considerable time in the ‘trade’, thereby getting a first- hand experience of the business at work. He places great stock in being consumer-centric and pays avid attention to consumer trends and statistical data.

“I intend to lead from the front. I want to create a culture of excellence in the GraceKennedy Group. I think it is very important that we place great importance on how we treat our staff. We must strive for excellence in innovation and operational efficiencies. We will have a culture of accountability and execution. As managers it will be vital to hold each other accountable in terms of what we promised. If you do things right the first time, then more often than not the journey has been covered.

“My colleagues will tell you, that I am very firm on meeting goals that were promised. My budget reviews tend to be detailed exercises in terms of how can we ensure that we hit our targets. I am driven in terms of meeting our objectives. How would I assess myself? I am a very positive person in terms of the outlook for the GraceKennedy Group,” explained Wehby.

So what did he learn from his predecessor, Douglas Orane and what does he take from his mentor who has now handed him the baton?

“There’s a lot of talk right now about youth but Douglas (Orane) appointed me as CFO 15 years ago which was then unheard of. He is a visionary and a great strategic thinker. He is always willing to coach the younger generation and I benefited enormously from his coaching. We spent much time discussing the future of GraceKennedy and very few people get the opportunity to spend time with such a giant. I hope to build a young executive team to take the Group forward. Douglas carefully managed succession planning and I would like to do the same some day.”