Today we publish the 15th and final story on the nominees for the Jamaica Observer Business Leader Corporate Award. To be considered for nomination, all companies had to be at least 50 years old, or be able to trace their roots to 1962 or before. The award presentation and announcement of the Business Leader Corporate will take place on Sunday, December 2 at the Jamaica Pegasus Hotel in Kingston.

ON paper, GraceKennedy Ltd is a very impressive operation.

With 60 subsidiaries and associates cutting across almost every sphere of economic endeavour, it is Jamaica’s ultimate conglomerate.

Grace earned $58.2 billion in gross revenue last year. Not only was its sales the highest among all the companies listed on the Jamaica Stock Exchange, it bettered the second place income generator — National Commercial Bank — by $13.5 billion.

To contextualise Grace’s earnings — the next highest three institutions on the list at the exchange are financial sector companies — NCB, BNS, and Sagicor.

GraceKennedy is organised along two very broad operational areas.

First, there is what it generally calls its foods division with GK Foods Ltd serving as the vehicle for this all-encompassing tent.

All the firms that are involved in manufacturing and distributing the products that are owned by Grace, as well as the brands for which is has distributorship, are part of this division.

Numerous supporting companies, both locally and those registered and operated abroad, are integral to Grace’s ability to deliver its products here and overseas; Hi-Lo Supermarket is a good example; these fall under this division.

In recent years, GraceKennedy Financial Group, the other broad division into which the conglomerate is divided, has been the primary profit driver for the group, though GK Foods still accounts for the lion’s share of revenue.

Among the well-known names that fall under this division: Jamaica International Insurance Company, Allied Insurance Brokers Limited, First Global Bank, and GraceKennedy Remittance Services Ltd.

Hardware and Lumber Limited is a retailer of general household goods and building material. Grace has a 58.1 per cent stake in this publicly listed enterprise.

The conglomerate has a workforce of 2,633, making it one of the highest employers of labour within Jamaica. 1,859 of the employees are permanent members of staff while 774 are temporary. There are more individuals working for Grace outside of Jamaica than are employed by some of the largest firms operating in the island — some 343. The large workforce abroad underscores just how serious Grace is about export.

The group generated J$16 billion from exports to Europe, the USA and Africa last year. This was in addition to the hard currency that it earned by sending its goods to the Caribbean region and from its subsidiaries that operate in these countries.

To put the size of this revenue in context: Jamaica last year earned US$117 million (about J$10 billion) from sugar export, its second most import commodity export.

By the time Grace’s products — whether it is sausage, tinned vegetables, or hot pepper sauce — reach the table of a Jamaican consumer, many individuals who are not even counted among those directly employed by this company would have already enjoyed some benefits.

A good example is how the 8,800 square-foot post-harvest and packaging facility that Grace opened in July last year has been impacting members of the farming community in Hounslow, St Elizabeth where it is located.

The plant is a multilateral partnership with Grace spending $43 million to refurbish and equip it. Farmers now have a facility that is processing and marketing their produce — cabbage, sweet peppers, callaloo, onions, lettuce and carrots. Seventeen of them were initially contracted by Grace to supply the processor with vegetables, but they in turn have collectively employed 190 other individuals.

Another example of the positive spin-offs that flow from Grace’s investment in agro-processing is how another processing operation in that same parish is providing farmers with the certainty of market that they need to do what they do best: plant pepper, escallion and other produce that is then processed into pepper mash for export — to the UK, USA, St Lucia and Belize.

This type of activity is replicated many times across Grace’s network of companies — mostly those under the GK Foods umbrella.

Here are the big numbers that summarise the scale of this operation: Grace Foods now exports to 33 countries. Last year, it spent $917 million on produce made by Jamaican farmers. It also earned $508 million from the portion of these produce that it exported. Additionally GK Foods exported 17 different types of products supplied to it by third-party Jamaican factories.

