Friday, November 7, 2008

Charles Johnston - A business titan joins the pantheon of greats

Published: Friday November 7, 2008

Chairman of the Jamaica Producers Group Charles Johnston is one of the true heavyweights of corporate Jamaica, a man who has left an indelible mark on both the agricultural and maritime sector. He has been a transformational figure in that he has brought both sectors, out of a colonial paradigm into the age of the modern free market where competitiveness is the true baromoter of success. There are very few people who can help shape two major industries simultaneously and no one in Jamaica readily comes to mind but Charles Johnston.

Johnston has never rested on his laurels and has continued to seek business opportunities - he is the embodiment of the entrepreneurial spirit who brings a sharpened pragmatism to the task at hand. His lineage tells a story but not the whole story. He has built on successive generations, learned from them and forged a most enviable career on his own terms. His forebears would be most proud of him for taking the family business into both a new century and new millennium.

But industry and commerce does not totally define Charles Johnston - that would be looking at him through a one- dimensional prism. He is that rarest of men, one able to walk among princes and paupers and still win their affection and respect effortlessly. The next generation of Jamaican entrepreneurs can learn much from him and it will be many years before someone sits astride two major economic drivers and make it look so easy. Below is the full text of his address to the PSOJ Hall of Fame Banquet, which took place last week at the Kingston Hilton Hotel.

I am extremely honoured and proud to be inducted into the PSOJ Hall of Fame as this award can very well be considered the premier award of the private sector in Jamaica. I am joining a list of esteemed and respected Jamaicans and I wish to thank the president Chris Zacca and his selection committee for this honour.

Chris, I must comment, however,that the Observer and the PSOJ need a more recent photo library.

I am also very surprised, because frankly, there are a few persons who, had I been on the selection committee, would be standing here instead. Surprised also, because I have never been heavily involved with this organisation.

I ran for vice-president one year, and was elected, but never went back for a number of reasons:

My year as VP was the year of the bankers' cabal, with Delroy Lindsay, Elon Beckford and Cliff Cameron. Billy McConnell, the perrenial VP, was the only non-banker with me. So I did not feel too comfortable. Douglas Orane was the one who convinced me to run for the VP post. You know how it goes - we really need people like you, there is no one else etc etc - so I fell for it. I was fully immersed in the paper that the PSOJ sends out when it dawned on me that Douglas really wanted to distract me from the waterfront.

In announcing my selection, the Gleaner had two headlines on the same page. "Jamaica Producers quits banana exports" and below that "Johnston for PSOJ Hall of Fame".

I was wondering if Oliver was trying to make a connection and what that connection would be. I am still trying to figure it out.

The Johnstons have been exporting bananas for over a century. Pat Johnston and Charles Johnston (great grand and grandfather) started shipping bananas out of Mosquito Cove in Hanover in the 1890s, then switched to Port Antonio.

Jamaica Fruit was formed in 1919 and partnered with Di Giorgio Fruit Co to export and run ships to the US. This continued until 1929 when Jamaica Producers was formed.

It is therefore very painful for me to have to announce the cessation of banana exports from Jamaica, by JP. It is also very painfull because of the loss of jobs that results from the closure of the farm in St Thomas and though it will be switching to cane, cane does not employ the same volume of workers and on such a steady basis.

This decision had to be made because of the change in the weather pattern in Jamaica. And believe me, if the weather goes back to us having a hurricane every 10 years, we will be resuming the export of bananas from Jamaica.

One of the things we are proud of at Jamaica Producers is our involvement in the formation of the Jamaica Welfare Ltd, which is now the Social Welfare Commission. That was in the 1930s. In 2008 JP was spearheading a similar system.

JP Farms had achieved fair trade status, which allowed us to brand our bananas with the Fair Trade brand. To quote the Fair Tade website: "Fair Trade is a strategy for poverty alleviation and sustainable development. Its purpose is to create opportunities for producers and workers who have been economically disadvantaged or marginalised by the conventional trading system. If fair access to markets under better trade conditions would help them to overcome barriers to development, they can join Fair Trade."

Fair Trade standards comprise both minimum social, economic and environmental requirements, which producers must meet to be certified, plus progress requirements that encourage continuous improvement to develop farmers' organisations or the situation of estate workers.

The Fair Tarde premium is money paid on top of the Fairtrade minimum price that is invested in social, environmental and economic developmental projects, decided upon democratically by a committee of producers within the organisation or of workers on a plantation.

All this had been put in place and the first shipments were on the dock the week of Gustav.

We will be looking to see how we can assist other products with Fairtrade registration. Kingston Wharves has recently been in the news and the issue of redundancy is being well ventilated so I will leave that alone, except to say that management must have the right to make jobs and positions redundant, under the law, and in a fair and equitable manner.

