JAMAICA: Caribbean Cement Offers Discount On Cash Purchases

Caribbean Cement Company Limited said Tuesday that it will give a 1.5 per cent discount to cash purchases on cement.

It is additional to the 0.5 per cent discount implemented since last October, the company said.

Caribbean Cement cited the 20-month inflation of 7.13 per cent as a signal that it was offering savings to its customers. However, 12-month inflation has been tracking below four per cent since April 2015, and is currently at 3.7 per cent, according to data released last week by STATIN on price adjustments in January. Additionally, prices deflated in the month of January by 0.4 per cent.

"We commit to continue our drive, which started twelve months ago, to put significant resources and efforts towards the further improvement of our efficiencies and competitiveness," said the company's release. This has allowed us to offer this additional discount to our customer base."

The price of cement otherwise remains unchanged. Credit purchases will not attract the discount.

"In addition, customers purchasing from our depots will pay a portion of the costs for freight. These partial freight costs are subject to change, and they are dependent on factors such as oil prices and the depreciation of the Jamaican dollar," said Caribbean Cement.

JAMAICA: Caribbean Cement Reclaims Market With Tank-Weld Deal

Caribbean Cement Company Limited (CCCL) has recornered most of the cement market, having struck a deal with Tank-Weld Metals that sees the construction materials company exiting imports and signing up instead as a distribution agent for the local cement maker.

Tank-Weld will distribute Carib Cement's product from its cement bagging plant at Rio Bueno in Trelawny.

The Bicknell-controlled company was the last major holdout in cement imports that at one time had taken over about 15 to 20 per cent of the market that Caribbean Cement once monopolised. Caribbean Cement's share of the domestic market last year was just under 83 per cent, according to Wednesday Business calculation of industry data.

The room for competitors opened around 2005 when the company had placed faulty cement on the market and the Jamaican Government created space for importers while the local producer improved its processes.

Caribbean Cement began reclaiming the market in 2013 when it struck a deal with Arc Systems, which sells the product under its own brand, ArcPlus. At the time, Caribbean Cement said it had reclaimed eight per cent of the market through the arrangement.

Efforts to determine the size of the import market now through the Trade Board and Jamaica Customs Agency were unsuccessful, but at least one player remains - Buying House, the distributor of Anchor cement.

Tank-Weld, which in the past competed against Caribbean Cement with imports from the United States, started distribution for Jamaica's sole manufacturer of the product in October and has so far moved two shipments, Chief Executive Officer Christopher Bicknell told Wednesday Business.

As a result of the agreement, Tank-Weld no longer imports cement, Bicknell said. The company previously had an arrangement with Vulcan Materials of Alabama, United States, to distribute its bagged cement in Jamaica.

That arrangement caused conflict with Caribbean Cement and resulted in a complaint by the monopoly manufacturer to Jamaica's Anti-Dumping and Subsidies Commission (ADSC).

In 2010, the ADSC determined that the importation of Portland Blast blended cement, made by Vulcan Materials, was not a threat to the local industry, giving the green light to Tank-Weld Metals to continue selling the product locally.

Caribbean Cement had won previous anti-dumping cases, after which the Jamaican Government slapped heavy duties on cement imported from Indonesia, Thailand and China.

Vulcan Materials was sold last year, but Bicknell said those developments had nothing to do with its new arrangement with Caribbean Cement.

"The real issue wasn't anything to do with that. It was that the Government quotas were restrictive and went contrary to any agreement, because you would have to live under the quota system," said Bicknell. "It was more prudent for Tank-Weld to secure a more solid agreement domestically, hence the reason for the agreement with Carib Cement."

STORAGE IN TRELAWNY

Tank-Weld's facility in Trelawny will now be used to store Carib Cement for distribution, which will be transported via the coastline from Rockfort to Rio Bueno and will enter the plant already bagged.

"The most critical aspect for Tank-Weld was the continued utilisation of the Rio Bueno port and facility, which is a key component of the agreement," he said.

"This agreement will also have social and environmental benefits, as the use of maritime freight will see less wear and tear on the roads, less frustration for the travelling public, and less pollution in the air, through the reduction in traversing across the island by road of bulky and heavy cargo," said a joint statement by both companies that was issued after Wednesday Business reached out for comment on their distribution pact.

"Both companies believe that this agreement will benefit the Jamaican consumer as well as the local economy, as it increases the domestic production of cement, therefore, yielding greater production efficiencies, increasing use of assets, boosting the local market and using more indigenous resources," it said.

Last year, Caribbean Cement sold 598,165 tonnes of cement inside Jamaica in a market where locally made and imported supplies of the commodity totalled 721,987 tonnes.

Caribbean Cement's overall volume sales that year - domestic and exports - amounted to 830,931 tonnes, or more than 4,000 tonnes better than the previous year.

The trajectory into 2015 has shifted somewhat. At half-year to June, volume sales were tracking at around 10 per cent behind the 2014 period.

JAMAICA: Caribbean Cement Scores $1.48b Of Profit

In a robust third quarter for Caribbean Cement Company, the commodity producer reported an eightfold growth at the bottom line to $617 million that was fuelled by stronger sales and lower production costs, as well as a more manageable debt load.

In the nine-month period, the cement maker made $1.48 billion of profit off turnover of close to $12 billion. Last year, the company reported a profit of $25 million.

Caribbean Cement, which is now being run by a Cemex-backed manager, Alejandro Vares, did not disclose the actual volume sales of cement and clinker in the periods under review, as it has traditionally done with other quarterly earnings reports. Instead, the company focused on sales performance.

"Domestic sales volume for the third quarter exceeded the corresponding period in 2014 by 22 per cent, and for the nine-month period was 9 per cent above the volumes in 2014," said Chairman Christopher Dehring and director/TCL Group CEO JosÈ Luis Seijo Gonzalez in the director's statement attached to the financial results.

