FOOD and financial services conglomerate GraceKennedy Limited hopes to bring on-board its new Ghana distributor by the end of 2019 in line with its mandate to achieve 60 per cent revenue outside of Jamaica.

Group CEO Don Wehby made the announcement on Wednesday during the company’s annual general meeting at its new headquarters on Harbour Street, downtown Kingston.

GraceKennedy’s vision of being a global consumer group includes achieving 60 per cent of all revenue outside Jamaica. For 2018, the group generated 47 per cent of its revenue outside Jamaica, compared to 49 per cent in 2017.

“We have said and we still maintain that West Africa is going to be a key revenue driver for the GraceKennedy Group. We have done quite a bit of research on that; I also said last year that we will have to revisit our strategy and business model in Ghana,” the CEO said.

“We are just about finalising that distributor who represents good brands in Ghana, and I’m hoping that by the second half of this year, we start our business through a third-party distributor,” Wehby continued.

GraceKennedy entered the African market through Ghana in 2012. That same year, the company reported $41 million in revenues and later set a target to generate 15 per cent of revenues from the continent by 2020.

But revenues started dwindling in 2014/15 when GraceKennedy began experiencing difficulties with its West Africa distributor whose core business was in disposables, in addition to increased import duties on malted beverages, rebalancing of the product portfolio, the restructuring of the sales team and the transition from distributor model to own operation.

At the end of 2018, Africa’s contribution to GraceKennedy’s overall revenue worsened to $29 million from $125 million in 2017. The dip in sales from the continent resulted in Africa being red-flagged as non-contributory to the group’s overall revenue.

In response to slowing sales in Africa, GraceKennedy announced plans to invest roughly US$10 million in setting up its own distribution business in Africa, starting with Ghana, through new subsidiary GraceKennedy Ghana Limited.

However, after due diligence, GraceKennedy decided that it was more efficient for the company to use a third-party distributor for goods in Ghana and not to own real estate.

“I still remain positive that West Africa is going to be a key revenue driver, but sometimes strategising and planning things takes time and we have to think it through. I’m confident that we have made the right decision.”

In Ghana, GraceKennedy’s initial focus is on the distribution of Grace-branded beverages Tropical Rhythms, Mighty Malt, Ginger Beer, along with corned beef, as well as GraceKennedy’s range of spices.

The publicly listed conglomerate is the parent company of a group of subsidiaries operating mainly in the food and financial services industries. The group’s operations are structured into two divisions: food trading which comprises the business of food manufacturing through its own factories, as well as through external suppliers; the distribution of Grace and Grace-owned brands in Jamaica and internationally; and the operation of retail outlets through its Hi-Lo supermarket chain in Jamaica.

The group also manufactures and distributes third-party brands in Jamaica and internationally. The food trading segment operates in Jamaica an other areas of the Caribbean, Central America, North America, Africa, the United Kingdom, and several other European countries.

For the financial year 2018, GraceKennedy’s revenue grew by 5.5 per cent to total $97.54 billion, bringing the company closer to its target of $100 billion.

The growth was driven by increases in revenue from the food, trading and insurance segments, while the banking and investments and money services segments reported declines in revenue.