douglas orane latintrade miami speech

7/31/2019 Douglas Orane Latintrade Miami Speech

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AMENDED FINAL at 7.50am June 12, 2012

KEYNOTE ADDRESS TO THE LATINTRADE GROUPS TRADE

AMERICAS EXPO AT 1.15 PM, JUNE 13, 2012 AT

THE INTERCONTINENTAL HOTEL, MIAMI, FL, USA,

BY THE HON. DOUGLAS ORANE

The ability to grasp, discover and apply new ways of production and

marketing to take your company global.

First of all, let me thank the Latin Trade Group for inviting me to address you. I am

particularly honoured, as I note from your programme that I am the only speaker from

the English -speaking Caribbean. That is significant for me in many respects, but

particularly so because I am Chairman of a company that started as a small trading

company in downtown Kingston, Jamaica, which now has big some may say highly

ambitious - visions of being a global group of companies.

In reflecting on our track record over the 90 years of our existence as a company, I

have every reason to believe that we will achieve that objective.

Today, I will share with you the GraceKennedy experience of expanding beyond our

shores and taking our products and services to the world.

In setting our objectives for growth I never doubted that we could achieve them

because, personally, I am an eternal optimist. I am the kind of person - let me tell you

up front - whenever I see a glass which has water to the 50% level I think of it as half

full . I concern myself with how we fill the other half and to not view the glass as half


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empty. So its in that spirit that I approach our dialogue today on the topic The ability

to grasp, discover and apply new ways of production and marketing to take your

company global. The point to be made is that there are tremendous opportunities for

you to do business with Latin America and the Caribbean.

For that reason countries of the region have become increasingly desirable trading

partners for countries and companies around the world, as well as a destination for

rising foreign direct investment and joint venture partnerships. With a 4.8 trillion dollar

economy, over 600 million citizens and a fast-growing middle class, Central and South

America and the Caribbean represent significant market opportunities for those who are

looking to expand their businesses into growth areas.

As a region, we wish to enter business relationships in a spirit of partnership, knowing,

from our own experience as a conglomerate, that we can and have entered other

countries with respect. I want to share with you the story of GraceKennedy, in order

to make the point that there are opportunities for doing business anywhere in the

world, if you have a vision and are willing to pursue it.

GraceKennedys aim is to become a Global Consumer Group by the year 2020, which

we have christened our 2020 Vision, delivering long term consumer and shareholder

value, through brand building and innovative solutions in food and financial services,

provided by highly skilled and motivated people. Our mission is to take the taste of

Jamaican and other Caribbean foods to the world, and world class financial services to

the region.

Our 2020 Vision includes the objectives of making at least 50% of our profits from

economies outside Jamaica, and deriving at least 15% of our revenues from each of the

three continents of North America, Europe and Africa.


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GraceKennedy was started in Kingston as a small trading company by three young

businessmen, Dr John Grace, Fred Kennedy and James Moss-Solomon in 1922, and has

grown to become a publicly traded entity with over 7,000 shareholders. Today, we are

listed on the Jamaican and Trinidadian Stock Exchanges, and selling our products and

services in over 60 countries around the world. In 2011, our revenues were US$678

million, up 6% over 2010, and our net profits were US$32 million up 24% over the prior

year. For the year 2011, 33% of revenues and 25% of profits came from economies

outside of Jamaica.

We permanently employ about two thousand people worldwide, and we have offices in

the U.S., Canada, the U.K., Belize, Guyana and Trinidad.

This kind of growth is the result of a deliberate strategy of employing the best talent

that we can find, creating a motivating work environment, and exposing our employees

to continuous training of a very high standard. Most of all, we have stuck with the core

values established by our founding fathers that have guided our company for 90 years,

namely, honesty, integrity and trust. Very significantly, the company started selling

shares to its own employees from as early as 1925, something that was virtually

unheard of at that time.

.

As a young engineer in my thirties, joining GraceKennedy in the early 1980s, I surveyedthe history of the company and realized that there was a solid foundation that had

been established by the founders and succeeding generations, and so I had no doubt

that we could transform this company into an entity that could eventually expand far

beyond the shores of Jamaica.


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In the mid 1990s, we made a paradigm shift in our approach to facing the world, in

creating our 2020 Vision. The volatile state of the Jamaican economy at that time

dictated that, as a company, we needed to grow faster than the Jamaican economy

itself, in order to meet the aspirations of our employees and shareholders.