REVENUE GROWTH

Revenues grew by close to three-quarters of a billion dollars in the quarter to $4.2 billion, and by just over a billion dollars year to date to $11.76 billion. This performance puts the cement company on track to better the $14 billion of record sales revenue recorded in 2014.

Caribbean Cement also reported a 73 per cent reduction in interest charges for the quarter "as a result of the company's financial restructuring initiative, resulting in some prepayments of long-term debt in excess of $800 million," the directors said.

The debt rescheduling happened under a group-wide programme through which parent company Trinidad Cement Limited restructured its balance sheet to shed debt and boost equity. That programme also doubled Cemex's ownership of TCL, with a stake that is just shy of 40 per cent.

Cemex executive Vares was named general manager of Caribbean Cement in May, replacing Anthony Haynes.

The Rockfort, Kingston-based company remains $4.2 billion in debt, while its equity base has grown to $6.4 billion, compared to $4.8 billion a year ago.

JAMAICA: Caribbean Cement Lands Big Contracts

Caribbean Cement Company Limited (CCCL) has secured a deal to supply cement for use in stabilisation of a 46-kilometre stretch of the north-south leg of Highway 2000, which is currently under construction.

The local cement manufacturer is also on board projects that will see 640 hotel rooms being built by BahÌa PrÌncipe and 460 rooms for student accommodations being constructed at the University of the West Indies.

"We believe we have passed the rougher times," said recently appointed general manager, Alejandro Vares, at Caribbean Cement's annual general meeting on Tuesday.

"We are now on a path to improve profitability on a sustainable basis," he told shareholders.

Indeed, 2014 was the first full financial year in which the cement maker posted a profit after five years of drought - it racked up more than $8 billion in losses from 2009 to 2013. Moreover, earnings for the first three months of 2015 totalled $248 million, compared with $35 million in the corresponding quarter last year.

Export Market

This year's performance is expected to be supported by four per cent growth in the domestic cement market in 2015 and a second clinker supply deal to Venezuela, which runs to November. The contract requires the company to ship 240,000 tonnes of the cement input, compared with 100,000 tonnes in the first supply deal under the PetroCaribe Trade Mechanism.

Caribbean Cement also started 2015 with its products carrying an average price that is 7.5 per cent higher than it was at the beginning of last year - after three price increases in the first half of 2014 - while energy prices have slumped from year-earlier levels.

Still, the cement maker is sitting on unused capacity that it has been unable to utilise due to stagnant demand for cement, costly production, and a limited range of products.

Even with record production of clinker last year, it still had 40 per cent of its kiln capacity unutilised - just over 40 per cent of the company's cement milling capacity is being used.

Vares, who took over management of the company from Anthony Haynes in May, reckons that improving operational efficiency and lowering production cost, and, consequently, the price to consumers, can make CCCL's cement competitive enough for the export market, which could easily eat up the local manufacturer's unused capacity.

He hopes to increase kiln efficiency from 78 per cent in 2014 to 85 per cent this year to more than 90 per cent next year.

Lower prices on the existing products it makes could also squeeze out imported cement.

But Caribbean Cement also has to go after new markets. It is currently analysing the feasibility of exporting gypsum, according to Vares. The company has already lab tested a sulphate-resistant cement that is particularly useful in the development of seaports as the product is better at withstanding the effects of the ocean.

The cement maker's own ports, such as the Jamaica Gypsum & Quarries' pier, which was dredged last September to permit loading of 25,000-tonne shipments of clinker, also presents an opportunity for Caribbean Cement to explore handling other companies' shipments.

"We are talking with a few companies, but I am not authorised to discuss details at this time," said Vares regarding Caribbean Cement's flirtation with renting the capacity of its ports.

JAMAICA: Caribbean Cement Revenue, Profit Soar As Parent TCL Falters

Caribbean Cement Company Limited emerged unscathed from the board takeover that rocked its parent last summer, to produce annual pretax profits of $255 million compared to a loss of $3 million the previous year.

Its performance was assisted by a new record year for sales for the Rockfort, Kingston-based operation, which climbed from $12 billion to $14.3 billion at year end December 2014.

Domestic cement sales volumes grew by only one per cent to 594,164, while cement exports inched up to 232,765 tonnes. Clinker exports, however, quintupled to 155,423 tonnes because of a supply agreement with Venezuela.

Over in Claxton Bay, the home base of Trinidad Cement Limited, the group also reported an overall climb in revenue from TT$1.93 billion to TT$2.1 billion, which TCL described as a record for the company. The cement producer also reported a narrow EBITDA gain from TT$407.7 million to TT$407.8 million.

However, it also booked a TT$153 million for losses linked to subsidiary Arawak Cement Company Limited, which served to cut operating profit for the year to TT$116 million, from TT$276 million the previous year.

Losses after taxes were more than TT$205 million on continuing operations, rising to TT$211 million when the discontinued operations of lossmaker Premix & Precast Concrete Inc of Barbados are taken into account.

The results wiped out the TT$67 million of profit after tax credits that TCL reported in 2013.

"Despite that increase in the sales, EBITDA didn't increase because there were some extraordinary items that affected the results," said acting chief executive and board director, Alejandro Ramirez.

Indebted

Extraordinary expenses totalled TT$57 million and included the impairment of weather-damaged clinker that was stored outside Arawak Cement Company for several years, as well as back payments to unionised staff and legal costs, he said.

Trinidad Cement remains heavily indebted but its liabilities were largely flat at the end of 2014, at TT$2.76 billion, the majority $2.38 billion of which is due in the short term - a return to its pre-2012 status after the new Wilfred Espinet-led TCL board threw out the debt-restructuring plan that had been negotiated by the old board.

