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UNITED BASALT PRODUCTS www.ubpgroup.com
C O R P O R AT E B R O C H U R E
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diversity Extending its reach along the construction value chain has been central to the success of Mauritius-based industrial group United Basalt Products. Julia Smith traces the group’s evolution
T
he Republic of Mauritius is located about 1,000 kilometres east of Madagascar, deep in the Indian Ocean. The name has become iconic—redolent of spices and sunsets, palm-clad beaches and coral gardens, Mauritius has become one of the planet’s ultimate destinations for those in search of off-beat exoticism and the high end of alternative lifestyles.
United Basalt Products
United Basalt Products
Before the crisis led to an inevitable slowdown, Mauritius was a favourite media hotspot. The New York Times cited it as one of the “53 Places to Go in 2008”; Time magazine praised the republic’s economic strength; and the Daily Telegraph asked of its readers, “Who needs the Caribbean when you can buy in Mauritius?” Not surprisingly, the islands that constitute Mauritius witnessed a spectacular construction boom in the first decade of this century. Not only were they a sought-after tourist destination and a retreat for the super-rich, but they also offered an extremely stable economy. Mauritius became independent in the 1960s and a combination of excellent tax breaks, no exchange controls and a convertible currency quickly attracted a stream of wealthy investors seeking upmarket residential accommodation. United Basalt Products (UBP) was an early entrant to the boom that the construction sector witnessed.
and capitalise on long-held local connections, the group moved into direct retailing in 2002. Espace Maison & Jardin started with the opening of its first shop in the Trianon shopping park. Since then, the company has opened three more showrooms under the same name and demonstrated an adept grasp of marketing and branding—a skill entirely different from crushing stones. The stores now offer more than 25,000 distinct product lines, divided between cladding, sanitary, construction, hardware, wood, tools, electrics, garden or decoration. “Our stores have become more and more popular. They have become a must with those who love DIY and gardening and to meet demand we are currently building a fourth store at Flacq which is scheduled to open in October,” said Giraud to journalists earlier in the year. And for those who are not so keen on DIY, a contracting arm of the company will take care of all the bothersome
“United Basalt Products was an early entrant to the boom that the construction sector witnessed” The company was established in 1953 and its principal activity from the outset was the manufacture and sale of building materials. The company went on to become became listed on the Mauritius stock exchange in 1989 and is today controlled by a shareholder-nominated board of directors led by managing director Jean-Michel Giraud. The mineral industry of Mauritius is small; but the island’s geology has left generous deposits of basalt, a fundamental building block for the construction industry. UBP Group has 10 aggregate production units and distribution centres located all over Mauritius, including two associated companies under the same management. The four key operational subsidiaries are Ste Marie Crushing Plant Ltd; Welcome Industries Ltd in Rodrigues; UBP Tana SARL in Madagascar; and United Granite Products Ltd in Sri Lanka. The main products the company manufactures are building commodities and include hollow concrete bricks, aggregates, rock sand, prestressed concrete slabs, paving blocks, rustic paving, roof tiles and concrete pipes. In a logical move to progress up the value chain
installation details. To supplement local production, the group began importing ceramic tiles, marble and sanitary building materials to complement its core offering in 2005. These are distributed by a separate subsidiary, Marbella Espace Maison Ltée. Most recently, the group has moved into cement—a commodity, but a particularly valuable one, as local production is limited. UBP shares gained five per cent earlier in the year after the group said it would increase its stake and buy additional shares in an associate group, Pre-Mixed Concrete. The move, which was welcomed by analysts, saw UBP increase its shareholding in Pre-Mixed Concrete from 30 per cent to 49 per cent. The prefect complement, one could say, for another subsidiary—Dry Mixed products, which is a specialist in dry mortar, primer fix, plaster fix and screed fix. Despite the inevitable slowdown in the sector, UBP Group still managed to increase profits in the operating year 2008 to 2009, from MUR162 million to MUR231 million. Giraud is optimistic that the group is ready to take advantage of recovery when it comes and the Mauritian government has introduced
United Basalt Products
Scomat Ltée Scomat Ltée is, since the creation of United Basalt Products, a core business partner through the supply of the latest Caterpillar products and related services. Its large specialised workshop with its continually trained
personnel
ensures
components
and
machines repairs with professionalism. Scomat also has a fleet of service trucks which provides maintenance services on site and after hours to increase the productivity of UBP. Parts availability is the cornerstone of Scomat product support through its large stock and rapid availability of emergency parts which reduces downtime. Scomat is a key supplier of Caterpillar machines, generators and IVECO trucks in Mauritius.
a number of measures to make sure this happens. Critically, the government has launched a MUR10.4 billion fiscal stimulus package which includes measures such as removing the requirement that land should have been purchased five years in advance before being used for development and subjecting many new villas to the minimum duty of US$70,000 until December 31, 2010. New purchasers can also now have payments of land transfer tax deducted from their income tax. Meanwhile, Giraud is particularly proud to be associated with the project Maurice Ile Durable. This is a long term sustainability plan aimed at making Mauritius less dependent on imported fossil fuels, which offers a long term vision for sustainability and a focus on renewable energy sources. Two hotels—le Trou aux Biches et le Coco Beach—have already been constructed from recycled materials as well as a number of residential dwellings built by the group. In another initiative—the group has also become a property developer in its own right—the objective has been to provide quality homes for local people, ensuring that the Mauritian people are not priced out of the housing market. All in all, it adds up to a diverse and complex offering, but UBP Group’s financial results last year show that it is a strategy that makes sense. http://www.ubpgroup.com
UNITED BASALT PRODUCTS www.ubpgroup.com