How did we decide what areas to expand in? Our decision was informed by the very

simple view that Jamaica was no longer a country of 2.5 million people living in a small

Caribbean island. There were actually 4.5 million Jamaicans, 2 million of whom lived in

the Diaspora - primarily in the US, Canada and the UK and the rest in Jamaica itself. So

what that really meant was that Jamaica really was no longer a geographic location. It

is indeed a state of mind! We accepted that idea, and made it central to executing on

our strategy which, in 1995, was originally defined assatisfying the unmet needs of

Caribbean people wherever we live in the world.

So what does that mean? It means bringing unique Jamaican and Caribbean foods to

the Diaspora wherever our people are in the world. What we have found is that this

decision has created a stepping stone, not only to the Diaspora, but to their next door

neighbours with whom they socialize. It has also resonated with visitors who come to

Jamaica, are exposed to our food and drinks, and then go back to their home countries

with a taste for Caribbean cuisine.

It also means developing a range of financial services so that those in the Diaspora can

keep the bonds of family together, despite the fact that they live in multiple countries.

And that has been the reason for our remarkable success in our joint venture with

Western Union in 8 countries in the Caribbean. This holds true for other services such

as insurance, banking and asset management , where people - both inside and outside

Jamaica feel completely confident that here is a trustworthy company with a strong

balance sheet and most importantly, with a set of values that makes them completely


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at ease allowing us to manage their finances for them. Thats how we chose our two

current core industries of branded foods and financial services.

Lets consider what has made the kind of performance we have achieved happen.

When I joined GraceKennedy as a young man, the company had become a

conglomerate with a wide range of unrelated investments in Jamaica. This

development came about for a particular reason.

We lived in a protected economy with stringent exchange controls. There was no

choice but to invest more and more in unrelated businesses locally, because if we were

successful in a particular business, we could not replicate it outside of Jamaica,

because there were controls on capital movement.

All that changed in 1991 when currency exchange controls were abolished, and that

allowed us to move outside of Jamaica in terms of our investments. But of course, at

the same time, it created a huge increase in competition for us in our domestic market

and that, in fact, led a group of us in the company to saywe cant continue this way;

we need to function differently.

What is it that has made us successful in our transformation? I believe the first critical

factor was to identify our unique distinctive competences in our company, and to turn

them to competitive advantage in the market place.

Essentially, what we did was to ask ourselves, whats unique about GraceKennedy?

What we realized was that we were indeed unique for a number of reasons. First of

all, there was the fact that we had such an intimate understanding of Jamaican and

Caribbean lifestyles and we had taken advantage of this knowledge exceedingly well

over the previous decades.


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For example, we had become market leaders in different industries in Jamaica, from

processed foods to insurance brokerage.

Secondly, we had developed an understanding of the sources of innovation and the

ability to develop entrepreneurial management within a corporate structure, which I

would call intrapreneurship. In other words, we found ways to satisfy not only the

needs of our customers but also those of our own employees, so that they were able to

self actualize and live out their dreams within the company, rather than having to leave

and to launch off on their careers as entrepreneurs outside of the companyand thats

why I have never left Grace Kennedy.

I graduated from Harvard Business School in 1981 and, have been with GraceKennedy

ever since. And the reason? It is simply that GraceKennedy, because of its meritocratic

philosophy, has endeavoured to allow me and everyone else who joined the company

to develop to the maximum of our abilities. This is a crucial competitive advantage,

because what it means is that any young person in GraceKennedy today can become

the next CEO, or any other position they may aspire to reaching, if they have the

desire, the drive and the competence to do so.

The third factor is to determine what industries to focus on, and have the courage to

reorder the company accordingly. This is by far the toughest one! This is where all the

emotions come to the surface. What we have done since the 1990s is to say, lets

focus on the businesses in which we have the greatest core competencies, which

means investing in fewer businesses but to a much greater extent. For example, up to

the early 2000s we had five divisions. Today we have only two building branded foods

and financial services as highlighted in our current mission statement.

The Grace Foods Division produces various food items through our manufacturing arms,

the distribution of Grace-owned brands internationally and domestically, and the

operation of retail outlets through a supermarket chain in Jamaica. The group also


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manufactures and distributes third party brands. Grace Foods operates in Jamaica, the

Caribbean, Central America, North America, Europe and Africa, while sourcing products

from these locations, as well as from South America and Asia.

We own four modern factories in Jamaica and one in Wales, the latter which we

inherited from the acquisition in 2007 of a U.K. based ethnic food company, now known

as Grace Foods UK.

