Below is the story on one of the nominees for this year’s Jamaica Observer Business Leader Award. All the nominees are drawn from the list of entrepreneurs who have listed their companies on the Junior Stock Exchange. The Business Leader Award presentation takes place on Sunday, December 7, 2014 at the Jamaica Pegasus Hotel.

FOR half-a-century the Hart name has been among western Jamaica’s most enduring entrepreneurial brands.

The family can trace many pioneering successes to pre-Independence Jamaica, but it wasn’t until the mid-1960s that its name finally burst onto the business landscape after the patriarch, Anthony (Tony) Hart, broke ground for a transformational development — the Montego Bay Freeport deep water harbour.

This project became a showpiece for indigenous boldness in post-Colonial Jamaica and, true to the vision of its founders, it helped pave the way for many of the investments that flowed into the western end of the island during the succeeding decades.

Mark was a mere toddler in 1967 when Tony was installed as the wharfing company’s first executive chairman. In the hands of the larger-than-life personality, the job became one of the most powerful positions in the corporate world that existed back then.

It didn’t take long before the scion began publicly displaying some of the genetic imprints that had brought success and fame to the father.

The very short version of his prodigious biography is that by the time Mark secured a seat on the Junior Stock Exchange for Cargo Handlers Ltd in December 2010, he had been on and off the coveted list of Jamaica’s top 10 largest employers of labour.

The stevedoring company had a successful IPO in which it raised the $53.5-million it sought from the public in exchange for 20 per cent of its shares and its profits have soared exponentially since.

Hart, who recently took over as chairman was, at the time of listing, managing director of the relatively modest firm in which he shared almost equal ownership with two other individuals including his father.

This listing was, however, a dry run.

Caribbean Producers Jamaica Ltd (CPJ), another enterprise controlled by the father/son team, is by all measures of size and complexity way out of scale to the stevedoring operation.

The Government’s tax incentive scheme that pulled Cargo Handlers Ltd to the stock market promised even greater savings to the owners of CPJ if they were persuaded to take the plunge. During its first five years as a publicly traded enterprise there would be no tax on its profits and, over the following five years, only 50 per cent of the gross profit would be subject to tax.

One might have expected that Hart, a creature of public enterprise — he serves on boards of several listed firms — would easily jump at the opportunity. But that was not the case.

“It was a lot to ask, to disclose all our information and to have an external board,” he says, revealing the skittishness towards public ownership that he shared with many other owners of privately held corporations. “It’s a complete shift from a closed private company to a public company, a new way of doing business, so it had to be thought through.”

Cargo Handlers Ltd became a convenient test case for whether Hart had sufficient appetite for the hyper scrutiny that CPJ would undergo, once listed, not the least of which was being exposed to the probing eyes of competitors.

“We listed Cargo Handlers as a test run to see if we would be comfortable to list CPJ,” he acknowledges.

In his private musings, Hart weighed the benefits, risks and possible consequences of inaction. He had the unsettling thought of a competitor seizing the opportunity to jump ahead of CPJ to the market to reap the generous rewards that came with listing.

“Suppose I had a big competitor who went to the Exchange to get the benefits?” he pondered to himself. “Then I would have to follow; it made sense to do it before somebody else did.”

Moreover, Cargo Handlers Ltd’s experience as a publicly traded operation did not bear out many of the businessman’s fears.

So in July 2011, the CPJ share offer opened — and with aplomb. Twenty per cent of the company’s stocks were on offer at a price of $426 million; much of it was already pledged, thus creating excess demand for the remainder. This led to a mini-drama the likes of which had never been seen at an IPO: No sooner than the offer opened, it closed, having been fully subscribed, leaving possibly hundreds of would-be investors in bewilderment.

Listing on the Junior Stock Exchange followed on July 11.

In a remarkable twist of storyline, the entrepreneur who three years ago made an unwilling journey to the market has now become a vocal champion of its merits.

“It is an amazing concept,” he declares. “The economy would be more dynamic if more companies came to the market and are professionally managed with transparency, while having the advantage of greater access to capital.”

Hart also feels vindicated by the decision to go public, given how the new status is reshaping the industrial relations climate at his organisation.

“It has created a whole new process at our company,” he remarks, then offers a real case example.

“We gave out bonus to staff (of CPJ) that year (2011) and almost everyone took it in shares. Our staff members are much more engaged in the company’s affairs. They are now participating in the company from the point of view of their knowledge and understanding of what is going on.”

CPJ is a complex, multifaceted operation that requires a 400-member workforce.

This year marks its 20th anniversary and happily it is a far cry from the early beginnings when it took its first tentative steps into the market with a hotchpotch of items — from toilet tissue to canned foods — before carving out a niche and name for itself in the hospitality industry for its wines and spirits.

