Jun 2011 Financial News

Grace to position four products in mainstream Int'l markets

Jun 03, 2011

GRACEKENNEDY Limited will bolster its international business with the launch or reintroduction of four new products in the Canada, US and UK markets this year. According to CEO, Don Wehby, GK Foods will position Grace coconut water, Tropical Rhythms, a selection of new sauces and its milk based product Nurishment across the international markets specifically in the mainstream isles of the stores.

Grace products are primarily sold in the ethnic sections of the food stores in these locations, but Wehby said the company is hoping to garner a wider market share and capitalise on the association with 'brand Jamaica' in positioning the products in the mainstream. The company is also rebranding its 'Grace Soda' to 'Island Soda' in Canada to capitalise on this association and packaging its juice product 'Tropical Rhythms' in a can for export.

Wehby said the Grace brands are supported by a very good distribution system on the US East Coast and plans are in place to penetrate the West Coast market beginning with Los Angeles and California.

"We are very, very focused on expanding our international food division. That represents the greatest potential of increasing the growth of the GraceKennedy Group," Wehby told Caribbean Business Report (CBR) on Tuesday.

Wehby said the move to capture more market share internationally, is not a signal that Grace has given up on a maturing Jamaican market, but an attempt to capitalise on the better growth prospects overseas.

"I wouldn't say the Jamaican market is mature," Wehby said in response to CBR, "The Jamaican economy over the last 20 plus years has not shown any significant growth. If our objective is to give our shareholders a ROE (Return on Equity) of 20 per cent then that growth will have to come from overseas," Wehby said.

He disclosed the targeted 20 per cent ROE at the Group's annual general meeting on Thursday last week. ROE for 2010 stood at 8.9 per cent. Wehby said the 125 per cent anticipated growth in ROE would take place over the long term and would require strategic initiatives, such as the expansion of its global market share.

"We have put in place what we consider to be the necessary strategies to turn around the performance," Wehby noted. "When we look at the markets we are in we can say that our brand is the only Caribbean brand in all of those markets, which — outside of our region — span North America, Europe, and several Asian and African countries," Wehby added.

"We are working on improving our margin management, our working capital management and the generation of cash," he disclosed. "We know that, given the huge emphasis that we have placed on the centricity of consumers, we have to improve on our service levels. We are determined that we have to grow our revenues by introducing new products and services, which we will be offering through our food and financial services divisions. I think the public will find these new offerings quite innovative and exciting. We are totally focused on improving our return on equity and we will continue to do so by turning around our underperforming companies, and by maximising the value of our human capital through continuous training and development."

Other strategies included reconfiguring the corporate structure to increase efficiency and enhance risk management skills and improving productivity levels in order to become and remain world competitive as a global consumer group by 2020.

In pursuit of this objective, the company has invested US$30 million ($2.5 billion) in its distribution centre located at Bernard Lodge Estate in St Catherine.


Source:
BY ALICIA ROACHE roachea@jamaicaobserver.com
Jamaica Observer
Friday June 3, 2011

http://www.jamaicaobserver.com/business/Grace-to-position-four-products-in-mainstream-intl-markets_8947690#ixzz1OW7nJJGK