BY AVIA COLLINDER Business reporter
GRACEKENNEDY Limited has just launched its Nurishment line in Nigeria, the country considered to be Africa’s largest economy.
In mid-November, subsidiary Grace Foods Nigeria officially launched Dunn’s River Nurishment (an enriched milk drink), as well as its range of Dunn’s River dry spices. The market for both is estimated in the region of US$600 million.
“While flavoured milk is a very big market but low-margin, our target is the high-margin enriched milk drink segment which is in excess of US$100m [in value]. The dry spice market we estimate to be well over US$500m,” said Ryan Mack, CEO of International Business-GK Foods on Monday.
Grace Foods Nigeria is overseen by the managing director for Grace Foods UK Ltd with an in-market representative who is a resident Nigerian. Ryan Mack said that the company is not targeting a set percentage of market growth in the medium term. Instead it is focusing on building the brand.
“[The ]main challenge is to develop brand recognition. Most of our marketing activities will be around building product awareness and brand recognition,” the Foods CEO said. Grace Foods Nigeria’s main competitors are brands Sport Shake for the milk drink category and Maggi for the dry spice market, he pointed out. Meanwhile, also on Monday, Group CEO Don Wehby said the company’s foods segment in Jamaica has seen significant growth for the nine months ended September 30, over prior year, highlighting the group’s manufacturing and retail (Hi-Lo) segments, as well as Grace Foods & Services.
Wehby said GK Foods Jamaica’s manufacturing arm was boosted by strong demand for products manufactured in Jamaica, efficiency gains, yield improvements and favourable commodity prices — factors combined resulted in higher profits when compared to prior year. Total revenue for the Food Division was $ 47.11b for the nine months ended September 2015, versus $ 40.148 billion for the same period in 2014, an increase of $7 billion. Profits for Foods for the nine months ended September 2015 were $609m versus $879m for the same period in 2014, primarily due to integration and one-off expenses associated with our new acquisition in the USA — GraceKennedy Foods (USA) LLC (dba LaFe).
“In terms of Hi-Lo & Grace Agro Processors (GAP), on a normalised basis, both have seen growth in revenues over the period, with GAP’s revenues being up double digits year-over-year,” Wehby pointed out. The group CEO said Grace Agro Processors (GAP), the company’s processing plant in Hounslow, St Elizabeth, has been performing well despite the challenge of severe drought this year. He noted, as at the end of September, GAP had exported 38 metric tonnes of pepper mash. He said the 2016 outlook for GAP’s export business was expected to grow significantly, “which would directly benefit local farmers with whom GAP partners.” GraceKennedy Foods is responsible for distributing the Grace brand, Grace-owned brands, and the brands of principals in over 40 countries, the company’s website indicates.
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