En­tre­pre­neur­ial per­se­ver­ance: Three Ja­maican busi­ness­men tell their sto­ries

Jamaica Gleaner - - BUSINESS - Steven.jack­son@glean­erjm.com

PETER MCCON­NELL, Howard Mitchell and Harry Maragh have been suc­cess­ful at busi­ness, but their en­tre­pre­neur­ial jour­neys took dif­fer­ent paths, as they each out­lined last Thurs­day.

In one case, fam­ily con­nec­tions helped, but for all three, what re­ally ap­peared to unite them was bravado, al­beit at dif­fer­ent de­grees, and con­fi­dence in their skill sets.

Both Maragh, the chair­man and CEO of Lan­na­man & Morris Ship­ping Lim­ited, and McCon­nell, man­ag­ing di­rec­tor of Trade Winds Cit­rus Lim­ited, tran­si­tioned from worker to owner at their re­spec­tive com­pa­nies. They both gained ex­pe­ri­ence in their re­spec­tive com­pa­nies, which they pitched as sweat eq­uity when they ap­proached fi­nanciers to back their pur­chase of the busi­nesses.

Mitchell, a busi­ness­man and lawyer, had a dif­fer­ent fo­cus – he built busi­nesses that oth­ers would want to buy.

Maragh ac­quired Lan­na­man & Morris Ship­ping in the 1990s.

“I started the day as an em­ployee and ended the af­ter­noon as the owner of the com­pany,” said Maragh, one of the three pre­sen­ters at the monthly in­vestor fo­rum hosted by May­berry In­vest­ments Lim­ited.

“I had to sell the car to pay an em­ployee. They didn’t know I had to take the bus on Mar­cus Gar­vey Drive. I waited in the dark be­cause I didn’t want the em­ploy­ees see­ing me take the bus,” he re­called about the early days.

Maragh joined the com­pany in 1985. Seven years later, the founders, Vance Lan­na­man and Ains­ley Morris, de­cided to off­load the busi­ness, which rep­re­sents some of the world’s largest cruise and con­tainer ship­ping lines, hav­ing reached re­tire­ment.


“They put the com­pany up for sale and there was a lot of bid­ders and I was the last among the lot. Al­though I was one of their best em­ploy­ees, I was broke,” Maragh said.

His pri­mary ad­van­tage was that he knew the busi­ness and al­ready worked at the com­pany. This would re­lieve the over­seas prin­ci­pals – that is, the ves­sels with which the ship­ping com­pany did busi­ness – of the need to con­duct due dili­gence on out­side buy­ers. Con­se­quently, Lan­na­man and Morris gave Maragh the op­tion to buy.

“I thought about it long and hard – I am broke but smart, and af­ter some ad­vice I de­cided to take the plunge. Did our financials and due dili­gence and ap­proached the banks. NCB stood out and de­cided to take the plunge with me. In fact, they were so con­vinced I could run the com­pany that they paid out to the own­ers even with­out my knowl­edge. It was the day af­ter that I heard they re­ceived the cheque,” he said. Peter McCon­nell, man­ag­ing di­rec­tor of Trade Winds Cit­rus Lim­ited.

For McCon­nell, he at­tempted to buy Trade Winds Cit­rus from the “older gen­er­a­tion” in his fam­ily af­ter it was put up for sale for a fourth time, around 2010.

“I was seen as the boss, but I was a worker and never a share­holder,” re­called McCon­nell, who stud­ied agron­omy then en­tered the fam­ily busi­ness.

McCon­nell ap­proached May­berry as his fi­nan­cial ad­viser. He ini­tially wanted to buy 50 per cent of the com­pany and bring in new share­hold­ers to hold the re­main­der. But May­berry con­vinced McCon­nell to seek 100 per cent con­trol, said McCon­nell at the fo­rum.

“I re­luc­tantly agreed and the bank gave us the money to buy out 100 per cent of the busi­ness,” McCon­nell said. “It was a good deal at the time – and it was over­whelm­ing to me. There was a very heavy lever­age play and signed per­sonal guar­an­tees for things.”

The trans­ac­tion was in US dol­lars but bor­rowed in Ja­maican dol­lars.

McCon­nell, how­ever, in­di­cated that the deal oc­curred over a pe­riod of un­ex­pected cur­rency de­pre­ci­a­tion when the dol­lar slipped by $7 to around $93 to the US dol­lar over three months.

“The stress started,” he re­called, ex­plain­ing that the de­pre­ci­a­tion ef­fec­tively re­sulted in him los­ing the funds to fi­nance a new line for the plant.

McCon­nell as­sumed con­trol of the share­hold­ing in Jan­uary 2012, but se­vere drought fol­lowed de­pre­ci­a­tion. The busi­ness plan in­volved pack­age mod­erni­sa­tion and the ex­pan­sion of Trade Winds’ line of prod­ucts to in­clude non-chilled drinks in tetra pak pack­ag­ing.

“That was pres­sure. And I Har­riat ‘Harry’ Maragh

im­me­di­ately started ne­go­ti­at­ing with Wisynco for them to come in as part­ners. I closed that deal with them in Au­gust 2013,” McCon­nell said.

“So I went from own­ing zero to 100 per cent, and nine months later I was back at 50 per cent ... I have no re­grets, be­cause at the time the world was on my shoul­ders and I had a plan and it didn’t go 100 per cent as charted. But one thing I wasn’t go­ing to do was fail.”

Trade Winds makes the TruJuice line of drinks along with Freshhh, Wake­field, Tru Tea, Squeezz and Cal­i­coJack rum punch.

Mitchell in­di­cated that his back­ing came from the late G. Ray­mond Chang, who in­vested in the up­grade of Ja­maica Lot­tery Com­pany (JLC) and later in the set up of box maker Cor­rpak Ja­maica. Both en­ti­ties were later sold. Ja­maica Lot­tery Com­pany be­came Supreme Ven­tures Lim­ited and Cor­rpak was off­loaded this year.


Mitchell, in his trea­tise on build­ing an en­ter­prise that oth­ers will want to takeover, stressed that hon­esty and trans­parency needs to per­me­ate ev­ery as­pect of the busi­ness in or­der to gain the con­fi­dence of in­vestors.

Dur­ing his ten­ure as chair of JLC, the com­pany worked its way from a deficit of $114 mil­lion. In seven years, it sold for US$14 mil­lion. Then in 2004, Chang part­nered with Mitchell and es­tab­lished a plant for the man­u­fac­tur­ing of cor­ru­gated board and boxes, Cor­rpak, which was sold to Cana­dian Over­seas Pack­ag­ing In­dus­tries Lim­ited for an undis­closed sum.

“Cap­i­tal comes in many

forms. You can­not run a busi­ness with­out pay­ing the bills. But there are ways in which you can find a sub­sti­tute for money and be cap­i­talised — hu­man cap­i­tal is the most im­por­tant form of cap­i­tal,” said Mitchell.

“Oth­er­wise, find some­one with money who be­lieves in you, whether it’s the bank or an in­di­vid­ual. Make sure that the blocks that you build your busi­ness on are sturdy and that your value propo­si­tion must be good,” Mitchell said.


Busi­ness­man and lawyer, Howard Mitchell.

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