TCL is working out a new agreement with creditors and also plans to raise fresh capital of about TT$50 million from a rights issue that will open to shareholders on March 6, as it restructures its balance sheet.

Minority partner Cemex will underwrite US$45 million of the offer in exchange for a larger stake in TCL. Under the agreement, Cemex's current 20 per cent holdings will grow to between 35 and 40 per cent.

Jamaica's debt saw an uptick in the year to TT$4.89 billion, of which TT$3.8 billion is due in the short term.

The Rockfort operation reported that under the old group debt-restructuring programme, it booked a credit of $591 million in 2013 regarding withholding taxes associated with the operating lease paid to parent TCL.

Caribbean Cement, which is now chaired by Christopher Dehring, reported that in 2014 it reduced its finance charges by more than $800 million.

At the bottom line, the company made after-tax profit of $138 million compared to $114 million after tax credits in 2013.

JAMAICA: Carib Cement - Says Cement Is Better Than Asphalt

The Caribbean Cement Company Limited is seeking to improve take-up of cement for use in the construction of roads, with plans to double sales in this market this year.

While revenue earned to date, J$17 million, is relatively small from a limited number of projects done, Anthony Haynes, managing director of Carib Cement, said that with cement roads lasting twice as long as asphalt surfaces, project managers and the Government may soon see the advantage of switching to the sturdier material.

Demand is also increasing from private companies Haynes said. "The cement-based roads, which are more durable and have a substantially lower life-cycle cost, are being implemented at various companies' roadway entrances and parking lots in place of asphalt surfaces so as to lower maintenance costs."

Haynes, in response to Sunday Business queries, said that since 2011, approximately 1,845 metres of concrete pavement have been constructed locally. This translates to approximately J$17 million of cement at today's value. Some projects have also been done in the Eastern Caribbean and Carib Cement is also targeting improved sales in that region.

"We do not have the exact data for all the cement used in road construction in countries we export to. However, we are aware of several concrete roads that have been done in St Lucia, St Kitts and Belize," Haynes said.

He admitted that, generally, the cost of a concrete pavement when compared to an equivalent asphaltic surface can be approximately 10 per cent higher. "However, the life-cycle cost of concrete pavements over 20 years is significantly less than the life-cycle cost of an asphaltic pavement - as much as 200 per cent less," he said.

Haynes is projecting a doubling of revenue for the current year from the construction of roads."We would want to increase this business to a minimum of 2,000 metres of concrete roadway per annum. This would translate into an additional J$17 in revenue per annum."

He noted that "Last year, we've had a lot of buy-in from the private sector. For example, the Jamaica Social Investment Fund has installed concrete roads at one of their projects in Flankers, Montego Bay, and they have found it more economical to do so. We've even had cinema owners in Kingston who, instead of using asphalt pavements, are making plans to use concrete."

BENEFITS OF CONCRETE

Carib Cement said the benefits of concrete roadways include resistance to erosion from torrential rains and a longer pavement life, "more than three times that of an asphalt roadway."

In research material provided, Carib Cement said that "concrete roads are also more environmentally friendly. Whereas asphalt roads produce more heat and harmful greenhouse gases, and tend to leach into limestone, cement-based roadways do not. Also, at the end of the concrete road's life cycle, its components can be recycled and used to make aggregate. Concrete roads have a reduced urban heat effect."

It added that "concrete's light-textured nature also allows for less petroleum usage since it requires about 30 per cent less power to illuminate the roadways with adequate street lighting. Other benefits include longer tyre life and less fuel usage for drivers, as well as a shorter and safer braking distance."

JAMAICA: Government Pays US$1.6M to Carib Cement for Clinker

The Government has handed over a cheque valued at US$1.69 million to Carib Cement Company Limited as part payment for the provision of clinker to Venezuela, facilitated under the Trade Compensation Mechanism of the PetroCaribe Agreement.

The initiative, which commenced in December last year, and is expected to last until May, will see Jamaica supplying Venezuela with some 100,000 tonnes of clinker, valued at approximately US$8.5 million, for the latter’s utilization in the production of cement.

Minister of Finance and the Public Service, Dr. the Hon. Peter Phillips, handed over the cheque to Chairman, Carib Cement Company Limited, Brian Young, during a ceremony at his Heroes Circle offices on Tuesday morning, January 21.

The arrangement facilitates the government’s repayment of a portion of its oil debt to Venezuela, which currently stands at approximately US$2.5 billion, with locally produced goods and services in lieu of cash, under the PetroCaribe Agreement.

Dr. Phillips said the arrangement was quite significant, as it represents the first time the Government has utilised the provision under the PetroCaribe Agreement for payment to be made by way of supplying commodities to Venezuela, thereby reducing the country’s debt obligations.

He said the agreement was indeed a “win-win” situation for everyone involved.

“Venezuela has benefited from the supply of materials that they need, while Jamaica and Carib Cement have benefited tremendously, by pioneering an additional market for their product, which employs Jamaican workers in producing it and helps expand overall production in the country. And for the PetroCaribe Fund, we are able to reduce our level of debt, and at the same time, facilitate productive activity in Jamaica,” he stated.

The Finance Minister also urged other Jamaican companies to pay close attention to the arrangement, noting that it provides an opportunity for them to identify markets on a sustained basis.

“The PetroCaribe Fund represents a long-term obligation for Jamaica. We repay in excess of US$100 million each year, under the agreement. It’s possible, therefore, for companies who can identify Venezuela, and importers, who can engage in the appropriate arrangements, to supply those commodities from Jamaica.

