A Jamaican Experience

GRACE, KENNEDY & COMPANY, LIMITED: Challenges, History, and Strategies


Paul Andrew Bourne




Introduction

Despite the much-touted ills of liberalization and the high interest rate regime of the governments of Jamaica since post-1980s, Grace, Kennedy and Company, Limited, has persevered tremendously notwithstanding all the adverse challenges. The organization has continued to introduce new manufacturing products and different innovative mechanisms to our landscape, yearly. Grace, Kennedy and company continues to be a dominant player in consumerism in the Caribbean. Even though many players in the Jamaican economy migrated in the heightened period of the 1970s due to the position of the governing PNP administration, Grace, Kennedy and company consolidated it entities and marched onwards with pride. They have fought many battles with the ruling party in the 1970s as their continuance as a private sector entity was tied to the primary motivation of profiteerism, which was an evil of the day.
Furthermore, the author knows of the dominance of Grace, Kennedy in the landscape of the private sector and more so in Jamaica since the 1920s coupled with its repositioning strategies of Mr. Carlton Alexander, Former Chief Executive Office, alongside with the spiraling acquisitions of the many companies by this entity makes for befitting research.
In addition, the author is cognizant that Grace, Kennedy and Company continues to earn a remarkably substantial amount of its foreign exchange requirements. The establishment has an entrenched brand loyalty that makes for interesting readings as to the entity's start-up, marketing strategies and consumerism in Jamaica.



HISTORY
On February 14, 1922, Messer Dr. John Grace and Fred Williams who were workers in the wholly owned Grace Jamaica Limited a subsidiary of W.R. GRACE AND COMPANY of
New York City, New York, established Grace, Kennedy and Company, Limited. Dr. John Grace is an American who came down from the United States as one of the owners of W.R. GRACE AND COMPANY.
Because of the post war economic recession of 1921, W.R Grace and Company of New York was experiencing reverse financial woes and so wanted to divest themselves of some of their subsidiaries. As such, Dr. Grace knowing of this impending new situation (i.e. the pending sale of Grace Limited Jamaica), he decided to keep the company. The new company, which was formed in February 1922 on the recommendation of Fred W. Kennedy, was able to acquire the services of accountant James Mass-Solomon who was formerly of the United Fruit Company.
Furthermore, on February 14, 1922, on the birthday of Fred William Kennedy's mother, a new firm, Grace Kennedy and company was launched on the success of its predecessor. The new company's Memorandum of Association gave it scope to carry on general mercantile and commercial business and other business, manufacturing or otherwise. The capital of this entity was 25,000 divided into 250 shares of 100 each, with power from time to time to increase the capital.
On February 15, 1922, the company's first Directors Meeting was held at 4 Duke Street, Kingston being the office of the appointed solicitor of the entity, Cargill, Cargill and Dunn. Those who were present at that meeting were Dr. John Grace, Governing Director; Fred

Williams Kennedy, appointed a Director. At the meeting, the Directors appointed Colonial Bank as the Company's Bankers; G. F Wallace, Secretary; James Moss-Solomon, Accountant; and H. M. Radcliffe, counsel. The company's cheques were to be honoured on signature of the Governing Director alone, or together with that of Fred W. Kennedy; and an agreement that Mr. Walter Fletcher as the manager of the Montego Bay branch. It should be noted, however, that the branch in St. Ann's Bay was closed, as Grace, Kennedy and Company had not purchased this outlet.
The head office of Grace, Kennedy and Company was accommodated at 64 Harbour Street that contained room to space, but the wharfage was inadequate. This they rented from the W.R. Grace Company. The company's (Grace, Kennedy and Company) first issue of share was done on March 1923 to raise 2,000 for 20 shares pro rata to existing shareholders for the cost of building and improving the premises at the head office (i.e. at 64 Harbour Street).
In 1935, Grace, Kennedy acquired Standard Soaps, a small manufacturing business but that was resold to Jamaica Coconut Producer, which became subsequently Seprod Limited.
According to Grace News, "Grace, Kennedy and Company, Limited, strategy was a partnership between shareholders, the employees and the community in which the company operates and earns its revenues and profits. We firmly and irrevocably believe in the profit motive and free enterprise and we hold a strong belief that the profit must be the main motivation in all business undertakings." The company's policy has always been on total employees' welfare. This the entity does also extend to past employees. That is, health benefits are not rescinded after retirement but continue until the death of the employee. The company also gives hotel vacation to employees who are on vacation.
In June 1981, Bruce Rickards, Sales Manager for Gracefoods, at an International Conference in Montreal, Canada said that "Our growth had been in an active market where dynamism, expertise, sources of supply, quality and price were the issue - who got to the market first with the best product and the best prices at the right time."
In April 1985, Finance Director, Rafael Diaz chairing a Board Meeting in the absence of Chief Executive Office, Carlton Alexander due to illness said, "the strength of Grace, Kennedy and Company Group as a whole lies in their sales, marketing, and customer service, and those that must always remain as ?'key factors in our business'.

STRATEGIES
Provision of basic foodstuff for the working class Export indigenous crops
Earn enough foreign exchange to pay for its
import bills Being the Market Leader,
A partnership between shareholders, the employers and the community
Fair and honest principles of business Efficient and responsive management
Fair and reasonable conditions for employees Good business practice
Improve the quality of life for Jamaicans Product differentiation and diversification
Forge alliance for control of supply Backward and Forward Integrations
Price leader A strong corporate image