The profit-shifting that is now evident from a review of Grace’s financial statement dates back to 1995 when, under the leadership of the newly appointed CEO, Douglas Orane, the company unveiled what it called its 2020 Vision — essentially a plan to transform the once heavily trading-dependent organisation into a provider of higher margin services and goods.

Five years before this long-term corporate plan was put in place, Grace had got into partnership with Western Union to open up the money transfer industry in Jamaica.

GraceKennedy Remittance Services Ltd provided the group with a reminder of the stratospheric yields that were possible within the financial services industry. Grace was already in financial services, so it dug deeper.

In 2003, it merged several financial institutions that were operating separately to create First Global Financial Services Ltd. These included: George and Branday Merchant Bank, FGB Securities, Grace Pension Management, GK Properties, First Global Stockbrokers, and First Global Insurance Ltd.

Last year, GK Financial Group contributed 69 per cent to the pre-tax profit of the conglomerate, up from 61 per cent the previous year. The food division continues to be the bigger contributor to gross income.

The remittance company plays a unique role at Grace. Not only is it a significant contributor to the profit earned by the financial division, this firm has served as a conduit through which hard currency has been flowing at record levels to Jamaica over the past 20 years.

GraceKennedy Remittances was started in 1990 — its founding fortuitously coinciding with the steps that the Government of the day was taking towards liberalising the Jamaican economy.

Both moves dovetailed into one another and Jamaica was the beneficiary.

Remittance has since been and remains by far the highest net earner of foreign exchange for Jamaica. The remittance companies, of which Grace is the leader, account for the bulk of transfer to private citizens here.

An interesting aspect of Grace’s history, especially during post-Independence Jamaica, is that by 1962 it was already, arguably the country’s most dynamic corporation.

It was founded in 1922 by Dr John J Grace and Fred Kennedy. Its predecessor, Grace Ltd, was a subsidiary of the New York-based W R Grace and Company, a trader in products like fertiliser and salt fish. The Jamaican operation was acquired when the parent company was negatively impacted by the Great Depression and was forced to divest the asset.

Dr J Grace had worked for Grace Ltd; he along with Fred Kennedy co-founded Grace, Kennedy and Company Limited as it was called then. (In 2005, the firm was rebranded to GraceKennedy Ltd).

Grace developed quickly during the early years but in 1945 it made a big move by forming Kingston Wharves. The wharfing firm was an important revenue earner for Grace, and the company around which it built its involvement in almost every aspect of shipping. In 2003, Grace sold its shares in the company and exited the porting business.

From as early as the 1950s, Grace began to look around for opportunities to get into agro-processing. In 1959, it introduced Grace Vienna Sausage to the Jamaican market, produced from its own factory. Tomato ketchup, tinned fruit juices, and vegetables were some of the other products that rolled off the production line.

That period saw the establishment of a subsidiary in Canada.

One company after another was formed during the 1960s. They were created for the times, and represented Grace’s response to the signals within the 1960s Jamaican marketplace. Some are not around today. Others have been merged with other entities.

* In 1962, Grace established a presence in London with GraceKennedy UK Ltd.

* Also in 1962, GraceKennedy Shipping, Port Services Ltd, GraceKennedy Travel were formed.

* In 1967, Harbour Cold Storage was formed with Grace as majority shareholder.

* In 1969, Allied Insurance Brokers, as well as Grace Kitchen and Consumer Centre.

* In 1972, National Processors Ltd was created to produce cosmetics under licence. Also that year Grace acquired Western Meat Packers that was changed to GEP Meats Ltd.

* In 1973, it bought Jamaica Canners Ltd to package Grace Vienna Sausage; and also that year shares in Kingston Terminal Ltd.

* In 1975, Grace acquired Rapid Vulcanising Ltd and merged it with Sheffield Ltd to create the hardware retailer Rapid and Sheffield Co Ltd.

* In 2004, Hardware and Lumber was merged with Rapid and Sheffield. That led to Rapid True Value (H&L).

Moses Jackson is the founder and convenor of the Jamaica Observer annual Business Leader Award programme. He may be reached at moseshbsjackson@yahoo.com