They’ll be able to expand their own productive activity here in Jamaica, pioneer the development of long-term export arrangements, and assist Jamaica in repaying, in kind, the obligations, which we have under the PetroCaribe Agreement,” Dr. Phillips remarked.

For his part, Mr. Young said the receipt of the cheque represented a third significant milestone under the joint initiative.

The first two, he said, were the securing of the contract and the departure of the first shipment of clinker to Venezuela.

“The fourth milestone that I have on the horizon is that when we have completed the supply of the 100,000 tonnes of clinker, which should take place over the next five months, that we’re able to secure a new contract for further supply,” he stated.

Meanwhile, Chief Executive Officer (CEO) of the PetroCaribe Fund, Dr. Wesley Hughes, said one of the important things about this initiative is that it provides a template that other companies can follow in exporting goods to Venezuela.

“So we don’t have to go through this elaborate learning curve that we just completed. And there are long term opportunities for other companies and we at the PetroCaribe Fund are putting ourselves in a position to give as much help as possible,” he stated.

Clinker is used in the intermediate stage of cement production, and accounts for approximately 95 per cent of the material used to manufacture Portland cement, one of the more common types of this construction input.

JAMAICA: First shipment of clinker sent to Venezuela under Petrocaribe initiative

CARIBBEAN Cement Company will send its first clinker shipment to Venezuela tomorrow, as part of an agreement to supply 100,000 tonnes of the product over five months to the South American country.

Clinker, the intermediate product made in cement manufacturing, will be supplied to Pertigalete Venezuela. The US$8.5-million deal was facilitated under the compensation mechanism of the PetroCaribe Agreement, whereby the Government of Jamaica can service a loan of over US$2.4 billion from the South American country with exports.

After three years of negotiations between the cement company and the Governments of Jamaica and Venezuela, the firm will export 20,000 tonnes of clinker per month between December and April next year.

"This arrangement will afford the opportunity to pre- utilise our clinker manufacturing plant, improve our financial performance and bolster our sustainability as an iconic Jamaican institution," said Anthony Haynes, general manager of Carib Cement.

He said the company plans to continue negotiations to supply the product.

"We hope that this shipment represents the first of a sustainable agreement where we can supply products to Venezuela," he said in his remarks at the press conference to commemorate the first shipment at the Jamaica Gypsum and Quarries Pier yesterday.

Jamaica's total debt to Venezuela is about US$2.5 billion while the annual debt payment currently is about US$100 million per annum. So US$8.5 million is about eight per cent for the annual payment, said Wesley Hughes, CEO of the PetroCaribe Development Fund.

"We expect that this is just the first of many; if we have $20 million per annum from one company we can see that this is significant," he said.

The country has the potential to export up to US$100 million in products to Venezuela.

Carib Cement posted a net profit of $168.9 million for the third quarter ending September 30, 2013, compared to a $245-million loss over the same three months last year. The positive result was boosted by increased cement sales volumes in both local and export markets — up 18 per cent and 60 per cent respectively over year earlier levels — contributing to a 52 per cent jump in total revenue to $3.2 billion.

JAMAICA: Debt payment forces Carib Cement price increase

FACED with a pending debt payment at the end of March, Caribbean Cement Company (Carib) has increased the prices by an average 16.5 per cent.Having already implemented a 9.2 per cent price increase in June, the manufacturer should see close to a $500−million or 21 per cent increase in revenue during the first three months of 2013.But that's if domestic sales over the next three months are the same as the first quarter sales over the last two years, approximately 140,000 tonnes.The new price takes effect on January 7. Carib has been experiencing financial difficulty in recent times and has racked up $5.6 billion in losses over the last three years.It got a break from servicing its debt over a year ago, while its parent — Trinidad Cement Limited (TCL) — completed the restructuring of its debt, which includes some of Carib's liabilities.Under new terms, the servicing of the restructured debt will occur over six years starting with interest in December 2012.Up to now, the local cement maker has been relying on the support of TCL to continue to operate, according to notes in the company's latest financial statements.But the move appears to mean that Carib will now have to do more on its own going forward."While we have sought and obtained a suspension of our debt servicing, this moratorium has come to an end and the enterprise must begin servicing its debt from the end of this month," said Anthony Haynes, Carib's general manager, in a statement issued to the Jamaica Stock Exchange yesterday. "In the current environment, we need to adjust our prices if we are to generate the required cash flows to meet our next debt payment, at the end of March 2013."Prices for its flagship product — packaged Carib Plus — will be increased by 15.4 per cent, but other products will see higher increases, which resulted in a weighted average increase of 16.5 per cent.Haynes said that Carib's prices have been the lowest among cement manufacturers in Mexico, Colombia and the Dominican Republic, which are the major producers in this region, and sister companies operated by TCL in Trinidad and Barbados."I wish to assure you that this adjustment is reasonable and it is the minimum that we must make to avoid defaulting on our upcoming commitments," he said.The company recently reported a modest operating profit after nine consecutive quarters of losses.The $15−million operating profit for the three months to September 30 reflected a trend of shrinking losses since December.The price increase in June, in response to escalating energy and other costs, helped the company post higher revenue — $2.1 billion for the three months to September 30 compared to $2 billion during the same period last year.At the same time, the company managed to slash its cost of operations by $630 million, or 24 per cent year over year.Nevertheless, the company posted a net loss of $245 million during the three−month period, compared to $551 million during the three months to September 30, 2011.The company's working capital has declined from $610 million at the end of June to $427 million at the end of September.What's more, its capital base, which was $409 million at the beginning of the year, was negative $1 billion on September 30.

JAMAICA: Cement Price Hiked 9.2%

Caribbean Cement Company Limited has increased the price of bagged cement by 9.2 per cent, but said the ex-factory price will still be among the lowest in five other regional markets.

