Arel targets US$30-m imaging equipment supply
Jamaica
Kingston-based engineering and contracting firm Arel Limited has set its sights firmly on being selected as a preferred supplier for billions of dollars worth of imaging equipment to the nation’s hospitals.
The company, which supplies imaging equipment such as computerised tomography (CT) scan machines, magnetic resonance imaging (MRI) machines, X-ray machines and ultrasound machines, did a study assessing the needs of the country’s hospitals as a first step to securing a supplier contract. Arel is Jamaica’s representative for GE Healthcare equipment.
“In terms of equipment, we are talking about the order of over US$30 million worth of equipment that are needed now,” Earl Spence, director of medical sales and services at Arel Limited, told the Jamaica Observer in an interview. Spence said the estimate is for more than 40 pieces of imaging equipment desperately needed for the nation’s hospitals.
“We know exactly what are in those hospitals, because we would have supplied them,” Patricia Henry, CEO of Arel Limited, highlighted. Henry has been in that role since December.
While Arel did the study to determine the equipment needs for Jamaica’s hospitals, it however was not offered a sole source contract with the Government opening up the possibility of supplying the sector to other contractors as well.
“A tender is out to supply the hospitals with equipment, maybe through a public private partnership, and we are going to bid, but it is really our project that we brought to the table,” Henry emphasised.
Spence said this would be the first time since preparations were being made for the hosting of Cricket World Cup 2007 that any new equipment on the scale of what is being proposed now was bought by Government.
However, he said with general practitioners requesting more and more imaging services for their patients, the need for the equipment is growing each year.
“The problem is that some of these machines need special siting, especially the MRI or a CT scan machine. We would need a room to put them in, and those rooms don’t exist at some hospitals,” Spence continued. He said a solution has been proposed to get over that hurdle.
“You have hospitals out there, like Lionel Town and Spalding and Morant Bay, which have very minimal imaging equipment, and then you have Mandeville, May Pen, Cornwall Regional and KPH, etc, where the needs are different,” he pointed out. Getting imaging machines in more places would not only help to relieve pressure on the limited ones now available, but would also minimise the need for patients to be transferred to another facility to get the imaging done. He said a proposal was also made for the Bustamante Hospital for Children in St Andrew to be equipped with a CT machine.
Still, despite the need, getting the equipment requires money and the Government has been exploring at least two possibilities, buying them outright or renting the equipment from suppliers.
“We could buy the equipment and rent the Government, so we would get rental income flowing in. Also, being that we are associated with Eppley [an investment company], we can get funding from that company to buy the equipment to rent the Government,” Henry said, indicating that talks suggest the equipment will be acquired in phases.
“We have a contract to supply six X-ray machines to the South East Regional Health Authority (SERHA),” Spence told the Business Observer. He said three are for the Kingston Public Hospital, while the National Chest Hospital, Bustamante Hospital for Children, and the Spanish Town Hospital will receive one each.
Still, the diversified engineering company has its sights on growth outside of supplying hospitals with equipment. In October last year, the Musson Group and Productive Business Solutions (PBS), along with other equity shareholders including Henry, invested in the company. While it is not clear how much all invested, PBS’s financial statements for 2022 showed it acquired roughly 17 per cent of Arel for a consideration of US$246,000. At that investment amount, the valuation is US$1,441,378.10 for the overall company.
“My mandate is to increase revenues 20 per cent to 25 per cent this year,” Henry told the Business Observer. The company’s revenues are “generally in the vicinity of $1.2 billion per year”. As for profitability, it has been “on and off”.
So far, Arel has been working on various projects to date and has signed contracts to execute others, including supplying elevator and electrical services to two buildings that are under construction for use in the business process outsourcing (BPO) sector, and a contract with Kingston Wharves. It also has the contract to supply the Cornwall Regional Hospital (CRH), which has been undergoing a lengthy renovation, with air conditioning.
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