GraceKennedy

Under New Leadership

Within Grace, Kennedy & Co., Ltd. there was no doubt about the line of succession.
Wisely, after having three years previously announced his impending retirement, Carlton
Alexander had moved to find agreement on the choice of the next Chief Executive
Officer.

Two days after his death, the Board met. As was usual in the absence of Alexander,
Rafael Diaz took the chair. Carlton's death was sadly noted and funeral arrangements
discussed. Then, unanimously, Rafael Diaz was appointed Chairman and Chief Executive
Officer. His place as Finance Director was, again with unanimous approval, filled by
Peter Moss-Solomon.

Beyond the Boardroom, and in the wider society, there was inevitable concern. Who, if
anyone, could follow in Carlton Alexander's footsteps? Rafael Diaz, in accepting the
appointment, displayed his absolute self-confidence - not only in his qualification to
succeed, but also in his commitment to add another wing to the already sprawling
mansion of Grace, Kennedy & Co., Ltd.

Rafael Diaz joined Grace, Kennedy in 1969 as an accountant and became Financial
Controller in 1974. Two years later, as Finance Director, he was a member of the Board
of Directors becoming Deputy Chairman in 1980. When Rafael Diaz succeeded Carlton
Alexander, the Grace Group had an annual turnover of over $1.5 billion. There were
1,632 shareholders in the holding Company with 76 subsidiaries and associated
companies employing nearly 2,000 permanent and 500 seasonal workers. The Company
operated in six countries; Jamaica, Belize, Trinidad, Canada (Montreal, with B. Terfloth,
and Toronto), the United Kingdom (with Terfloth), and the United States (Atlanta with
Terfloth), and Miami. It was recognized, as Dr. Dudley Stokes put it in the Gleaner of
October 1, 1989:

.... as one of the country's best run businesses, with a sound management structure, a
strong corporate image, and a relatively well paid work force of nearly 2,000.

And when asked what advice he would most like to give the Government, Diaz replied:

What really is required is to earn more foreign exchange. My advice to the Government,
therefore, is to focus on an export-led economy.

This was the view of the new Chief Executive Officer of a traditional importing-
distributing business.

Rafael Diaz had long been an advocate of a greater export business. His first
consideration was the earning of foreign exchange to meet even a fraction of the
Company's huge overseas financial commitments. Through the years, however, that
concern had grown. There had emerged the concept of another dimension of the interests
of the Company through the building of an Export Department and the first tentative
essays into overseas trade. Grace, kennedy & Co., Ltd., Importers and Distributors, might

also be Grace, Kennedy & Co., Trading Company Ltd. Diaz had support within the
Company and now, in 1989, Grace, Kennedy & Co., Ltd. was reunited with Terfloth &
Co., Ltd., World Trader. No better time to set the sights.

Nor were the new leadership in the Company and the re-association with the Terfloth
enterprise the only new features in the Jamaican business world. By 1990 there was a
national change which seemed likely to affect that world: a new Government. On the
advent of national elections in 1989 the possibility of a return to power by the People's
National Party seemed to raise economic rather than political apprehension. In the view
of one member of the Grace, Kennedy Board, the major risk from a PNP Government
would be the return of corned beef and canned mackerel imports to the Jamaica
Commodity Trading Company. Since his overturn by the Jamaica Labour Party in 1980,
Michael Manley had proclaimed his previous misjudgments. Moreover, still recognized
by the population at large as 'one who love poor brethren', his election slogan of 'We Put
People First' raised hopes among the mass of small consumers in days of wild
'consumerism'.

Resuming Growth

In May 1989, Grace, Kennedy & Co., Ltd. undertook to sign a management contract with
Lipton (Jamaica) Ltd., and also agreed to a 22.5 per cent shareholding in a large broiler-
fowl operation, Goldcrest Farms Ltd., in which Seprod would be the major shareholder
with 45 per cent of the equity and the Management Contract. The market for broiler meat
was estimated at 124 million pounds a year. It was anticipated that profits would begin in
the third year of production.

Also in May, the Company acquired the 51 per cent shareholding of Ernest Viera & Co.,
Ltd., partners in Viera & Grace, Kennedy International Ltd. in Trinidad. With the
approval of the Government of Trinidad, that company now became a wholly owned
subsidiary. Robert McDonald was appointed General Manager of Grace, Kennedy Export
Trading Ltd., responsible also for operations in Trinidad, Belize and Ontario. In Miami
(Atlantic & Pacific Trading Co., Ltd.) Nick Bogle was to be resident representative.
These were the administrative beginnings directed towards Rafael Diaz's ultimate aim.

In September 1990, a Barbadian survey showed Grace, Kennedy & Co., Ltd. as the
largest of the Caribbean's listed companies when ranked by volume of sales during 1989.
It was, not, however near the top ranking in terms of market value. In that, the Company
ranked seventh out of ten listed, coming behind one Barbadian, one Trinidadian and four
Jamaican concerns.

In June 1991, for the tenth time in all and the fifth in a row, Grace, Kennedy won the
Jamaica Manufacturers' Association Award 'For the most outstanding performance as
Trader/Exporter'. Exports had gone to CARICOM Countries, Bahamas, Bermuda, The
Virgin Islands, Cayman, Nigeria, Germany, Italy, the United Kingdom, the United States
and Canada. But in thanking all those who had contributed to the success, Grace,
Kennedy acknowledged that the total value of goods exported, though pleasing, was still

small - something over $50 million covering a range of about a hundred food and other
items.

We thank them and are proud of them. They are making sure that our goal of
significantly increasing our export will become a reality!

No overstatement of accomplishment in that.

Very soon after taking office, Rafael Diaz called his Board of Directors into conference
in Ocho Rios.