WebhyMcPherse Thompson, Assistant Financial News Editor
WITH REVENUES from sales of food brands owned by Grace, Kennedy & Company exceeding US$100 million for the first time last year, the company said it will be focusing on an aggressive growth and development strategy worldwide during the course of this year.
Erwin Burton, chief operating officer of the division, said that in the domestic market, the focus would be on the introduction of new products such as Tropical Rhythm, Zesti, Old Orchard and Capri Sun in the ready-to-drink category, as well as ready-to-eat products such as Baked Beans and Viennas and Baked Beans and Codfish.
Domestically, the company will also be looking at penetration of the down market segment, in addition to seeking to achieve world-class manufacturing practices by moving labour productivity to 80 per cent from the current 60-65 per cent.
CHALLENGES
Addressing shareholders attending last Thursday's annual general meeting of Grace, Kennedy at the company's Harbour Street, downtown Kingston offices, Mr. Burton said that among the challenges facing the division going forward were the unstable currency, the weak economy which has reduced spending power, as well as increasing competition.
In the international markets, the Food Trading Division will be looking at rapid growth through emphasis on beverages and ready-to-eat products, with the expectation that Tropical Rhythm and Coconut Water will lead them into many markets.
They are also anticipating expanding the distribution network which now operates in 28 countries. He said the main challenges in those markets was the difficulty of identifying distributors for the company's beverages, as well as the high cost of marketing. The new two per cent Customs user fee on imported raw materials would also adversely affect competitiveness in local factories, he said.
Don Wehby, chief operating officer of the Financial Services Division, said 2002 was a "fantastic year" for the companies in that sector, with pre-tax profits growing by 76.8 per cent to $683.7 million. The division contributed 39.1 per cent of group pre-tax profit, compared with 29 per cent the previous year.
CONTRIBUTORS
Among the biggest contributors were First Global Bank, which saw pre-tax profits soar to $122 million, some $100 million more than the previous year's; and George & Branday, which almost doubled from $84.1 million to $160 million. Allied Insurance Brokers also had good results, moving to almost $109 million from $63.7 million of the previous year, as was Jamaica International Insurance, which recorded $166 million in pre-tax profits from $124.6 million the previous year.
According to Mr. Wehby, First Global Stockbrokers acquired 22 per cent of the market in its first full year of operation to reach the number two position in the market. The company has a customer base of 1,421 and undertook $4 billion in trade during last year.
He said the performance of Grace Pension Management continued to be good and currently manages 15 funds, with $8.5 billion under management.
Mr. Wehby said that both tele-banking and Internet banking services will be implemented this year under the first phase of an improvement programme, to allow customers to access information such as account balances and transaction history by computer or telephone. In the second phase, he said, the system will allow customers to transfer funds from one account to another.
THROUGHOUT THE CARIBBEAN
Noting that the insurance division would continue to acquire agencies and invest in underwriting companies throughout the Caribbean, Mr. Wehby said "our main prospect at this time is to establish First Global Insurance in the Turks & Caicos Islands." They were also in the process of acquiring General Finance Corporation, a Barbados merchant bank, in conjunction with Cave Shepherd & Company, one of the leading listed companies in that country.
In the Maritime Division, Robert Kinlocke, the chief operating officer, said that as part of the plans going forward, the company would be outsourcing its business support unit and expand its agencies overseas in an effort to grow its business with shipping lines across the Caribbean. It will also be expanding its trucking and stevedoring services, acquire additional mobile cranes to render services off the ports and expand the Harbour Cold Stores cold room even further to take advantage of the increased traffic volume.
Among other things, John Mahfood, chief operating officer of the Retail and Trading Division, said the motor vehicle arm, Fidelity Motors was now profitable and in fact has a market share of about 15 per cent. That is expected to grow to about 20 per cent during the course of this year.
WEHBY
