GraceKennedy to Focus on Innovation and Efficiency in 2006

KINGSTON, Jamaica – In a challenging economic environment, with 2006 forecasted to be a flat year, GraceKennedy Chairman & CEO, Douglas Orane, outlined the Company’s strategies and programmes to maintain financial viability and achieve growth at an investor briefing held last month April, 2006 at the Company’s Harbour Street headquarters.

Mr. Orane said that “2006 profits are forecasted to be -5% to +5% of 2005. This forecast will be reviewed after the 3rd quarter results”.

Briefly sketching in the background to the current conditions in the economy, Mr. Orane pointed to a number of factors including rising oil prices and its effect on consumer disposable income.

GraceKennedy’s response to these challenges is to focus on increasing efficiency and emphasizing innovation. Important actions for success include maximizing human resource capacity, pursuing business opportunities in the Caribbean market and through Caribbean channels worldwide, and facilitating growth through a strong, broad and effective corporate structure.

According to Mr. Orane, a critical success factor will be to improve the company’s internal processes to reflect the requirements of the 21st Century. Among the measures identified to effect this change are cost reduction, improved productivity, effectively managing working capital, and improved IT structure.

The Chief Financial Officer, Mr. Don Wehby, and the Chief Operating Officers of the Company’s four divisions – Mr. Joe Taffe of the Financial Services Division, Mr. Erwin Burton of the Food Trading Division, Mr. Brian Goldson of the Information Services Division and Mr. John Mahfood of the Retail & Trading Division – described the significant measures being introduced in their divisions to achieve the goals set.

A dramatic example was in the Food Trading Division where, through cost saving efforts such as the implementation of SAP software and streamlining of purchasing, the division is anticipating savings of several million dollars per year.

Other examples cited were the increased use of automation in the Financial Services division to lower the cost per transaction and increase efficiency; and plans by the Information Services division to leverage its electronic network to lower transaction costs as the company expands internationally. GraceKennedy Remittance Services now represents Western Union in Antigua as of April 24, 2006.

In the Retail & Trading division, which has been affected by reduced demand from consumers, the focus this year will be on providing building materials to some of the large local construction projects in a full service package that will see the H&L Group handling all the logistics of sourcing and delivery.

Consistent with GraceKennedy’s claims of being in a growth mode, Chief Financial Officer Don Wehby reported that in 2005, the company spent J$758 million, the largest capital investment in its history, and had budgeted to spend J$562 million in 2006.

Commenting on the ongoing programmes to achieve optimal growth, Mr. Orane said “This is not something that can be done overnight with the stroke of a pen, but we are vigorously working towards solutions and we believe that we are on the right track.”

In a challenging economic environment, with 2006 forecasted to be a flat year, GraceKennedy Chairman & CEO, Douglas Orane, outlined the Company’s strategies and programmes to maintain financial viability and achieve growth at an investor briefing held last month, (April 28) at the Company’s Harbour Street headquarters. Mr. Orane said that 2006 profits are forecasted to be
-5% to +5% of 2005. This forecast will be reviewed after the 3rd quarter results.

Briefly sketching in the background to the current conditions in the economy, Mr. Orane pointed to a number of factors including rising oil prices and its effect on consumer disposable income.

GraceKennedy’s response to these challenges is to focus on increasing efficiency and emphasizing innovation. Important actions for success include maximizing human resource capacity, pursuing business opportunities in the Caribbean market and through Caribbean channels worldwide, and facilitating growth through a strong, broad and effective corporate structure.

According to Mr. Orane, a critical success factor will be to improve the company’s internal processes to reflect the requirements of the 21st Century. Among the measures identified to effect this change are cost reduction, improved productivity, effectively managing working capital, and improved IT structure.

The Chief Financial Officer, Mr. Don Wehby, and the Chief Operating Officers of the Company’s four divisions – Mr. Joe Taffe of the Financial Services Division, Mr. Erwin Burton of the Food Trading Division, Mr. Brian Goldson of the Information Services Division and Mr. John Mahfood of the Retail & Trading Division – described the significant measures being introduced in their divisions to achieve the goals set.

A dramatic example was in the Food Trading Division where, through cost saving efforts such as the implementation of SAP software and streamlining of purchasing, the division is anticipating savings of several million dollars per year.

Other examples cited were the increased use of automation in the Financial Services division to lower the cost per transaction and increase efficiency; and plans by the Information Services division to leverage its electronic network to lower transaction costs as the company expands internationally. GraceKennedy Remittance Services now represents Western Union in Antigua as of April 24, 2006.

In the Retail & Trading division, which has been affected by reduced demand from consumers, the focus this year will be on providing building materials to some of the large local construction projects in a full service package that will see the H&L Group handling all the logistics of sourcing and delivery.

Consistent with GraceKennedy’s claims of being in a growth mode, Chief Financial Officer Don Wehby reported that in 2005, the company spent J$758 million, the largest capital investment in its history, and had budgeted to spend J$562 million in 2006.

Commenting on the ongoing programmes to achieve optimal growth, Mr. Orane said “This is not something that can be done overnight with the stroke of a pen, but we are vigorously working towards solutions and we believe that we are on the right track.”