Moss-Solomon GRACE, KENNEDY & CO. said restructuring of its merchandise division will lead to the loss of around 300 jobs and the phasing out of a number of warehouses it currently operates.
Grace corporate affairs director James Moss-Solomon said the restructuring had seen it offer the divisions 700 staff redundancy as part of a move to streamline operations.
"I want to make it clear we are not closing our merchandise division. We are reorganising. We wanted to be fair to everyone, which has meant that we have offered redundancy to the staff, which have six weeks to decide but we expect to retain around 320 directly".
Mr. Moss-Solomon said Grace currently employs 231 permanent employees, 343 temporary, 27 contractors and another 144 casual staff, all of which have been offered the chance to leave. But he added that 320 were offered new re-employment terms alongside the option of taking redundancy. Another 106 people are likely to be retained by contractors to the reorganised food trading business and 20 are expected to be transferred within the company.
The net effect would be about 300 redundancies, Mr. Moss-Solomon said.
"If all the staff took redundancy it would cost us $140 million", Mr. Moss-Solomon said. Grace expected the investment in restructuring to be effectively paid back through savings after 18 months.
The Grace spokesman said the catalyst for the move was the recent announcement of the imminent end of its partnership with Unilever. "It was the straw that broke the camel's back".
At the start of the month Grace chairman Douglas Orane explained that on June 13 Unilever gave the company notice of termination of their 22-year long 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 per cent of the group's half-year pre-tax profits of $495 million."
As of August 1, food trading divisional director Gregory Moss-Solomon was moved to head international business within the division. Erwin Burton, the company's industrial, retail and trading division boss, was ushered in to take control of the food trading arm as its divisional head.
John Mahfood, former head of international business has taken over Mr. Burton's old role as head of the industrial division.
It will be Mr. Burton's job to oversee the latest changes.
As part of the restructuring the key Newport West distribution centre will be taken over by management and Grace will contract them to distribute its products. The result of that move is that other warehouses such as its Spanish Town Road plant will become obsolete.
Grace's revenues of $3.59 billion for the first quarter ended March 31, 2000 fell slightly when compared with the $3.60 billion recorded in the corresponding period in 1999. Net profit rose from $134 million to $161.3 million.
