JBM searching for joint venture financing for $4b projects

Jamaica Bauxite Mining Limited, JBM, is moving ahead with two of its commercial projects that have been in the works for a while, with a search for joint venture financing partners now under way.

The indicative cost of the projects is about $4 billion, says Douglas Walker of JBM. They include a commercial park targeted at space for outsourcing companies and residential housing.

JBM’s push into new lines of business and new investments is meant to offset declines in other business lines, notably the falloff in income that used to flow from ship handling services for sugar through the port it owns in St Ann.

JBM began its hunt for partners on November 12. Its tender document notes that sugar shipped through the Reynolds Pier has declined precipitously to an average of 6,000 in 2020, which meant the almost total erosion of one revenue stream.

“With diminishing revenue streams and the continued changes in the operating environment, the need to manage risks requires the company to take steps to remain viable. A part of that viability effort is to optimise its assets as well as diversify and identify more reliable revenue sources,” he said.

JBM manages the Reynolds Pier as well as 4,000 acres of land on the Lydford Estate in St Ann, and is a provider of bulk-water supplies, a business segment which is also being expanded to include bottled water. As handler of limestone export cargo, it is also eyeing growth from the mining and quarrying sector to further buttress the port’s income.

Otherwise, JBM is the holding company for Jamaica’s 51 per cent stake in the Discovery Bauxite Partners mining operation in St Ann, formerly known as Noranda. The bauxite mine is managed by the government’s American partner.

The two projects for which JBM is hunting partners are for the development of: a 260,000-square foot commercial park, which will include a BPO centre, commercial shops, different-size warehouses, a clubhouse/homework centre; and a residential complex, called Orange Park, which will provide 500 dwelling lots/houses.

The indicative cost for each is unknown, nor is the size of the spending to be done by JBM itself, but the Ministry of Finance’s Jamaica Public Bodies report for this fiscal year indicated that JBM plans to renovate and upgrade its warehouse facilities into a viable commercial park, and that the project would require capital expenditure of $609 million.

The housing project is “intended to develop a new community with homes and interrelated open space and recreation amenities on approximately 150 acres near existing and planned infrastructure, services, and jobs,” JBM said in its tender document.

The land parcel is said to be able to accommodate over 1,000 houses. However, the first tier of the project is earmarked for half that number, as well as supporting infrastructure, including road network, sewage treatment system, drains, designated green areas and recreational facilities.

As a state-owned business, the JBM projects aim to deliver on government policy, such as putting mined-out lands back into economic use, enticing investments, and fostering economic activity and jobs.

The projects aim to create around 1,600 direct and indirect jobs while opening up opportunities for rural development in the area.

Organisations identified as eligible to bid on the tender were commercial banks, building societies, brokers and dealers, securities dealers, and investment houses.

JBM is seeking a financial proposal for joint venture partnership and/or a proposal on the appropriate financial structure for the two projects.

avia.collinder@gleanerjm.com