5 Conglomerates With Exposure to the Caribbean

Around the world, large conglomerates have traditionally played a significant role in providing stable employment and supporting the economy. Compared to small businesses, conglomerates are often better positioned to withstand economic downturns because their operations are diversified across a number of different businesses and industries. Warren Buffett's Berkshire Hathaway, for example, is involved in the financial services, insurance, retailing and energy sectors through more than 50 different subsidiaries, while Procter & Gamble Co. owns dozens of brands offering cosmetic, child care, food and cleaning products. If one of those businesses is not performing well in terms of sales, another division of the conglomerate can support the overall performance of the company.

Large conglomerates, with deep pockets and diverse business lines have been essential to supporting the economies of the Caribbean islands. Headquartered in one of the region’s commercial hubs—Barbados, Jamaica or Trinidad—the majority of those conglomerates are publicly traded, offering the region's citizens the opportunity to participate in their success. Below is a list of five successful conglomerates that operate in the Caribbean region. 

With a history dating back to 1922, GraceKennedy Limited has evolved into one of the Caribbean’s most eminent corporate groups. The company began operations as a shipping and insurance business in Jamaica. In the late 1950s, GraceKennedy invested in the construction of factories to create its own consumer products. Grace Vienna Sausage, its first consumer brand, launched in 1959 and was quickly followed by the debut of Grace Ketchup and Grace Fruit Juices.

Today, GraceKennedy Limited is still headquartered in Jamaica, with a number of subsidiaries based in the Caribbean, the United Kingdom and the United States that manufacture food products and provide financial services.

With more than 175 years of corporate history, Sagicor is one of the Caribbean’s oldest companies. Originally established in 1840 as the Barbados Mutual Life Assurance Society, the company changed its structure and name in 2002 after acquiring a series of insurance and financial services firms. Through its subsidiaries, Sagicor Financial Corporation provides a wide range of insurance and investment products to individuals and organizations in more than 20 countries. In addition to being listed on three of the Caribbean’s largest stock exchanges, Sagicor is the only Barbados-based company to be listed on the London Stock Exchange.

Cave Shepherd and Co. was born in 1906 when two businessmen from Barbados, J. P. Shepherd and R. G. Cave, formed a partnership to start a retail store. After decades of expansion, Shepherd retired and sold his stake in the business to his longtime business partner, who reestablished it as a limited liability company and listed it on the Barbados Stock Exchange in 1951.

In addition to owning a number of department stores in Barbados, Cave Shepherd and Co. Limited has since diversified its operations into tourism, property development and financial services. The company's portfolio currently includes a 75% stake in a local mutual fund company called Fortress Fund Managers and a minority ownership stake in DGM Bank & Trust Group, an investment bank with over $450 million in assets under management.

Formerly known as the Neal and Massy Group of Companies, the Massy Group is headquartered in the twin island nation of Trinidad and Tobago. The company came into existence in 1932 following a merger between two machinery and engineering companies. In 1958, Neal and Massy went public and expanded its operations beyond industrial equipment to neighboring islands in the Caribbean. Massy is one of the Caribbean's largest conglomerates with over 60 different subsidiaries involved in retail, real estate, insurance, finance and energy and gas.

Founded in Trinidad, the ANSA McAL Group of Companies has been doing business since 1881. Over the years, the company has been involved in a number of mergers and acquisitions, growing into one of the Caribbean's more diversified conglomerates. In 2014, ANSA McAL reported more than $2 billion worth of assets and a net profit of $167 million. The company is currently involved in retail, automotive, media, manufacturing and financial services.

When it comes to the development of a healthy economy, large conglomerates are as important as the presence of numerous small businesses. In the Caribbean, conglomerates currently provide employment for tens of thousands of people through their many subsidiaries. Additionally, they are a great source of tax revenue for governments in the region. 

(For related reading, see: Conglomerates: Cash Cows or Corporate Chaos.)

At the time of publication, the author was long Sagicor Financial Corporation. He does not intend to trade those securities within 48 hours of publication.