The business has obviously evolved. For, while it has maintained the huge footprint within the hospitality sector for which it became known fairly early in its development, many of its products now claim a respectable share of the domestic market.

Beverage brands like Fruta and Lipton, grocery items from Blue Diamond and Farmers’ Choice, a range of meats, and seafood are among the items distributed by this company. Spirit brands include Grey Goose, Dewars, and Remy Martin, while the selection of wines include Yellow Tail and a long list from all over the world that is a virtual encyclopaedia of tongue twisters.

Not only is CPJ a distributor and retailer of a wide range of goods, it is a manufacturer that has already ventured into the export market and has even established a full-fledged distribution operation in St Lucia.

The firm remains headquartered in Montego Bay where its story began with five employees inside a 16,000-square-foot warehouse. The 120,000-square-feet of space it now occupies at the Freeport on the westerly tip of the city houses its offices, factory and warehouses including a 35,000-square-foot cold storage room, with a bonded area.

This real estate is the heartbeat of the dynamic organisation. It is where the meat processing plant, the beverage production lines, pasteurised liquid egg facility, and the branded retail outlet CPJ Market are located.

The pasteurised liquid eggs are supplied primarily to the hospitality industry in Jamaica, while the fruit juices and the Cariburst juice concentrates reach consumers as far as the eastern Caribbean.

Throughout the day, the place is abuzz as refrigerated trucks (the company has 25) and private contractors back up into the warehouse to load up with goods for delivery to the wholesale and retail trade.

In this type of business, critical mass is everything. Hart says that the workforce understands this basic economic principle and stands behind the company’s expansion mission.

“The company is blessed with a dedicated workforce,” he beams. “We have managers who have been with us from day one. We also try to create a positive work environment.”

Breakthrough in overseas markets, expansion in product lines, and new investments in manufacturing capacity are all important developments that have helped the company meet its revenue targets. Symbiotic business partnerships have been forged to drive sales and spread overheads.

A good example is the deal signed last year in which CPJ took over distribution of Jamaica Beverages Limited drinks throughout western Jamaica. That same year the company invested in a meat processing facility which now supplies sausages, burgers, bacon and hams to many of the island’s supermarkets and retail outlets. More recently, Hart fulfilled a long-standing ambition with the establishment of a distributorship in St Lucia — by way of a partnership with the Du Boulay’s Bottling Company.

Two years ago, the Montego Bay-based company introduced Kingston to its marquee retail shop, the CPJ Market store. Located on Lady Musgrave Road, it is a replica of the MoBay version that has been a hit in the north coast city, except that two innovations have been added to the Kingston outfit.

At CPJ Market, individuals can buy directly the wide range of drinks and foods that would normally reach them through the company’s distributive and retail network. But in Kingston, a CRU Bar sits on top of the retailer, providing an added drawing card to the location for those seeking to indulge their appetites for alcoholic beverages while mingling with friends. A deli serves a wide range of culinary delights including cold cooked meats, salads, juices, cut cheese, soups and sandwiches.

If there is public perception based on CPJ’s footprint throughout the Jamaican market that this is indeed a successful enterprise, one only has to take a glance at the profit and loss account and balance sheet for codified validation of this impression.

For the financial year that ended June 30, 2014 the company generated US$78.6 million in sales (J$8.5 billion using an average exchange rate of J$109 to US$1). That is more than 50 times the US$1.5 million it earned 20 years ago when it first opened its doors for business. Net profit was US$3.6 million or J$377 million.

Hart’s involvement in business predates CPJ. To begin with, he grew up in an environment that was nurturing to entrepreneurism, but counts his stint at Worthy Park Estate in St Catherine — after returning to Jamaica from high school in England — as his first real-world working experience.

“I wanted a real-life working experience before going to university,” he declares. “I learned lots of things working at Worthy Park.”

The latter claim may be true, but as to how “real-life” the experience could have been is anybody’s guess, given that the Worthy Park boss, Peter McConnell, is brother of Joanie Hart, Mark’s mother.

An aborted attempt at a university education in San Francisco was quickly followed by a string of successes as the young Hart immersed himself into business the moment he was back on Jamaican soil.

The first venture of note was the Pork Pit, a popular eatery with an informal atmosphere that he established on Kent Avenue and which became a hit in Montego Bay. Hart later sold the restaurant to make room for a much more ambitious foray in entrepreneurism.

The 1980s heralded one of Jamaica’s most sustained and hope-filled attempts at regaining a foothold in manufacturing, an industry that began an inexorable retreat from the country’s grasp at the end of the 1960s.

Tony Hart provided seed capital for his son’s entry into the so-called 807 garment manufacturing industry in 1986. Under the 807 programme, America extended quantitative quotas for garment imports to producers in Caricom countries.

“My father backed the investment,” he lets on.

With support from Jampro, the young Hart secured space in a building at the Montego Bay Freeport, and was in business.

