The sad news this week that
Hadsphaltic Ltd. has gone into liquidation marks the end of an era.
The construction company operated
in the Cayman Islands for some 44 years, pretty much from the start of Cayman’s
building boom. Hadsphaltic left its mark on the country, building many of Cayman’s
hotels, schools and office buildings. For years, ‘Hads’ was one of what was
called the Big Three construction companies, along with McAlpine and Arch &
Godfrey. Now it is gone, a victim of the tough economic times in which we live.
The fact a major construction
company here went out of business shouldn’t shock anyone. The reduced level of
construction activity in Cayman simply cannot sustain the number of companies
here. Many more construction companies have entered Cayman’s market over the
past decade and competed with the Big Three for projects, reducing profit
margins in the industry. A company can only survive on its reputation for so
long and ultimately efficiencies through innovation and good management come
The scariest part of Hadsphaltic’s
demise is that its absence doesn’t necessarily mean Cayman’s other construction
companies will do noticeably better. Unlike the situation where Señor Frog’s
closing meant an immediate boost for Margaritaville, there isn’t a reliable
amount of existing construction business like there is cruise ship visitors to
visit downtown restaurants. With Cayman’s population contracting at an alarming
rate and prospects for the future of Cayman’s financial industry uncertain,
major developers are in no hurry to commit to building large projects.
The world’s economies have
experienced a paradigm shift as a result of this economic downturn. Those who
think Cayman can go on without major changes to the way things were – and are
still – are fooling themselves. If this country is going to remain successful,
significant changes must be made, starting with how to reverse the alarming
contraction of Cayman’s population.
Residents who are complaining about the increases in fuel tax, import
duties, planning fees and various business taxes need to understand that unless
Cayman’s population grows, those fees and others will only go up and more and
more companies will go out of business.