By Alva Edwards, Acting Financial Editor
J. M. Matalon J. A. Matalon
THE MATALON-CONTROLLED Industrial Commercial Developments (ICD) is considering selling Redimix Concrete to Cayman-based company, Cay-man Concrete Limited.
The sale would see the Group's powerful construction business shrink to just West Indies Home Contractors (WIHCON). The company said it planned to concentrate its construction efforts on housing.
Redimix Concrete is part of ICD, which officially replaced Mechala Group Jamaica, incorporated five years ago, as the operating holding company for the subsidiaries, previously owned directly or indirectly by the Matalon family.
ICD boss Joseph M. Matalon said this week: "We are currently having discussions with Cayman Concrete Limited as to the sale of Redimix Concrete and expect a deal to be finalised by the middle of February. I understand that Cayman Concrete which is one of the leading concrete companies on the Cayman Islands, is looking to diversify its operations in the rest of the Caribbean region and regard Jamaica as an important market."
Although he did not place a valuation on the deal, industry sources speculate that Redimix Concrete could fetch anywhere between US$3 to US$4 million.
Redimix was originally established as a supplier of concrete and aggregate to the Mechala Group's housing contracting arm, West Indies Home Contractors Limited (WIHCON). Founded during the 60's the concrete company has manage to expand its customer base and during the mid nineties was the largest supplier of concrete to the local construction market. In 1996, the company generated US$5 million in revenue.
In recent years, it has lost its premier position to local company Pre-Mix Concrete run by Ken Barrow.
Redimix offers a complete concreting service with five batching plants (two of them portable) strategically located in Kingston, St Catherine and Negril and two crushing plants located in Kingston and one in St Mary's Aqualta Vale outside Anotto Bay. Redimix has the capacity to supply pump and place approximately 160 yards of concrete per hour in Kingston.
The company has participated in some of the more recent bigger construction development projects including the Bank of Nova Scotia (BNS) building in New Kingston, Montego Bay's Digiport and the building of the Riu hotel in Negril.
Redimix's managing director, Peter Matalon, who served as a director of WIHCON for fourteen years, said: "The group is looking to return to its core business and will now be focusing on its housing and financial services division. If the company is to be sold, it will do so as a going concern and I will insist that a new buyer retains existing employees. At this point in time we have no significant contracts on our books, however we do have some invitations to tender to consider. There are a host of ways to deal with Redimix. We may divest ourselves of it completely, break it up and sell it piecemeal, sell our plants and equipment or we may even take the decision to re-invest in it, who knows.
Over the last few years Joseph M. Matalon has undertaken a comprehensive restructuring of the family's interests. After divesting a number of smaller operations, Mr. Matalon now appears focused on reorganising several of the larger operations under his control.
As of January 2 of this year, Joseph A. Matalon gave up his position as president and chief executive officer of the renamed Mechala Group (Industrial Commercial Developments) but remains as WIHCON's non-executive chairman. Joseph M. Matalon assumed the position of chief executive to Industrial Commercial Developments.
Currently a deal exists that could see the formation of the biggest merchant banking entity in Jamaica, with the merger of the Matalon family's Sigma Investment Management Sys-tems (SIMS) with Manufacturers Merchant Bank (MMB), as part of efforts to compete more efficiently both locally and overseas. The merger is still to get approval from the Bank of Jamaica (BoJ) and Ministry of Finance.
The combined body to be called Manufacturers Sigma Merchant Bank (MSMB) will be headed by Mechala's chairman Joseph M. Matalon, with MMB's incumbent president and chief executive officer, Peter Melhado as chief executive officer.
