ICD Looks To Overseas Markets For More Investments
Armed with cash from the recent liquidation of an investment holding, and with the sale of at least one other subsidiary pending, the ICD Group is pumping more funds into overseas investments, where president and CEO Peter Melhado says an increasing share of the diversified business’ future growth will come from.
Since the sale of many of ICD’s traditional businesses in the 1990s to pay down debt, it has been investing in several profitable technology and other businesses, with a footprint in Central and South America.
In an interview with the Financial Gleaner, Melhado confirmed the asset sale by ICD, a private company, but declined to say which of its several investments it has cashed out and which was next in line.
He said, however, that the group is looking to deepen its relationship with INTCOMEX, the Miami-based technology services and products business that is said to serve some 41 markets with operations in 14 countries in Latin America from Chile in South America to Mexico on the Central American mainland.
ICD Group has more than US$10 million invested and holds a 28 per cent stake in INTCOMEX, which just built a major state-of-the-art warehousing facility in Chile as it seeks to expand business there.
“More and more Jamaican companies are having the confidence to enter overseas markets and are willing to learn those businesses. We are on a learning curve for sure, but that to me, this is where Jamaica will start to see some of the growth because when you go outside, those profits will come back here and reinvest,” Melhado explains the rationale for pursuing more business opportunities overseas.
INTCOMEX, which started in 1989 as a small software company, has grown into a major business throughout Latin America and is marketed as a multinational platform of value-added solutions and technology products.
Its divisions include security, point of sale, accessories and retail services, computers, portability, networking, software, gaming, printing, consumables, electronics, mobile and cloud technology solutions.
The Jamaican investment holding company, of which Joseph M. Matalon is chairman, is also scaling up its involvement in the business process outsourcing sector. It is doing so, not with more BPO facilities in Jamaica at this time, but with plans to buy into an operation in the United States.
“We originally bought into a Canadian operation and then we created a nearshore operation here in Jamaica – Advantage Communications. Now we are looking at other opportunities in the North American space,” Melhado said, without providing details. He also could not say whether the American BPO acquisition is likely to result in more of its business coming to Jamaica at a later stage.
As part of its BPO operations to serve a wider American and international market, ICD is looking to acquire Spanish language capabilities: “Most US businesses that you are serving today need Spanish – especially in places like California, Texas and Ohio, which are hugely Latin. So, we are looking at acquiring entities that have that capability. That will see us operating more outside of Jamaica. It gives us an opportunity to give clients options.”
He explains that global clients of Advantage Communications have been increasing the share of business functions they outsource to the Jamaican operations as they see the cost benefits and results produced by a talented Jamaican workforce.
“We have seen companies we started with and they said ‘there’s no way we are going to offshore more than 20 per cent of our business’, and then with the service delivery from Jamaica, we are 50:50 after being 20:80 or 10:90,” Melhado points out.
The ICD CEO notes that with the aid of technology today businesses can scale without a large amount of capital. “We are bullish about investing in this environment,” he says.
ICD Group is invested in several e-commerce type, technology-related firms, including a substantial minority interest in Social Media Group, headquartered in Puerto Rico. ICD holds about 35 per cent of the parent company and 45 per cent of Social Group’s subsidiary, Gustazos, an online shopping business that provides deals for the purchase of meals, vacations, etc.
The group is also a minority partner in Amber Connect, a tech company which sells a vehicle-tracking and security solution.
The investment holding company is also involved in the insurance business through its ownership of British Caribbean Insurance Company, or BCIC; and in construction and property management through West Indies Home Contractors and WIHCON Properties. WIHCON is currently involved in building out several large housing projects, including the Lofts near the National Stadium in Kingston, 90 units at Hellshire in St Catherine for the National Housing Trust, and the 2,600-unit Estuary development in Montego Bay.