Jamaica Fibreglass Products is looking to raise in the region of $280 million on the capital market to fund an expansion drive that will see it making a concerted foray into export markets in North America and the Caribbean.
Through its investment adviser GK Capital, the privately held, family-run business that’s led by Metry Seaga and Stephen Sirgany has telescoped its willingness to consider tapping the stock market for equity capital through an initial public offering.
“This engagement will involve evaluating several strategic options for fundraising,” GK Capital said in a statement at the weekend.
“We felt it was the right time,” Seaga, a director in the company, told the Financial Gleaner on Tuesday on the question of why the company was looking to the capital market after 35 years of self-financing.
“The directors of the company are getting older. We are looking for new avenues to explore and we felt that with the markets as they are now, it was the right time,” he said.
A market penetration into the US northeast coast, utilising preferential terms under the Caribbean Basin Initiative trade pact, is achievable, the Jamaica Fibreglass directors believe. They are also pinning hope on the future expansion of some of the company’s key clients – chains such as Starbucks, Wendy’s and KFC – into other Caribbean markets.
The main business line for the company has been the manufacture of seating and other furnishings for restaurants and hotels. The massive downturn in business for the hospitality sector, as a result of the COVID-19 pandemic, has seen an erosion in Jamaica Fibreglass’ sales in the region of 20 per cent, Seaga said.
Declining sales, however, have not meant a fall-off in profit, which is growing in the region of around 10 per cent, he said.
To offset the decline in its traditional revenue base, the company has ramped up production of in-demand products, including COVID-19 testing booths, as well as screens and dividers used by the Ministry of Health and hospitals in the ongoing pandemic control measures, as well as private companies, such as large business process outsourcing companies.
Seaga is optimistic that the pipeline projects encompassing construction of 25,000 new hotel rooms in Jamaica over the next several years will become a source of new business despite the near wipeout of the hospitality sector from the pandemic.
“I am very bullish about that sector and Jamaica in general. I think that we [the Jamaican economy] are going to come back with a bang,” he declared.
Director Stephen Sirgany said in the joint statement issued with GK Capital that the capital raised would be good for the company and its employees, which number around 75.
“As the founder of the company, I have seen it grow from its infancy stages to what I can proudly say is the Caribbean’s largest and most recognised contract furniture manufacturing company. Our employees are the backbone of our success and this new growth path will allow them to grow as well,” said Sirgany. “New capital and greater exposure to external markets will take us to a new place that we once only dreamed of,” he said.
