GK goes after 70%
Food and financial services group GraceKennedy (GK) Limited has set a target to achieve 70 per cent of revenues beyond local borders by 2030.
In its much-touted vision 2030 agenda, the conglomerate outlined plans to add more than 20 per cent to the 45 per cent of revenues and 47 per cent of profits it currently earns from markets overseas. This follows the announcement of plans by the group to grow exports to 50 per cent within the next three years.
Group Chief Executive Officer Don Wehby, speaking at an investor briefing on Monday, said that while the company was currently experiencing significant growth across its local business — accounting for the bulk of its earnings at 55 per cent of revenues and 53 per cent of its profit before tax — it would be ramping up efforts to tap into the larger foreign markets. A strategy it believes will help to quickly deliver the 70 per cent target.
“We are going to be growing significantly in Jamaica but because the markets overseas are so huge, we intend to cross over mainstream as we go after [increased] growth in the global community.
“As we journey towards 2030, we want 70 per cent of our profits and revenues to be coming from outside of Jamaica. Our current revenues is US$813 million but by 2030, we are going to be a US$2.1-billion company. Our current profit [before tax] now at US$68 million is to become US$250 million by 2030,” Wehby said.
With GK products now in about 500 of Walmart’s over 5,000 stores, the CEO said that plans were now afoot to further expand the footprint as the company positions to get into other large retail chains across Canada, US and the UK. This, as it seeks to attract a wider customer pool outside of the Caribbean Diaspora by pushing some key products having mainstream appeal to cross over.
As Tropical Rhythms juices lead the pack, Wehby said that a target to double sales from this product over the next three years has been activated. He singled out some other products including the jerk and hot pepper sauces among the others ripe for the push, particularly in the Hispanic markets.
“We believe these products, in terms of the mainstream market, can be huge. I’ve asked my team to create a detailed strategy from production to marketing to distribution to see how we will double the sales of all of these items during the first phase,” Wehby stated.
Among the raft of plans to unlock greater shareholder value, the company wants to list its food businesses on an overseas stock exchange. With the groundwork now being laid and meetings scheduled with different investment bankers in the US, Wehby believes this target, once realised, will also help to “increase the market capitalisation of GK by at least four times by 2030”.
Concerning the plans for inorganic growth, it was said that the group’s pipeline for mergers and acquisitions remain very active.
“We have three sizeable deals that we are looking at now: one in financial services and outside of Jamaica and two within the [local] food division. I’m hoping these deals will be closed in first quarter [Q1] of 2023,” Wehby said.
With the GK Capital Management now bringing Regency Petroleum to market, Wehby said he has also challenged the team to bring at least two to three companies per annum to the Junior Market over the next few years, as the group targets more growth form this portfolio.
An expected launch of a mutual funds with the Trinidad and Tobago Unit Trust Corporation during Q1 of 2023 is also targeted to yield significant returns for the company as it steadily works towards achieving its lists of plans by 2030.
On the matter of fine-tuning efficiencies across the group, the CEO said that a reduction of its energy cost through a new solar project along with the year-end completion of an integration across its factories and the adaptation of its digital factory, channelled through its GK-ONE app, will further help to unlock a number of services across the group while making the lives of its customers much easier.
“We remain committed to achieving our strategic objectives and improving the lives of all we interact with, in the communities we serve. We look forward to delivering a strong performance powered by great staff, a sound strategy and world-class products and services at the highest standards,” Wehby told investors in his closing remarks.