Gore invests in quarry to cut home prices
Construction company Gore Developments Limited has set up its own quarry on lands in St Catherine, a $400-million investment that Chairman Phillip Gore says should lead to a reduction in the price of homes it sells in two years.
Gore Developments expects to complete about 3,000 homes within five years through two developments currently under way at Fairfield in St James and Greater Portmore, St Catherine investments totalling $30 billion.
The company has been watching the cost of raw materials, including aggregates, and counting its effects on the homes it sells. The new quarry at Hellshire is meant to tame some of those costs, while making the company less reliant on suppliers.
"What influenced us was the selling price of houses. They go up every year. We decided that since we use so much of the material in our projects, having the quarry would help us to reduce and contain the cost of homes within another two years," Gore told the Financial Gleaner on Tuesday.
He said the company leased 50 acres of land in Hellshire from the Government of Jamaica and has spent $200 million for the lease and preparing five acres of the hilly site initially for the quarrying operation, and another $200 million on equipment.
"The challenge was the preparation of the site," said Gore. "There is a lot of rock there and blasting was the most expensive, including rental of heavy equipment," he said.
Gore Developments has employed additional personnel to staff the quarry operation and has also engaged the services of contract truckers.
The chairman said the quarry should start operating this week. It has the capacity to supply 500,000 tonnes of sand, stone and marl annually, some 300,000 tonnes of which will be used by Gore Developments for its building projects, he said. Another 150,000 tonnes will be sold to other developers.
Gore has been in the construction industry for 30 years, delivering an average of 600-800 homes per year.
In a release about the quarry, chief accountant for Gore Developments Janice Wilson, said the company was already accruing savings of 20 per cent on the price of marl.
"We are projecting to cut the cost of aggregate - sand and stones- used in the construction of our houses - by approximately 48 per cent by the third year of operating the quarry," Wilson added.
Gore Developments is currently building two gated residential complexes - Phoenix Park Village at Bernard Lodge, Greater Portmore, comprising 1,999 being done in phases up to year 2023; and Montego West at Fairfield on the outskirts of Montego Bay, comprising 1,174 homes to be finalised in phases by 2021.
Gore told the Financial Gleaner that the cost to develop Phoenix Park was about $20 billion. It will deliver single-family two-bedroom houses at prices ranging between $9.5 million and $11.5 million. Lot sizes range between 3,500 square feet and 4,500 square feet.
Montego West, for which the total development cost is $10 billion, will feature both two-bedroom and three-bedroom houses ranging in price from $10.5 million to $17.5 million.
Both developments are already on the market, with some homes already delivered to purchasers, Gore said.