Superior Strength and Managed Growth
Once completed, the previously announced acquisition of Richard Y Lange S.A. de C.V by Grupo International Inc. will increase its asset base by over $5,000,000. This strategic acquisition is the first of several that will provide the Company with the necessary asset base to expand in all of its markets using its superior financial strength.
Managed growth has commenced with the launch of the RiMart Stores Division of the Company. Each store is a low tech, profitable “hard goods” store that can penetrate markets throughout Mexico and other Latin American countries. Despite the presence of Home Depot, domestic franchises featuring hardware, tools and order centers are virtually unknown in Mexico until now.
Like Sears, Company stores and franchises will also feature a RiMart Credit Card at every location for additional profit
The Division will be comprised of both company-owned facilities and franchises to maximize area saturation. The company-owned stores act as an area anchor surrounded by franchises and become a control mechanism for any given area. First year store sales have been averaging $480,000 with incremental growth projected at 15% annually per location. Profit margins are projected to be 20% pre-tax per location.
The Division has grown from two stores to 20 in the last five months and the Company projects over 50 locations at the end of the first year of operation and over 200 at the end of the second year.
Interest in franchise opportunities increased with each opening principally because of the $100,000 cost of which 50% can be financed. The company is also developing a Master – Franchise opportunity as well. No details or projections are available currently.
The Construction Division was awarded a 2.5 million dollar contract for the construction of the first phase of the Cicsa Mine operation for “Grupo Carso” in Northern Baja. Grupo Carso is owned by Mr. Carlos Slim – one of the wealthiest men in Mexico and the world. This award has triggered multiple inquiries from other mining and related businesses.
The Construction Division projects sales of $12,000,000 in 2011 with profit margins approaching 15%.
The Raw Materials Division performance will be directly tied the demands of the road construction industry. Awards for repair of the highway system repay the Company for its effort. The Company’s Tecate operation will allow the shipment of $6,000,000+ in revenues each year for the years to come while sand deposits of competitors in Southern California are near depletion and permits are very difficult to obtain. The Company expects to start shipping product in the third quarter of the year.
With the recent successes, Company has been reluctant to project total revenues and profits.