Former MD defiant as Carib Metal Successors placed in liquidation

Avia Collinder, Business Writer

The assets of Carib Metal Successors Limited have been advertised for sale and the quarter-century-old kitchenware maker is being liquidated, but its managing director is insisting that the business can re-emerge if willing investors come forward with fresh capital.

Carib Metal was placed in liquidation by its creditors in July 2011, and John Lee of Pricewater-houseCoopers (PwC) appointed liquidator. The company, which is still in production, operates from Holland Road in Martha Brae, Trelawny.

"The shareholders, based on the status of the company with growing liabilities, decided that it was best to liquidate," said Cadion Campbell of PwC, speaking as an agent of the liquidator.

He declined to disclose the size of the kitchen company's indebtedness. Managing director of Carib Metal William McLeod also passed on that question but said the liabilities were driven primarily "by statutory debts and suppliers of one set of raw materials, and claims of rent from one of the landlords".

Companies Office records list the single largest shareholder as Trafalgar Development Bank, which holds one million of 2.5 million shares.

Trafalgar, having changed ownership about a decade ago, was converted to a commercial bank and now operates as First Global Bank.

"The major shareholders, out of a sense of frustration and unwillingness to put in major investment needed, have decided to liquidate," said McLeod.

Carib Metal "is the only kitchen manufacturing company in the English-speaking Caribbean," said the advertisement for the sale of assets en bloc.

The liquidator is seeking buyers for cutting, greasing, stamping and buffing machines and a spinning lathe.

McLeod insisted to Wednesday Business that the business could be revived as a going concern, with strategic restructuring and an injection of capital to modernise the plant.

"A company which is over 50 years old has come to a point where there is a shift in the marketplace, more imports coming in from China and there is a need for the injection of equity to continue a phase of modernisation and renewal," said McLeod.

Companies Office records indicate that Carib Metal Successors was incorporated in March 1985, which makes it 27 years old, but it succeeds a similar company in the same business known as Carib Metal.

Broad product range

"There is a marketplace for the company within the Caribbean. The company makes the best baking tins, and Jamaican housewives swear by the pots we make," McLeod said.

"We have a very broad product range. A new investor might decide to reduce this range and take the segment that makes just baking tins, or institutional pots, and fashion a new business model."

The company specialises in the production of domestic and commercial cooking pots and pans, and baking tins for the local and international markets.

McLeod said the latter product tends to "fly off the shelves."

Campbell acknowledged that PwC has had enquiries from parties interested in starting up a similar business, but said such discussions are preliminary and would likely not be concluded until after Carib Metal is liquidated.

McLeod said the company has been making big losses since 2006 when the price of aluminium increased on the world market, leading to higher production costs for Carib Metal.

"Local retailers put up resistance to price adjustments," he said. "Up until that time, annual sales fluctuated between J$46 million and $52 million a year, with 10 per cent from exports in Caribbean and sale of cast aluminium Dutch pots in Europe.

"After that, the revenue stream kept sliding down, with the company unable to buy raw materials as needed and the need for working capital."

McLeod said he was unable to provide an estimate of the capital injection needed, nor how much debt was owed.

business@gleanerjm.com