Africa, the new frontier for GK

BY CAMILO THAME Business Co-ordinator thamec@jamaicaobserver.com

Wednesday, February 08, 2012

IN its thrust to become a global consumer group, GraceKennedy (GK) plans to earn at least 15 per cent of its revenue from Africa in another decade.

Yesterday, GK Group CEO Don Wehby said the conglomerate is also targeting North America and Europe to earn a minimum 15 per cent of its revenue in each of those markets.

"The remaining revenue (at most 55 per cent of the total) would come from Jamaica and the rest of the Caribbean," said Wehby in a telephone interview.

Up to 2010 — the last published results showing geographical segments — 13.6 per cent of its revenue already came from the UK while 11.6 per cent came from North America, which comprises the US and Canada.

"UK had the best year ever and we had growth in North America last year," said Wehby.

GraceKennedy's strength in the UK comes from a US$50-million investment in a UK-based company WT Foods, which is now called GK UK.

Importantly, GK UK provides a platform from which GK can launch into Africa and other European markets.

The conglomerate took its first step into Africa, having started exporting Tropical Rhythms drinks to Ghana in the west, where the beverage is considered to be in high demand, according to Wehby.

"Ghana has 24 million people... even if we get a small share that would be significant," said Wehby.

What's more, the company has started to move products into other European countries outside of the UK, such as Germany.

Apart from having strong presence on three continents, the conglomerate also aims to get half of its profits from outside of Jamaica (up from 20 per cent now earned outside the country) and leverage its relationship with international partners, such as Western Union.

Plans are already underway to extend its money services outside of the eight English-speaking Caribbean countries in which it already operates — both regionally and internationally.

The primary area of focus for growth within the region will be financially services, which it already offers in Trinidad and Tobago and Barbados through shares it has in companies there.

The main driver for the continents, however, will be its food brands.