By Lavern Clarke, Staff ReporterRUGBY JAMAICA Lime and Minerals Limited is up for sale, following a decision by majority owner RMC Group Plc of London that it wants out of the local lime business, which it originally entered by default.
RMC, which acquired 61 per cent majority interest in the Clarendon-based limestone processing operation when it bought out Rugby Group in 2000, held back on plans to sell the then fledgling Jamaican plant until the business had gained a more solid footing.
With current annual turnover of more than 5 billion pounds sterling, RMC is a top supplier of construction materials, products and services worldwide.
"They really don't get involved in lime or anything in the Caribbean so Rugby Jamaica didn't fit into their core business," said Rugby Jamaica chairman, Horace Clarke, who along with his wife Norma Clarke are the local owners. "They have asked us as minority shareholders to try and buy it."
Clarke says he has financiers actively looking to see where he might source the funds to finance the purchase. RMC is asking for about US$24 million for their interest in the 125,000 tonne capacity plant, he told the Financial Gleaner.
"It's a good business," said the former Mining minister, adding that 80 per cent of his revenues are generated in hard currency.
Other Jamaican interests with money in the business include Jamaica Venture Fund, National Investment Bank of Jamaica and Development Bank of Jamaica, Clarke told the Financial Gleaner.
DBJ boss, Kingsley Thomas, said the investment actually occurred under the National Development Bank, which was merged with the Agricultural Credit Bank three years ago to form DBJ.
Thomas, noting that his bank was aware of RMC's intentions as well as the Rugby Jamaica chairman's search for funds, said: "We are there to facilitate what he (Clarke) wants to do." He adds, however, that DBJ is not among those seeking funds on his behalf.
Clarke meantime says RMC plans to sell off its interest in the company this year and already has two serious offers that they are considering - from Trinidad Cement Limited, majority owners of Caribbean Cement Company, which needs lime to manufacture the commodity; and Lhoist of Belgium, owners of Chemical Lime Company, which already has business here down in the Braziletta Mountains.
Rugby Jamaica crushes limestone almost solely for Jamalco, the largest bauxite operation in Jamaica. Jamalco represents 85 per cent Rugby's market, which the company services under a 25-year contract.
The lime company's performance is closely linked with that of Jamalco's, and had taken a US$2.5 million hit in lost revenues last year, Clarke said then, that flowed from the wildcat strike and subsequent shutdown of the bauxite plant the year prior.
Initially capitalised at US$8 million at start up, the shareholders have invested a total US$30 million in the business to date, US$22 million of which is in the form of debt.
Rugby Jamaica's closest rival was the 30 million tonne capacity Western Cement Company, which manufactures lime for Windalco and Alpart. Western Cement, so named because its owners Robert Cartade and David Wong Ken had planned originally to manufacture cement for export, was closed down last year and one of its main creditors, NIBJ, is about to assume control of the company.
