Musson shifts global focus to home market
Musson Jamaica Limited is a sprawling group, which at one time had up to 60 subsidiaries and associated businesses, and now operates in 38 countries.
But Chairman and CEO Paul 'PB' Scott does not consider the company a conglomerate in the true sense of the word.
"We look at ourselves as proprietors of various businesses that we are sponsoring, growing, building and working on strategies," he told the Financial Gleaner in an interview.
What is the prevailing group strategy for the mega business for which Jamaica's Finance Minister, Dr Nigel Clarke, was chief operating officer up to his recent entry into representational politics and the Cabinet? Scott has signalled that the group is refocusing on achieving greater value for shareholders and customers by doing more business in Jamaica.
"We spent the last 20 years expanding outside of Jamaica, but the truth is, Jamaica is really in a wonderful position right now and we are very privileged to be sitting in Jamaica, and there are a lot of opportunities. So, we are spending a lot of time looking at investing in our home country," said Scott, who heads the diverse business that his grandfather, the late Desmond Blades, turned around as an expatriate manager in the 1960s and gained ownership in the late 1970s. At that time, one of Musson's most lucrative business lines was selling flour imported from Haiti.
Now, a far more sophisticated Musson has been floating some of its companies to raise cash on the stock market. The most recent was Stanley Motta Limited, which went to market for $4 billion, and has now joined General Accident, Productive Business Solutions, Eppley and long-time listed company Seprod on the Jamaica Stock Exchange.
The cash raised by Stanley Motta is being used to finance some 2,000 square feet of office space in the new tech park, 58 HWT, located at 58 Half-Way Tree Road in Kingston, to house one of the largest business process outsourcing operations in Jamaica. Scott says all that new space has already been leased.
Musson's new Jamaica focus will also see the group continuing its property development foray which started with 58 HWT. Over the next couple of years, Musson will develop what Scott would only describe a "significant" piece of land which it owns jointly with Mayberry Investments Limited.
The property at Chalmer's Avenue, off Molynes Road, formerly housed the Cable and Wireless Sports Club. There, Musson plans to build a mix of commercial buildings and residences.
Scott gave few details about the planned development, but said it was scheduled to start next year. The group has other significant land holdings which are being considered for development in the future.
The Musson boss, who is a former president of the Private Sector Organisation of Jamaica, said his group's confidence in, and refocusing on, Jamaica can be seen in other major investment such as the multibillion-dollar expansion at Seprod, which has built a new grain mill and reorganised its dairy business.
Seprod recently shuttered milk production at its St Thomas plant and relocated all manufacturing to its Bog Walk factory, bought recently from NestlÈ. Dairy farming will still be based in St Thomas.
"I think Jamaica is going to be an ever-improving environment for the next 10 years, hopefully, if the fiscal discipline and the focus on good management and governance continues," said Scott of the macroeconomy.
Musson had followed Jamaica-based telecoms Digicel in its global build-out, with subsidiary Facey Telecoms having been, in Scott's assessment, "integrated into Digicel's logistics" selling airtime and handsets. That explained its presence in markets such as Papua New Guinea, New Zealand and Myanmar. Another of Musson's telecoms subsidiaries, Radius Communication, is domiciled in Ireland.
Through it technology company, Productive Business Solutions, PBS, Musson has been involved in selling printing equipment, security scanners and other technology-based products in markets including the Dominican Republic and CuraÁao.
It has a big presence in the countries of Central America and recently entered Colombia, a market that the Musson CEO says has exciting prospects. In these locations, PBS represents big-name tech firms such as Oracle, Cisco and in some markets, NCR.
Scott is upbeat about this business despite what he said are "downward trends in sales in Nicaragua and some other markets.
"We see PBS as (a company) that can continue to expand and grow. We spend a lot of time on that business. The entire region has been underinvesting in IT. We expect that this is going to improve dramatically over time," he said.
The focus on Jamaica does not mean an end to investments elsewhere as seen in PBS's expansion into Colombia and Suriname earlier this year.
As to the funding for further investments, Scott does not foresee any more of the group's businesses going to market at this time, even while noting that listing brings external discipline, which enforces corporate accountability while raising capital.
"At this point in time, I don't think we are going to float any other companies, although
it's always a consideration depending on the market and what the economics are," he said Scott.
The move to public ownership will not include the Musson parent business, which Scott says will remain in private hands.
"Musson is a portfolio of businesses. It is not a conglomerate in the same way as other large conglomerates in the Caribbean. We have great management in the operations of the businesses," he asserted.
Asked about Nigel Clarke's successor as the chief of operations at the company, Scott said Clarke cannot be replaced and that several persons have been assigned aspects of the ex-COO's former portfolio.
He adds that since his grandfather bought majority shareholding in the Musson Jamaica four decades ago, the plan had been to maintain the parent company as a partnership, with ownership concentrated in the hands of Blades' family and "partners who are associated with or work in the business".
But not wanting to close the door on any options in the future, PB Scott added that, in terms of the ultimate business model and goals, Musson was still "a work in progress".