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GraceKennedy restructuring begins with job cuts, redeployments

Published:Wednesday | July 18, 2018 | 12:00 AM
In this May 31, 2018 photo, Group CEO Don Wehby address GraceKennedy's annual general meeting, where he first announced a review of the company's operations.

Food and financial services conglomerate GraceKennedy Limited has cut 70 employees from its payroll under a phased restructuring of the group that was first disclosed in May.

Saying that it was repositioning for future growth, the company said "some positions have been rationalised, a number of roles expanded and a few new positions created".

In addition to the job cuts, an unspecified number of persons were redeployed across the group.

At the company's annual general meeting on May 31, Group CEO Don Wehby told shareholders that he had called in consultants - the London Consulting Group, based in Mexico - to advise on the restructuring of the operation, with the aim of improving performance in the run-up to GraceKennedy's 100th anniversary in 2022.

More immediately, Wehby hopes to hit a milestone of $100 billion in revenue this financial year - which would be a first for a listed company whose ordinary shares trade on the stock market. To get there, GraceKennedy would need to grow revenue by at least eight per cent atop last year's record haul of $92.4 billion.

Annual rate slowing

The conglomerate has recorded even higher top line growth in the past, but the annual rate has been slowing - last year it was only 4.8 per cent. GK would have to double that performance to hit the $100-billion milestone.

GraceKennedy's staff costs last year, at $13.8 billion, consumed nearly 15 per cent of group revenue.

Group CEO Don Wehby was out of office on Wednesday, but promised to respond later to queries on the subsidiaries affected by the redundancies, which began this month, and the costs and savings involved.

GraceKennedy said in a market filing this week that the restructuring is being rolled out in phases which "began with a review phase in early 2018 and has now entered the implementation phase".

The review contracted to the consulting firm covered human resources, information technology, finance, audit, corporate secretariat and legal, risk and compliance, corporate communication, and other corporate services, the company said.

"The restructuring exercise is an effort to not just improve key performance metrics, such as profit before tax and revenue growth rate, but also to streamline processes that will allow for a better work experience for employees and fulfil obligation to remain profitable and sustainable for all stakeholders," Wehby said.

In May, he told share-holders that GraceKennedy was not generating enough cash and profit for a company of its size.

avia.collinder@gleanerjm.com