Nicholas Richards, Gleaner Writer
Mahfood
GraceKennedy has moved John Mahfood from his role as chief operating officer (COO) for its retail and trading division and has told the executive to concentrate on the troubled HiLo supermarket chain.
Yesterday GraceKennedy told the Jamaica Stock Exchange that Mahfood's former job will be assumed by Erwin Burton, in addition to his current job as head of the food division.
"The board felt that (the need to focus on HiLo) would require a lot of my time, which is the decision behind me demitting my current post," Mahfood told Wednesday Business.
RESTRUCTURING
The re-assignment of Mahfood was among several changes among GraceKennedy's senior mangers as part of an organisational restructuring that includes the departure of Brian Goldson from the company and his replacement as the COO for the information services division by Joe Taffe.
Taffe is replaced as managing director of GraceKennedy Remittance Services by Joan Marie Powell.
Yesterday Douglas Orane, GraceKennedy's chairman and CEO described the changes as an effort to streamline the group's operation in the face of difficult business environment.
"All of this is being driven by the fact that since the middle of last year most of the companies on the stock exchange have slowed in sales and profitability so we have decided to act proactively," said Orane.
The aim, he said, was to be more cost-effective internally "and have a new phase on which to deliver GraceKennedy products and services."
Last year GraceKennedy recorded net profit of $ 2.1 billion, on sales of $33 billion.
Sales in 2005 represented a 7.5 per cent increase on the previous year, but profit was down by six per cent.
The difficulties continued into 2006 and earlier this year GraceKennedy revised its five to 15 per cent growth expectation to plus or minus five per cent. It announced a share buy-back plan to boost its stock price.
But while GraceKennedy has pursued a broad recovery strategy, much attention is on HiLo, which lost $60 million in 2005, a significant improvement, officials say, on the performance of the previous year.
Grace denied industry rumours that HiLo, which operates in a sector with notoriously thin margins and intense competition, had been placed on the auction block.
The problems, according to Mahfood, were exacerbated by back-to-back hurricanes in the past two years, which pushed up insurance premiums, rising electricity costs and a devaluing currency.
Mahfood argued, however, that despite the problems confidence in the company had been restored, providing the basis for a turn-around.
"The main focus will be to get HiLo consistently profitable," he said. "We made a profit in June and sales are up 15 per cent this year for the first six months (of 2006)."