Effective today, June 1, the ex-factory price of Carib Cement Plus will be increased from J$705 to J$761.91.

The new price is inclusive of the new 16.5 per cent GCT rate.

In a statement to the Jamaica Stock Exchange yesterday, Caribbean Cement advised shareholders that the rebound in sales seen towards the end of last year has not been maintained and the domestic market appears to be going into contraction once again.

At the same time, it said, in the first four months of this year oil prices continued to rise and are up 12 per cent over the end-of-year prices.

"This has translated into nine per cent increase in electricity costs and we are likely to face similar increase in our solid fuel costs when next we order," Caribbean Cement said, adding that "these increases directly impact on mining, manufacturing and distribution costs."

The cement producer said its situation was not very different to other manufacturers in the region, who have also been adjusting their prices in the face of escalating energy and other costs.

It said that even with the increase, the ex-factory price of its product was still the lowest among the manufacturing countries of Mexico, Columbia, the Dominican Republic, Barbados and Trinidad.

Caribbean Cement said the percentage of cement used in home construction varies depending on the house, but it typically accounts for about 10 per cent of building costs and the price increase would add about one per cent to costs.

The increase follows a first-quarter loss of J$625 million and a dip in quarterly domestic sales volumes by 320 tonnes year-over-year.

JAMAICA: Cement Market Shows Signs Of A Turnaround

The cement market rebounded in the third quarter, according to new data from primary supplier and producer Caribbean Cement Company Limited (CCCL), but not enough for its owners to raise their market outlook.

On Thursday, CCCL General Manager Anthony Haynes signalled that a price hike was imminent, citing eroded profit margins.

Caribbean Cement has been exporting increasingly higher volumes of cement, but the September quarter has also seen a rise in sales in its home market by an annualised 14 per cent to 133,961 tonnes.

Caribbean Cement controls about 70-80 per cent of the market. Last year, imports of 197,400 were equivalent to 27 per cent of domestic supplies, according to industry data from the Planning Institute of Jamaica. Domestic cement supplies fell 8.8 per cent overall in the year, the agency said.

"Domestic sales have continued to show a small rebound and the free fall of the market over the last three years appears to be behind us," said CCCL, at the release of its third-quarter financial report.

"While this growth is expected to be maintained, it will be slow and it must also be recognised that several threats to sustained macroeconomic growth remain. As such, we will continue to remain focused on effective cost management, reducing manu-facturing costs, reducing distribution costs and optimising our selling prices."

The latter comment, as well as another by the company that increased production costs "have not yet been addressed through a price correction", signalled an impending price adjustment for cement, which Haynes confirmed.

"The company needs to adjust its prices to recover the increased costs. At the moment, we are engaged in discussions with various stakeholders in this regard," he told the Financial Gleaner.

CCCL's caution is more readily explained by its nine-month results, marked by a lacklustre 0.65 per cent or 2,2670-tonne gain in home market sales to 412,677 tonnes. Exports, meantime, leapt 33 per cent in the nine-month period to 176,110.

Benefit of cheap sales

Caribbean Cement has acknowledged in the past that it sells cheap in other countries to gain footholds in those markets. The upshot is that its finances remain dependent on strong domestic sales.

Consequently, alongside the 14 per cent increase in quarterly sales, total turnover rose by more than 10 per cent to J$2.05 billion in combined home sales, export sales and export clinker; but against the backdrop of a minuscule 0.65 per cent improved sales volumes over nine months, income fell by three per cent from J$6.13 billion to J$6.07 billion.

If CCCL maintains its current domestic sales trajectory, it will likely outperform the annual 531,000 tonne sales in 2010, but not by much.

Haynes did not venture a figure, but said he expects fourth-quarter volumes to outperform last year's quarter. Then, CCCL's home market sales topped 121,000 tonnes, according to the current financial report.

Of note, CCCL's export volumes year to date have accounted for close to 43 per cent of total sales in its home and regional markets - boosted by a 72 per cent rise in the third quarter - and is tracking seven percentage points ahead of the annual performance in 2010 due to a policy shift by Caribbean Cement to contain its market risk, including exposure to imports and a soft construction sector, through geographical diversification.

Aggressive push

The company is pushing aggressively into markets in the greater Caribbean and Central America, including the heavily competitive Dominican Republic, and is attempting to tie down fresh business in South America.

Caribbean Cement cut its third-quarter loss nearly in half to just over made a half-billion dollars as sales climbed, but dropped J$270 million deeper in the red over the nine months ending September with losses of J$1.4 billion.

The bleed resulted from a combination of lower revenue intake and higher debt-financing charges. CCCL said its production costs have also ballooned, eroding some production and market gains.

"After discounting for the increased volumes ... the energy impact on our manufacturing costs due to the higher energy prices has been J$630m," the company said. Electricity costs rose 47 per cent and fuel for its kilns rose 23 per cent, it said.

The market turnaround comes just as Caribbean Cement is reporting a loss of about half its book value from J$3 billion at the top of the year to J$1.6 billion nine months later, resulting from J$1.5 billion of accumulated deficits.

Caribbean Cement's financial troubles trace back to its US$177 million expansion in 2008, which was largely financed by debt.

Haynes said, however had that investment not been made, "our energy bill would have been increased by close to J$800m over the last nine months."

The cement producer is now J$8.2 billion in debt, resulting from the addition of J$2.5 billion in long-term loans since January.

Caribbean Cement is yet to divulge details on how the debt deal being negotiated by parent Trinidad Cement Limited with its creditors will affect or improve the debt profile of the Jamaican subsidiary.

TCL has struck a deal with the larger debt holders, but is still ironing out details of the plan for final sign-off.

