Construction of Jamaica's second cement-production plant is expected to begin within the next three months if Canadian engineering firm Cemcorp gets the approval of the National Environment and Planning Agency (NEPA), the Ministry of Energy and Mining and the parish councils of St Catherine and Clarendon.
Cemcorp's chief executive officer, Armand Nahmiache, who is in the island undertaking preparatory work for the construction project, said the approval process was far advanced and expects to break ground within 90 days.
Nahmiache, in an interview with the Financial Gleaner last week, said financing is already in place for the proposed US$340 million, 1.5-million tonne capacity plant to be built at Port Esquivel in St Catherine, and which will operate under the name Cement Jamaica Limited.
He said the new cement company was intended to serve the Caribbean as a whole. "The Caribbean is controlled by one or two companies," he said, adding that "we are of the view that there is room for another player."
Large client base
Trinidad Cement Limited and its Rockfort, Kingston-based subsidiary, Caribbean Cement Company, are the dominant players in the market.
Nahmiache said the regional markets apart, Cemcorp has a large client base, including high-end users of the commodity in Canada, which provides a guaranteed market for about 75 per cent of the approximately 900,000 tonnes of cement the company expects to produce annually at start-up.
The remaining 25 per cent, or 225,000 tonnes of cement, which the company intends to distribute in Jamaica, represents around 25-27 per cent of the total local distributive trade, which combines the activities of market-share leader and producer Caribbean Cement Company, as well as importers Tank-Weld Metals, Buying House and Arc Systems.
"That is why we have an interest in only 25 per cent of the local market," he said. "We have no interest in a tussle for local market share, but one must realise that whether in the (wider) Caribbean market or in Jamaica, competition is good for any economy."
Nahmiache's business relationship with Jamaica dates back to December 1999 when he brought in 15,000 tonnes of cement produced in Russia to test the local market. Whereas that project did well, the Moroccan-born businessman would not return to Jamaica until 2006 when he forged a partnership with St Ann-based Lydford Mining Company Limited to construct a cement plant in St Ann, but strong resistance from tourism and cruise shipping interests on the north coast discouraged any plans for further business.
"The south coast worked out even better for us because Jamaica has the best raw material for making cement and the limestone located on the south coast is the best in the world," said Nahmiache, adding that "our laboratories in Canada and Beijing can attest to that".
Own power
In addition, he said, "our engineers have figured a way of using your tailings (waste from processed bauxite) as part of our mix for our raw material. So, our mix will include clay, iron and calcium carbonate." Limestone would be sourced from Cemcorp's own quarrying operations at Rose Hall, Clarendon, while gypsum would come from Caribbean Cement Company's Rockfort facility.
Noting the high costs of energy in Jamaica and the crippling effect it could have on manufacturing, Nahmiache said the company's intention was to keep costs down by generating its own power. Consequently, energy supply for Cement Jamaica would come from a 54 megawatt clean-coal power plant the company expects to set up at Port Esquivel, with the likelihood that any surplus generated would be sold to the Jamaica Public Service Company (JPSCo).
"Our cement plant will require about 35 to 39 megawatt to run so we might be supplying the extras back to JPSCo or building ancillary plants that are high-power consumption, such as steel plants."
For the CemCorp boss, the best time to start such an operation is now given that the global economy is showing signs of recovery amid the expected increase in the demand for infrastructure and housing.
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