(Jamaica Observer) GraceKennedy is expected to send its first shipment to Nigeria by year-end.
The food, financial and money services conglomerate has already established itself in Ghana, and is now in the final stage of lengthy product registration and due-diligence processes in the neighbouring West African country, said Don Wehby, GraceKennedy Group’s chief executive officer.
Though not ruling out French West African countries (the company will continue to research those markets) GraceKennedy will concentrate on the English speaking West African markets, according to Wehby, who said that year- to-date revenue in Ghana has doubled that of the comparative period in 2012.
Consumers in Ghana have a similar taste profile to those in Jamaica. A lot of the focus on that geographic region is also due to the size of the countries and the fast pace of economic growth there.
Over in the US, where GraceKennedy has been promoting its products more to markets outside of those highly populated by its diaspora — such as the Hispanic community, which has welcomed the Grace brand — Wehby is encouraged by the initial results.
“Our coconut water and hot sauces have been especially well received,” he said.
A wholly owned distribution company in Belize provides a foothold in Central America where GraceKennedy plans to explore opportunities.
Coconut water shipments to Mexico, Guatemala and Honduras have commenced, while milk powder is already being exported to the two Central American countries.
“We believe there is strong growth potential in these markets,” Wehby told the Jamaica Observer.
Growth in the international business and the performance of the factories contributed to the increased profitability of the food division.
“Profits for 2013 in our overseas markets are up significantly over 2012, the CEO said.
Sales in the food division for the three months ended June 30, 2013 was 12 per cent higher than the same period last year — up from J$9.7 billion to J$10.9 billion — while pre-tax profit jumped 188 per cent, from J$95.2 million during the three months ended June 30, 2012, to J$274.7 million in the review period.
All of GraceKennedy’s other business segments, excepting insurance, saw profit growth during the quarter.
Retail and trading for the three months to June 30 was up by 589 per cent, from J$13.3 million during the comparative quarter last year to $91 million.
Money services, under which the conglomerate operates Western Union and FX Trader, saw pre-tax profit grow by 13 per cent from J$393 million to J$448 million for the three months ended June 2013.
First Global Bank, the banking and investment arm of GraceKennedy, benefited from growth in its loan portfolio as well as in fee income, according to Wehby. The division returned J$303 million in profit before tax during the review period, compared to J$116 million during the corresponding period in 2012.
An increase in claims reserves hit the insurance business, resulting in an 85 per cent dip in profit during the quarter under review, down from J$118.9 million in the comparative quarter to J$17 million.
“Jamaica International Insurance Company (JIIC) has been impacted by increased claims reserves arising from a review of those reserves currently underway,” Wehby said. “We expect the exercise to result in improved reserving practices, which will strengthen the company in the long run.”
The company has been very focused on being more consumer-centric, becoming more operationally efficient, managing our working capital well and being more innovative to ensure we have sustainable growth, he added.