JAMAICA: Impasse por el cemento de Jamaica no halla salida

Las condiciones del cemento de Jamaica mantiene enfrentados a los productores locales con la empresa Compañía Distribuidora de Cemento (Docemca). La industria local cuestiona la calidad del producto.

El tema llamó la atención de los profesionales del sector y el presidente del Colegio Dominicano de Ingenieros, Arquitectos y Agrimensores (Codia), Domingo Mateo, reclamó a las autoridades correspondientes el decomiso de un cargamento de cemento procedente de Jamaica, el cual se está comercializando en el país, sin concluir las pruebas de calidad y sin el permiso correspondiente que debe ser otorgado por el Ministerio de Obras Públicas.

Docemca desmintió las declaraciones del presidente de la Asociación Dominicana Productores de Cemento (Adocem), Osvaldo Oller, en cuanto a la importación irregular e ilegal al país del cemento importado Carib Cement.

Afirmó que Docemca que es una empresa legalmente constituida en el país. Informó que distribuyó a los medios de comunicación copias de las documentaciones depositadas ante los organismos gubernamentales correspondientes en cumplimiento de lo establecido por la Normativa RTD 178 y su artículo 9.3 referente a los requisitos exigidos a los cementos importados antes de su comercialización y entrada al país.

El gerente general de Docemca, Julio Vidal, alegó que las declaraciones del presidente de Adocem van dirigidas a confundir a la opinión pública y tienen como obje- tivo limitar la comercialización del cemento “Carib Cement”, ya que Adocem está conformada por sus competidores, los cuales, a su entender, pretenden desacreditar y descalificar el producto importado sin haber podido presentar hasta ahora pruebas independientes, fidedignas e irrefutables de que el cemento no cumple con los parámetros de calidad.

Actuación

En vista de todo lo anterior, sostuvo que Docemca se ve en la necesidad de precisar que las autoridades gubernamentales directamente implicadas en el proceso de importación del cemento han actuado con apego a la transparencia e institucionalidad que exigen las normas establecidas dentro del comercio internacional y más aún, con apego al tratado de libre comercio entre Caricom y República Dominicana.

En efecto, explicó que entre los documentos depositados por los representantes de Carib Cement, entiéndase Docemca, consta un fianza de garantía de fiel cumplimiento y responsabilidad civil por el 100% del valor CIF del cargamento; esta fianza fue emitida a nombre de la Dirección General de Normas y Sistemas de Calidad (Digenor), según lo establece la Norma RTD 178 y podría ser ejecutada por dicha institución en caso de que el cemento no cumpla con los requisitos de pruebas establecidos por la normativa de rigor.

“Sin embargo, habiendo Docemca cumplido en cada uno de los embarques anteriores con las normas y pruebas establecidas, fueron tomadas muestras del cemento correspondiente al reciente embarque tanto por Digenor, ProConsumidor y Obras Públicas.

Actualmente las mismas están siendo examinadas en los laboratorios Norteamericanos Construction Technology Laboratories (CTL Group), autoridad con prestigio y reconocimiento internacional en el análisis de materiales e infraestructura de la construcción”, explicó.

El representante de la empresa señaló que Carib Cement es el único cemento que actualmente es sometido por las autoridades dominicanas a pruebas de laboratorios independientes y de reputación internacional, garantizando de esta forma su calidad y fiel cumplimiento de las normas internacionales ASTM -C150. “Entendemos que todos los cementos de producción nacional deberían ser sometidos sin discriminación alguna al mismo escrutinio de calidad que el importado” indicó Vidal.

COLEGIO DE INGENIEROS Y ARQUITECTOS CONSENSO

El presidente del Colegio Dominicano de Ingenieros, Arquitectos y Agrimensores (Codia), Domingo Mateo, exhortó a los ingenieros diseminados en todo el país a que se abstengan de comprar ese tipo de cemento, que habría sido objetado en Jamaica y que ha sido traído "como si el país fuera una especie de basurero".

El profesional de la ingeniería advirtió sobre el peligro que representa el que se permita la comercialización de cemento no apto para la construcción, principalmente en República Dominicana, una isla ubicada en la trayectoria de ciclones.

La advertencia la hace el presidente del Codia, al referirse a la denuncia hecha por la Asociación Dominicana de Productores de Cemento Portland (Adocem), en el sentido de que un nuevo cargamento de cemento proveniente de Jamaica se está comercializando en el país sin haber concluido las debidas pruebas de calidad y sin el permiso del Ministerio de Obras Públicas.

Se recuerda que en mayo pasado, se intentó introducir y comercializar irregularmente en el país, otro cargamento de cemento portland tipo I procedente de esa nación caribeña, el cual estaba consignado a la empresa Docemca.

JAMAICA: Impasse por el cemento de Jamaica no halla salida

Las condiciones del cemento de Jamaica mantiene enfrentados a los productores locales con la empresa Compañía Distribuidora de Cemento (Docemca). La industria local cuestiona la calidad del producto.

El tema llamó la atención de los profesionales del sector y el presidente del Colegio Dominicano de Ingenieros, Arquitectos y Agrimensores (Codia), Domingo Mateo, reclamó a las autoridades correspondientes el decomiso de un cargamento de cemento procedente de Jamaica, el cual se está comercializando en el país, sin concluir las pruebas de calidad y sin el permiso correspondiente que debe ser otorgado por el Ministerio de Obras Públicas.

Docemca desmintió las declaraciones del presidente de la Asociación Dominicana Productores de Cemento (Adocem), Osvaldo Oller, en cuanto a la importación irregular e ilegal al país del cemento importado Carib Cement.

Afirmó que Docemca que es una empresa legalmente constituida en el país. Informó que distribuyó a los medios de comunicación copias de las documentaciones depositadas ante los organismos gubernamentales correspondientes en cumplimiento de lo establecido por la Normativa RTD 178 y su artículo 9.3 referente a los requisitos exigidos a los cementos importados antes de su comercialización y entrada al país.

