Clarendon Lime, the consortium that, a decade ago, wooed British com-pany Rugby into taking a majority stake in a 120,000 tonne calcined lime plant here, has sold its 39 per cent stake in the operation to Cemex, chairman Horace Clarke confirmed yesterday.
The acquisition gives Cemex, the big Mexican cement producer, Clarendon Lime's full control of the company, having previously taken majority stake with its take-over two years ago of Rugby's parent, the UK-based building material producer, RMC.
"We have sold our interest in Rugby Jamaica Lime Company to Cemex," Clarke, a former Jamaican mining and energy minister, told the Financial Gleaner.
"By the we, I mean Clarendon Lime Company."
Clarke declined to say how much Cemex paid for the 39 per cent, but other sources familiar with the deal suggested that it was over US$4 million.
Three government companies, the National Investment Bank of Jamaica (NIBJ), the Development Bank of Jamaica, with which NIBJ has been merged, and Clarendon Alumina Production (CAP) controlled 62 per cent of Clarendon Lime. The Donna Duncan-controlled Jamaica Venture Fund owned 13 per cent, while Limestone Company of Jamaica (Licojam), Horace Clarke's vehicle, held 20 per cent.
Cemex officials were not immediately available for comment on the strategic reason for their acquisition of Clarendon's stake in a firm, whose product is a critical component in the refining of bauxite to alumina.
However, Financial Gleaner sources suggested that giant Cemex would find dealing with a small partner irritating and would want to
be in a position to clearly dictate terms and ensure the investment was in place in the event it decides to expand the facility. Jamaica is in significant deficit in its calcined lime production, a fact also highlighted by Clarke.
"There is not enough production here to meet the requirement of the alumina companies," Clarke said. "And there are a number of expansion projects on the drawing boards."
All of Rugby Jamaica's calcined lime production is sold to 1.3 million tonne Jamalco alumina refinery, a 50:50 partnership between Alcoa, the US metals giant, and the Jamaica government's cap. Alcoa plans to more than double the size of the refinery, but is awaiting on the government to tie-up agreements for cheaper energy sources, necessary to make the project feasible.
"Cemex won't expand until there is greater certainty about the Jamalco expansion," said a source believed to be familiar with the thinking of Cemex.
Cemex, even before its acquisition of Rugby Jamaica, already had more than a toe-hold in Jamaica. It, for years, was a minority stakeholder in Caribbean Cement Company, the local producer of Portland cement. Cemex still holds 10 per cent of Carib Cement as well as 20 per cent of CCC's parent, Trinidad Cement Company.
Last week, Cemex, which is listed on the New York Stock Exchange announced an offer of US$12.8 billion for the Australian building materials company, Rinker Group.
The deal, if it goes through, would create the world's largest building material company with sales of US$23.2 billion and more than 67,000 employees in over 50 countries.
- business@gleanerjm.com
