Wednesday 14 November, 2018

GraceKennedy bullish about producing corned beef locally

GraceKennedy CEO Don Wehby shared a photo of himself on Twitter sampling the 'Grace Bully Beef' last week.

GraceKennedy CEO Don Wehby shared a photo of himself on Twitter sampling the 'Grace Bully Beef' last week.

GraceKennedy CEO, Don Wehby, remains optimistic about the prospects of producing corned beef locally, having recently completed production on a small scale for sampling.

But there is still one challenge; Jamaica’s meat and poultry market does not have a fraction of the volume of beef trimmings that is needed to supply the local corned beef market, says Wehby.

To viably commercialise locally-produced corned beef, the Jamaican beef industry would have to become more productive and competitive, Wehby told GraceKennedy’s annual general meeting at the company’s head office in downtown Kingston on Wednesday.

“We have played our part to a certain extent, but we can’t do it alone, it has to be a national effort,” Wehby said, adding that, “this can be an opportunity going forward, where our farmers can get to work and get into cattle farming in a lot more focused way.”

GraceKennedy was forced to look into producing corned beef locally following a three-month ban on the tinned food last year, after reports from Brazilian authorities that several major meat processors in that country had been “selling rotten beef and poultry”.

Brazil supplies more than 95 per cent of the corned beef imported in Jamaica, the vast majority of which GraceKennedy distributes.

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“Last year, you probably would have heard me, probably a bit emotional about the corned beef being off the market,” Wehby said.

GraceKennedy said it missed out on sales of over $500 million for its corned beef product last year. Notwithstanding, the company was able to record $92.48 billion in revenue in 2017, a milestone for the company.

“It’s significant to the group. But you know what, when there is a crises, there is an opportunity. And the team, our GKS team, said how are we going to make it up, and as I stand here in front of the owners of GraceKenedy, I am so proud to say that notwithstanding the loss of $500 million in revenue, which was outside of our control, GKS recorded increased revenue and increased profit,” the CEO said.

Also on a positive note, Wehby reported that during the period of the ban, the demand for Grace Vienna Sausage increased.

“What happened is that our manufacturing actually increased because more people started to buy Vienna (sausage), so we were producing a lot more,” Wehby said.

For him, the local production of corned beef isn’t just a pipe dream.

“We always encourage innovation. When we were in a crisis, with corned beef, I said to myself, why can’t we produce corned beef locally, and I got a blank stare from some of the executives” Wehby said.

Reflecting further, he added: “I remember distinctly, a politician, laughing at me, almost ridiculing me about local corned beef. And (yet) it tastes good.”

Wehby

Wehby told shareholders that GraceKennedy’s innovation team has done a proposal about going forward with the production.

“We not giving up; we are saying that this is a national effort. We are going to need policy support, but it can be done. And we have shown that it can be done by producing the local corned beef,” Wehby said.

GraceKennedy has also recently ramped up its involvement in the agricultural sector. It currently contracts farmers to supply it with scotch bonnet peppers on 200 acres of lands. It now wants to increase that to 300 acres.

The company plans to increase pepper farmlands that feed its factory with the raw material by 50 per cent, to meet export demand for the product, and create farming jobs.

The company previously imported the pepper mash from Costa Rica, and produced the sauce in Jamaica.

“Us importing pepper from Costa Rica, and as Jamaicans, that turned out not to make any sense, and we entered into a partnership with some farmers in Hounslow (St Elizabeth), and that has turned out to be very successful, in the sense that instead of importing pepper from Costa Rica, we are now exporting to five other countries,” Wehby told shareholders on Wednesday.

He added: “So we have come up with the mother farm concept where we will lease the land, put in the infrastructure, we will give advice to the farmers, but we are going to divide in 10-acre plots, so the small farmer will get an opportunity to produce.”