GraceKennedy (GK) is ramping up its mergers and acquisitions in furtherance of creating another record profitable year for the Jamaican conglomerate.

Already, GraceKennedy is finalising six mergers and acquisitions, which should be consummated by year end with others on the horizon, GraceKennedy CEO Don Wehby told shareholders at the company’s virtual annual general meeting (AGM) yesterday.

Responding to a question from a shareholder, Wehby identified one foreign company that the food manufacturing and distributing conglomerate is eyeing, as it seeks to grow its overseas market.

He said that GraceKennedy will be using that entity to promote its range of Grace products in that market.

Wehby also said that in addition to growing its brands, GraceKennedy has been investing in its products, which is reaping significant dividends.

He said he was excited by GraceKennedy’s acquisition of Scotia Insurance Eastern Caribbean Limited, which, he disclosed, is expected to be completed by July 31.

 Grace now seeking regulatory approval in Eastern Caribbean

He told shareholders that GraceKennedy is now in discussions with the regulatory authorities in the seven Eastern Caribbean territories in which the business is operating, seeking their approval of the new ownership.

Wehby also spoke about the acquisition of the876 Blue Mountain Spring Water brand this year, advising shareholders to watch out for exciting things that will be happening with this brand.

The GraceKennedy boss boasted about the group’s remittance business, which is growing faster than the market itself. He attributed the growth to the group’s focus on compliance and risk management, which is one of the 10 focus areas for 2021 and beyond.

He stated that the group’s continued focus to reduce threats to protect customers is paying off, particularly at this subsidiary. 

Focus areas for 2021 and beyond

The other nine areas of focus he identified are:

1. Digital Transformation: Execute digital initiatives and launching a digital factory;

2. Mergers and Acquisitions: Pursue transactions locally and internationally;

3. Invest in our Brands: Continue to introduce new products and services;

4. Working Capital Management: Manage operational liquidity and cash preservation;

5. Corporate Social Responsibility: Focus on the community;

6. Operational Efficiency: Process improvement, cost containment and improved use of technology;

7. Margin Management: Pursue effective pricing strategies to improve margins;

8. Strong Talent Management: Attract, retain and develop talent at all levels; and

9. Market Share: Grow market share in all business segments.

Wehby drew reference to GK foods (USA) LLC, which is a major pillar for the group’s global expansion strategy. 

Seeking to go one better than last year’s record performance

Boasting about the record performance in 2020 when GraceKennedy chalked up its highest revenue in its history of $115.44 billion, Wehby is expecting the group to go up one notch in 2021, emphasising that the record profit did not have any one-off gain. He reported that all business segments are reporting growth for the current March quarter.

The target for revenue earned outside of Jamaica is 60 per cent by 2025 and, as at 2020, this is currently at 46.6 per cent with Wehby expressing confidence that this target is on track and will be met. The target for group profit derived from outside of Jamaica is 50 per cent and is currently at 45 per cent as at 2020.

GraceKennedy plans to leverage its relationships with multinationals and form partnerships to enhance its offerings. Currently, there are five partners, among them Western Union, Frito-Lay and Nestle, which are currently working with the group to grow its offerings.

Recently, GraceKennedy entered into a joint partnership with Nestle to distribute some of its products.

Digital Transformation

In 2020, GK developed a digital strategy with a multi-year road map of digital products with one of them being the Digital Factory, which was launched in February this year. Wehby disclosed that three digital products will be launched in the third quarter of 2021.

Regarding consumer centricity and innovation-digital, GraceKennedy plans to engage its customers, providing innovative solutions inspired by business intelligence. Its digital integration includes three phases:

• phase 1: prepaid card

• phase 2: mobile wallet

• phase 3: mobile app

So far, GraceKennedy has carried out the following digital improvements:

1. Global Access 2.0

2. Instacart — GK’s products grew by 400 per cent in 2020

3. Digital registration — Western Union (send to bank)

4. Insurance — Increased online offerings

5. Hi-Lo e-commerce (coming soon)