The GraceKennedy Financial Group comprises general insurance underwriting,

insurance brokerage, commercial banking, securities, remittances, cambio and payment

services businesses. This group operates primarily in the English speaking Caribbean

and we have built a strong alliance with Western Union in eight Caribbean countries, to

serve the remittance needs of our Diaspora worldwide.

The latter is only one example of several joint ventures with international partners

which we have encouraged and have in place. As early as 1968, we formed an alliance

with the New Zealand Dairy Board to establish Dairy Industries, which manufactures

cheese and other dairy products. We have also formed an alliance with WILD of

Germany to produce the Capri- Sun line of juices, for distribution throughout the

Caribbean and a number of Central and South American countries.

Time will not allow me to go into the details of all the issues one needs to address, interms of executing on innovative ways of production and marketing, but I have touched

on the key points. Certainly, having retired last year, I have complete confidence that

the company will continue to grow, because of the tremendous investments we have


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made in the development of our people internally at all levels and the implementation

of robust succession planning.

So, what could any one of you in this audience learn from this - I will summarize in

terms of our topic:

1. Identify your unique distinctive competences. If they are not unique why would

anybody buy your products and services rather than from your competitor? Then

determine how you turn these to competitive advantage in the market place.

2. Be very clear that the one remaining distinctive competitive aspect that has not

been commoditized is the development of ones people internally. This may sound like a

stock statement everybody now repeats, but it is fundamentally true, and I can vouch

for that throughout my business career.

3. The third factor is to make the tough decisions to align your existing business with

your chosen areas for expansion, based on your sources of potential competitive

advantage. This may mean internal restructuring, divesting of non-core businesses, or

acquisitions that create synergies.

I would now like to move on assuming you have all learned how to become global in

15 minutes. The question is what do we do with this knowledge? I suggest that we

look at actual examples for investment, and I have chosen Jamaica, as that is what I

know best.

There are a number of factors which make Jamaica an attractive candidate for

investment. The islands advantages include its proximity to the United States and the

Panama Canal; its historic and emerging relationship with the Latin American bloc an


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abundance of natural resources; a well-developed infrastructure including two

international airports, four aerodromes and nine active seaports; a large English

speaking population; competitive wages and accessibility to a diverse and educated

labour pool.

In addition, Jamaica has the unique advantage of being a gateway to not only

CARICOM, with a population of over 16 million, but to the Americas as well, a position

which is even further enhanced by the numerous trade agreements to which the

country is a signatory.

Jamaica remains an attractive destination for business process outsourcing or BPO -

and has emerged as the leading contact centre location in the English-speaking

Caribbean, with over 10,000 full time agents in the offshore BPO sector. Jamaicas

telecommunications infrastructure is one of the most developed in the Caribbean

region, and the country benefits from a fibre optic submarine cable network that

provides enhanced delivery of high speed data traffic. With an established track record

in finance and accounting, human resource outsourcing, receivables management,

technical helpdesk support, outbound sales and lead generation, Jamaica has been

recognized by industry opinion leader, Gartner, as a destination to watch and by A.T.

Kearney as a favourable BPO destination. The fact that Jamaica is thought of as such a

favourable destination is evidenced by 4 of the top 10 international outsourcing

companies establishing operations on the island.

Let me now touch on Export-Oriented Manufacturing & Logistics/Distribution.


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Located as it is at the center of the shipping routes between North and South America,

Europe and the Far East, and having advanced port facilities, Jamaica enjoys a

strategic exporting and transhipment platform, and is ideally positioned to take

advantage of opportunities in this sector. Additionally, Jamaica boasts a diverse

manufacturing sector which includes: beverages, processed foods, chemicals, plastics,

cosmetics, pharmaceuticals, and apparels. Jamaica has, in fact, been the destination of

choice for substantial manufacturing investment.

I want to also bring to your attention the opportunities offered by tourism. The sector

provides opportunities in specialized areas such as ecotourism, health, heritage,

entertainment and culture tourism, and Jamaica certainly is one of the most diverse

destinations in the region.

While there is much more that I would like to share with you, in terms of investment

opportunities, time does not permit me. So in closing, ladies and gentlemen, I hope that

I have achieved the twin objectives of opening your eyes to the rich potential for

expanding your businesses in Latin America and the Caribbean, and how we in

GraceKennedy, as a case study, are expanding globally. I thank you for having me

here and I am now open for questions.

douglas orane latintrade miami speech

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