El gerente general de Docemca, Julio Vidal, alegó que las declaraciones del presidente de Adocem van dirigidas a confundir a la opinión pública y tienen como obje- tivo limitar la comercialización del cemento “Carib Cement”, ya que Adocem está conformada por sus competidores, los cuales, a su entender, pretenden desacreditar y descalificar el producto importado sin haber podido presentar hasta ahora pruebas independientes, fidedignas e irrefutables de que el cemento no cumple con los parámetros de calidad.

Actuación

En vista de todo lo anterior, sostuvo que Docemca se ve en la necesidad de precisar que las autoridades gubernamentales directamente implicadas en el proceso de importación del cemento han actuado con apego a la transparencia e institucionalidad que exigen las normas establecidas dentro del comercio internacional y más aún, con apego al tratado de libre comercio entre Caricom y República Dominicana.

En efecto, explicó que entre los documentos depositados por los representantes de Carib Cement, entiéndase Docemca, consta un fianza de garantía de fiel cumplimiento y responsabilidad civil por el 100% del valor CIF del cargamento; esta fianza fue emitida a nombre de la Dirección General de Normas y Sistemas de Calidad (Digenor), según lo establece la Norma RTD 178 y podría ser ejecutada por dicha institución en caso de que el cemento no cumpla con los requisitos de pruebas establecidos por la normativa de rigor.

“Sin embargo, habiendo Docemca cumplido en cada uno de los embarques anteriores con las normas y pruebas establecidas, fueron tomadas muestras del cemento correspondiente al reciente embarque tanto por Digenor, ProConsumidor y Obras Públicas.

Actualmente las mismas están siendo examinadas en los laboratorios Norteamericanos Construction Technology Laboratories (CTL Group), autoridad con prestigio y reconocimiento internacional en el análisis de materiales e infraestructura de la construcción”, explicó.

El representante de la empresa señaló que Carib Cement es el único cemento que actualmente es sometido por las autoridades dominicanas a pruebas de laboratorios independientes y de reputación internacional, garantizando de esta forma su calidad y fiel cumplimiento de las normas internacionales ASTM -C150. “Entendemos que todos los cementos de producción nacional deberían ser sometidos sin discriminación alguna al mismo escrutinio de calidad que el importado” indicó Vidal.

COLEGIO DE INGENIEROS Y ARQUITECTOS CONSENSO

El presidente del Colegio Dominicano de Ingenieros, Arquitectos y Agrimensores (Codia), Domingo Mateo, exhortó a los ingenieros diseminados en todo el país a que se abstengan de comprar ese tipo de cemento, que habría sido objetado en Jamaica y que ha sido traído "como si el país fuera una especie de basurero".

El profesional de la ingeniería advirtió sobre el peligro que representa el que se permita la comercialización de cemento no apto para la construcción, principalmente en República Dominicana, una isla ubicada en la trayectoria de ciclones.

La advertencia la hace el presidente del Codia, al referirse a la denuncia hecha por la Asociación Dominicana de Productores de Cemento Portland (Adocem), en el sentido de que un nuevo cargamento de cemento proveniente de Jamaica se está comercializando en el país sin haber concluido las debidas pruebas de calidad y sin el permiso del Ministerio de Obras Públicas.

Se recuerda que en mayo pasado, se intentó introducir y comercializar irregularmente en el país, otro cargamento de cemento portland tipo I procedente de esa nación caribeña, el cual estaba consignado a la empresa Docemca.

JAMAICA: Jamaica regula la importación de cemento ante conflicto con RD

El Gobierno de Jamaica ha firmado una orden que requiere una licencia para todas las importaciones de cemento en la raíz por una disputa con la República Dominicana por la detención de cemento de Jamaica en ese país.

República dominicana exporta 200,000 toneladas anuales de cemento a Jamaica.

El tercer embarque enviado desde Jamaica de Carib Cement, valorado en unos 250.000 dólares EE.UU., se ha visto impedido de ser descargados desde mediados de abril.

El viernes, el ministro de Comercio, Karl Samuda dio a las autoridades en la República Dominicana, 48 horas para liberar el embarque.

Sin embargo, sin ninguna acción por parte del Gobierno Dominicano, el Ministerio anunció que los importadores de cemento en Jamaica ahora requieren una licencia de la Junta de Comercio para que se le permita entrada al producto .

Anoche, Samuda prometió que el gobierno haría todo lo posible para asegurar que cada fabricante de Jamaica esté protegido contra cualquier país que desee poner en marcha las barreras no arancelarias independientemente de su tamaño.

Dijo que espera que la República Dominicana honrará los términos de intercambio que reflejan la integridad y el cumplimiento de las normas que rigen el comercio internacional. Sin embargo, dijo que hasta ahora no ha oído hablar de ningún miembro de la administración de la República Dominicana.

JAMAICA: Autoridades jamaiquinas condenan bloqueo venta cemento

El Ministro de Industria, Inversión y Comercio de Jamaica, Karl Samuda, considera que el intento de bloquear la venta de cemento Carib en República Dominicana constituye "un caso clásico de la aplicación de barreras no arancelarias”.

El funcionario jamaiquino demandó de las autoridades dominicanas liberar en un plazo 24 a 48 horas el último envío de Carib Cement a la República Dominicana antes de presentar otras medidas al alcance de las autoridades de Jamaica.

Aunque el funcionario no ofreció detalles de las medidas que tomarían, adelantó que podrían ser drásticas si se mantiene la prohibición de comercialización del cemento de su país en República Dominicana.