I wish to comment on the article in The Sunday Observer, which wondered why Jamaica Fruit was "competing with KW in stevedoring, and that this represented a conflict of interest".

Jamaica Fruit was one of the founding shareholders in Kingston Wharves in 1938, and have operated there continuously, bringing ships to KW then loading and unloading those ships, which process is known as "stevedoring". The shipping lines contract the stevedoring companies, and the lines pay for the service.

Until the year 2000, KW only took the cargo after it was landed, stored it, and delivered it. The consignees pay KW for this service. In 2000 when KW started to stevedore, they were now competing with their customers, but we have not objected to their right to stevedore.

We do however, vehemently object to anyone saying that we do not have that same right.

We were there first.

We all know that crime is the biggest problem in Jamaica, and there are endless studies and initiatives which have been developed to reduce the crime rate.

But there is another problem which Jamaica suffers from which may be as damaging to our economy.

Jamaica has the fastest runners in the world and the slowest approvers in the world. We are natural sprinters on the track but we are marathon runners with development.

I'll give you a classic example. In 1980 Prime Minister Edward Seaga appointed a maritime task force to look into and set up a ship's registry. The task force decided that it was an excellent project but the registry came into being in 1999.
In the meantime, Panama has 6,000 ships registered and the Bahamas 1,200. We lost 19 years.

You will notice the time span covered two goverments, so the problem is not specific to one party.

I am very happy to see that the government may be finally deciding on what sources of fuel to use in the future. This has swung back and forth between coal, LNG, CNG and now back to coal, while all the time we are taking to decide, we are using the most expensive fuel to generate electricity. this decision has been pending for at least six years. again not confined to one government, but a Jamaican problem.

The problem is also not specific to governments. It is a Jamaican problem, with the private sector contributing to it in our own way. We used to only have the Chamber of Commerce, now we have the JMA, JEA, PSOJ, SAJ.

A company like Producers has to pay fees to all, send reps to all, we all come away saying that was a good meeting. We have too many good meetings and too few good results.

I would like to make two recomendations. One to the government:

That is, no new studies should be commissioned by any ministry until they have read all the old studies and rejected them. If they approve any then logically there would be no new study.

To the private sector, can we put a stopwatch on projects, measuring them so that records can be set and broken. Publish the times in the paper monthly so that we can see the progress or lack of it. Nothing should take 19 years to happen. If we can solve our productivity and bureaucracy problems, I am of the opinion that Jamaica has been looking in the wrong direction with our trade, by looking to English-speaking Caricom for our markets, with a population of three million.

The entire Caricom market is smaller than Jamaica, whereas the Dominican Republic is 9.5 million, Cuba is 11.5 million, Costa Rica four million, Honduras 7.6 million, and Panama 3.3 million with total markets of over 36 million. They are our true geographical trading partners, all of them are a day or day and half away by ship. Trinidad is three days away.

In truth we are an English-speaking island in a Latin sea. What has prevented us from trading is largely cultural they are multilingual and we are not. To remedy this our children need to learn Spanish and our government and our schools should make that language mandatory.

Although I am the one being honoured tonight, this award is not just about me. I would not have been able to achieve all that I have achieved alone, and I would like to take the opportunity to recognise some of the persons who have helped me along the way.

Firstly, my colleagues and staff members, past and present, at the Jamaica Producers Group and the Jamaica Fruit and Shipping Group, as well as my business partners, who have worked with me throughout the years.

I would especially like to thank the former MD of Jamaica Producers, Marshall Hall (who unfortunately could not be here tonight). together, Marshall and I made a great team and I am glad to be able to continue to exchange thoughts and ideas with him, as he still sits on the JP board. I would also like to thank my secretary, Andrea Anderson. I may not be an easy person to work with, but this does not alter her ever sunny disposition.

I am eternally grateful to my father and my grandfather, who laid the foundations of my business education and taught me many valuable lessons about life. To my mother Anna, for her unconditional love and support. To my brothers, sisters, nieces and nephews, my thanks. we have had our disagreements, but have always managed to overcome, and there are now 5th generation family members in the business. To my former wife Sakina, for her support over the years, and for being a wonderful mother to our children.

My sons, Edward, Aaron, Marek and Liam who are constant reminders of what life and family are really about, I am really proud of my sons. And to my beautiful wife Lisa, who continues to work by my side , as we enjoy our lives together, thanks for your patience and understanding.

My gratitude to all of you for the parts you have played in my life, this honour is as much yours as it is mine.

Source: Jamaica Observer

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