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.