Karl Samuda ofreció una conferencia de prensa en el su despacho en New Kingston. "Estamos dispuestos a defender a nuestros productores locales contra cualquier forma de barreras no arancelarias que pueden poner en contra de ellos", advirtió Samuda.

"Estamos muy, muy desanimados y decepcionados por lo que hemos estado presenciando en los últimos 15 días", dijo.

Dijo que su ministerio se había mantenido al margen del conflicto, con la esperanza de que se llegase a un acuerdo entre la empresa y la Asociación Dominicana de Productores de Cemento Portland (ADOCEM).

Por su parte, el presidente de Carib Cement, Anthony Haynes, califica como un cartel a la ADOCEM.

“Queremos dejar constancia de nuestra oposición como ministerio encargado de la promoción de la exportación y de la expansión de la producción local, y queremos dejar absolutamente claro que esperamos que las autoridades dominicanas interpongan sus buenos oficios para que este producto sea liberado”.

Los representantes legales señalaron que el envío valorado en unos 250.000 dólares, se ha visto impedido de ser descargado desde mediados de abril.

Según los juristas, la empresa Caribbean Cement Company Limited cumplió con todos los requisitos y con las normas de calidad establecidas en la República Dominicana.

Los abogados dijeron que el ministro de Comercio de Jamaica Kart Samuda está especialmente decepcionado por la detención del cemento, ya que la República Dominicana es uno de los socios del Cariforum Jamaica y signatario de la Unión Europea Acuerdo de Asociación Económica.

JAMAICA: Carib Cement Touts Lucrative South American Deal

Caribbean Cement Company Limited (CCCL) is about to expand its supply markets into South America, virgin territory for the Jamaican company, which has been building out its export operations to make up for business lost to imports in its home market.

General Manager Anthony Haynes said his company expects to close a new deal with a South American company in three months.

"The new contract will represent significant business for us but I can't speak to volume," Haynes told Wednesday Business on Tuesday.

"South America is where we are seeing more growth so we have been focusing in that area," he said.

Explaining why CCCL is taking on markets in the region, instead of parent Trinidad Cement Limited (TCL), Haynes said the Jamaican operation was motivated to grow to pay back the investment in its expansion, and was inclined to look overseas because of the projected 30 per cent contraction in the domestic market last year.

"So as the demand and supply dynamics change we turn to more export markets," he said.

"... The logistics and second phase of our expansion is to look to these markets in South and Central America which are seeing much more growth than the Caribbean."

pushing market growth

Beyond the immediate contract being finalised, Caribbean Cement will be going after market share in South American countries such as Venezuela and Colombia, as well as Costa Rica and Panama in Central America.

"We are now pushing market growth in the Spanish-speaking countries," said Haynes.

Caribbean Cement increased its productive capacity from one million to 1.8 million tonnes in 2009, but currently sells less than 750,000 tonnes of cement per year.

Sales volumes last year have underperformed because of falling domestic demand; and notwithstanding export growth linked to new markets in Haiti and Dominican Republic. Exports of cement rose by 73,000 tonnes in the January to September period, but domestic sales fell by 86,000 tonnes, as did clinker reports, which fell by 40,000 tonnes. Revenue, as a result, fell from J$6.9 billion in the nine-month period of 2009 to J$6.1 billion last year.

Caribbean Cement also reported a J$1.55 billion loss on operation in the 2010 period.

Trinidad Cement, which bears the brunt of the debt acquired to expand the Caribbean Cement plant, is now touting the new supply contract as significant enough to enhance the Jamaican company's business and improve the group's near-term prospects.

The group, at last report ending September 2010, was TT$2.5 billion in debt.

Under the plan being drafted, TCL hopes to defer principal repayments on long-term loans due 2011 to 2013, and extend the maturity of short-term debt.

The debt-restructuring plan is now being crafted, based on independent adviser FTI Consulting Canada's report to a steering committee of TCL lenders — who together hold a combined 75 per cent of TCL's total debt — on TCL's financial status and future business prospects.

TCL is drafting its own debt-restructuring proposal, which it will also present for consideration by lenders.

The cement group has delayed publication of its yearend results until April 30 and potentially to May 31, as well as those of listed subsidiary companies Caribbean Cement and Readymix, "to provide the maximum possible assurance" to external auditors about the debt plan.

Publishing the financial results before the debt programme is resolved would, TCL said, leave shareholders with a distorted view of the group's "performance and state of affairs".

"In relation to its Jamaican subsidiary, Caribbean Cement Company Limited, negotiations are at an advanced stage for the implementation of a major supply contract which will significantly enhance the company's and, by extension, the group's prospects in the near term," TCL said in a market filing.

"The finalisation of this supply contract has relevance to the group's 2010 audited financial statements."

The group made a loss of about TT$30 million in the third quarter, but reported positive earnings of TT$144 million over the nine-month period on depressed revenue of TT$1.2 billion (9m 2009: TT$1.37b).

Despite the parent's touting of the new supply deal, Caribbean Cement declined comment on the terms being negotiated and just how lucrative the contract was likely to be.

"I am not in a position to share any more information," said Haynes.

more efficient

Caribbean Cement's two largest export markets are said to be Guyana and Haiti, followed by Dominican Republic.

Haynes said, inside the Caribbean, potential growth markets include Guyana and Suriname, but that these are countries better served by TCL because of proximity.

"... While CCCL, instead of shipping all the way to Guyana, would ship to these markets which are closer in terms of distance, which would be more efficient," he said, referring to South and Central America.

"Over time, I believe there will be a natural rationalisation of the markets," he told Wednesday Business.

Haynes suggested that the new contract being pursued is a demonstration of Caribbean Cement's more aggressive stance on growing revenues.

JAMAICA: Work To Start On New Cement Plant

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.