Orane GRACE, Kennedy & Company boss Senator Douglas Orane on Wednesday forecast that his company would see a 20 per cent rise in pre-tax profits for the year to the end of December 2000.
Speaking at Grace's regular investor briefing to review the first six months of the Year, Mr. Orane said sales remained relatively flat at just about $7 billion but profits rose from $280 million to $337 million.
"Based on our assessment at this point in time, we are forecasting that the profit after tax attributable to stockholders for the calendar year 2000 will be approximately 20 per cent higher than the comparable period in 1999.
In 1999, Grace closed the year with sales of $14 billion and pre-tax profits of $832.5 million. A 20 per cent rise would see pre-tax profits rise to around $1 billion.
Mr. Orane said the food trading division showed mixed results in the first half of the year. "The merchandise division continues to show improved working capital management, resulting in lower interest costs".
"Unilever entered into a partnership with Grace, Kennedy in 1978 and the trading relationship has been a significant one. Unilever has expressed concern at the increasing divergence of goals manifested by the launch of many new products by both companies, some of them competing, and that their recent worldwide acquisition of Bestfoods will compound this conflict of interest. As a result, on June 13 Unilever gave Grace, Kennedy notice of termination of their distribution agreement.
Mr. Orane added: "It has been agreed that Grace, Kennedy will continue distributing Unilever products up to January 1, 2001. The termination will therefore not materially affect this year's operating results. The revenue contribution for the first half of the year was $228 million with commensurate profit contribution of approximately $30 million, or about 6% of the group's half-year pre-tax profits of $495 million.
The merchandise division will "have significant spare capacity to sell a broad range of other products. Plans are being developed to replace these revenues with a wide array of products suggested by our retail and wholesale customers. At the same time, significant cost reduction alternatives are being pursued. Our objective is to fill the loss of profit contribution through a combination of revenue replacement and cost reductions by the end of 2001."
Mr. Orane explained that even if the company did nothing to replace the lost business, the Unilever decision would slow the future rise in profits from 20 per cent a year to around 14 per cent."
"The Industrial, Retail & Trading Division achieved satisfactory results which exceeded that of the previous year. Rapid & Sheffield continues to perform well largely due to its broader retail network, despite the low level of new construction activities. We have also begun to see encouraging results throughout the Hi-Lo stores."
Mr. Orane also took the opportunity to caution business leaders against panicking over the high level of crime but said he too was tired of attending funerals of staff, customers and friends that have been needlessly killed.
In an impassioned plea for business leaders to focus on what they can do in their own businesses, a focused independent Senator said it was incumbent upon business people to ensure that staff were secure in their homes.
"Don't panic. Concentrate on what you do well, and, do it to the best that you can", Mr. Orane told executives.
"Our followers(staff) are far more exposed than we are. As leaders we have to do what is right. Let us find a way for them to live in security first... then our security will be assured."
But it was his concern about the current focus on crime that caught the imagination of business executives at the function.
Mr. Orane, president of the Private Sector Organisation of Jamaica at the time, said he could not help remembering his 1993 work with Justice Wolfe on the National Task Force on crime in Jamaica.
Disgraceful
The Wolfe Report led to the appointment of Colonel Trevor Macmillan to head the police force and recommended a range of proposals for improving local policing and made suggestions on dealing with the "shocking and disgraceful" penal system, he said.
"I have to ask myself, how is it that we are back where we started and probably worse off".
The chairman and chief executive of one of the country's largest conglomerates added: "I'm tired of going to the funerals of people who have been killed".
He said he had again had to console at the weekend a widow of one of his best trucking contractors after her husband had been killed.
Mr. Orane said he was far less concerned about the rising cost to businesses of fighting crime than the human suffering it caused. "The greatest loss is the loss of life... This can't continue. The greatest risk is that we become numbed to it. That's not the way I want to live or I want my children to live," he added.
The Grace boss referred to the brutal gun slaying of former Grace employee, Errol Cann, as how just one act of violence could impact on a whole community.
"Errol Cann was one of the most entrepreneurial people I knew," he said.
Mr. Cann was gunned down on June 11, 1993.
Mr. Orane added: "Basically he employed hundreds. The livelihoods of hundreds of people were threatened." He said Cann's business partners had continued his good work but the needless loss was clear.
In June of 1993, Mr. Cann, who operated Candon Enterprises in Spanish Town, was on his way to the bank with other employees to make a lodgement of $500,000. While on the way, a boy was seen struggling with a cart in the middle of the road. The driver stopped the car and a man appeared in the road and pointed a gun at the car.
Several men then came up and one, who was armed with a gun, pointed it at Mr. Cann, who was seated in the front passenger seat and said, ' a long time you fi dead'.
He then shot Mr. Cann and ran.
Dave Sewell and Deon McTaggart were convicted of capital murder and sentenced to hang. Kevin Geddes was convicted of non-capital murder and sentenced to life imprisonment for the killing of Mr. Cann.
For text of Mr. Orane's prepared speech see e.fg online.