“Fortunately, at the time senior executives of Hanes were in Jamaica to set up offshore operations,” he explains. “We met with them and they thought they could work with us.”

The company, Apparel Handlers Ltd, and its employees benefited from training and equipment from Hanes for the initial set-up, but as the operation expanded the Jamaicans had to upfront the capital to meet the business needs.

At the height of Jamaica’s involvement in the 807 industry, tens of thousands of otherwise idle hands found gainful employment, and Hart was among the largest job providers. In fact, at the peak, he alone employed 2,800 individuals across five factories and produced 1.5 million pieces of garments each week.

“It was a lot of pressure,” he recalls.

As is well-documented, the industry went into a tailspin in the 1990s. Early in that decade the USA signed the North America Free Trade Agreement (NAFTA) with Mexico, essentially removing the competitive advantage that Caricom enjoyed in garment export into the American market, dooming the industry across the region.

The Harts, too, eventually succumbed to the competitive forces, closing the last factory in 2004. While he struggled with the challenges at the apparel company, Hart became a silent partner in Caribbean Producers Jamaica Ltd (CPJ) with an American businessman, Thomas Tyler.

Tyler, who was based in Florida, was well known within hotel circles in Jamaica and throughout the region because of the service he provided to hoteliers.

Hart says it was he who suggested that Tyler get into the distributive trade in the island.

“He is a gifted salesman and had tremendous goodwill on the north coast,” he notes, referring to the co-founder who is now CEO of CPJ.

When Hart signed up as an investor he had just re-enrolled in a bachelor’s programme, this time at a university much closer home — in Florida — and understandably had no time for day-to-day involvement in the new business.

“I was a silent partner,” he says.

The challenges were many.

“The business grew tremendously, but not in an orderly manner,” he lets on. “It was different from manufacturing. Growth meant continuous infrastructure investment and increases in receivables. The business had a tremendous appetite for cash, and we had to move cash from the other profitable business to help support it. There were times when I wanted to pull the plug on the investment and cut my losses.”

He was back full-time in Jamaica in 1998, the moment he graduated from university. He bought out controlling interest in CPJ, and immediately set about structuring the operation so that it could grow in a controlled and sustainable manner.

“The business had grown significantly just out of Tyler’s effort,” he says, pointing to annual sales in the US$20 million ballpark by 2004 as proof. “But you always had to front-load it with more systems than were needed to meet current demand and then hope that it would translate into sales. You are always spending ahead of sales.”

When Hart took over as CEO in 2004, a top priority was to introduce technology to streamline back-office operations and create a governance structure that would allow the investors to take the business regional.

Interestingly, public listing was not on the agenda. But the very systems and structures that were intended to move the firm closer to international standards of operation came in handy when the decision was made to seek a seat on the Junior Stock Exchange.

“We started to structure the company with good governance — board meetings and committees — and tried to have the systems in place to be able to grow offshore,” he explains. “Then the opportunity for listing on the junior stock market came. By that time we were already well-structured and well-run. We were able to pull together the listing in 90 days; we did not have much work to do.”

Still, Hart remains convinced that CPJ’s staff is as critical to its future as the systems that are in place to maximise efficiency and ensure accountability. He says that his company goes the extra mile to engender esprit de corps among the staff and points to a range of benefits. These include a fully equipped gym, subsidised meals at the canteen, and the fact that a wide range of services are brought on the property for their convenience — from medical insurance to services offered by the Registrar General’s Department. All told, benefits for the 2013/14 financial year represented 3.2 per cent of adjusted gross profit.

“We built the business on service,” he says, “and this is something we remain resolute about.”

The message is clear: it takes a contented workforce to translate that lofty corporate ethos to customer experience within the marketplace.

Moses Jackson is the founder of the Business Leader Award programme and chairman of the Award Selection Committee. He may be reached at moseshbsjackson@yahoo.com

HART AND TEAM

CPJ Executive Chairman Mark Hart (standing) with members of his executive team (from left) Hugh Logan, vice-president, Sales and Hospitality Division; Sandrene Weichenberger, financial controller; Robert Williams, technical services manager; Jan Polack, chief financial officer; and Wayne Sylvester, territory sales manager for the western region. (PHOTO: PHILLIP LEMONTE)

HART AND JAN POLACK

Mark Hart and his chief financial officer Jan Polack discuss company business. (PHOTO: PHILLIP LEMONTE)

MARK HART

Caribbean Producers Jamaica Ltd Executive Chairman Mark Hart stands outside the entrance to the company in Montego Bay. (PHOTO: PHILLIP LEMONTE)

HART… the economy would be more dynamic if more companies came to the market and are professionally managed with transparency

HART… we were able to pull together the listing in 90 days

HART… we built the business on service, and this is something we remain resolute about