Apr 2009 Financial News

Carib Cement targets US$17m in export sales

Apr 01, 2009

Caribbean Cement Company Limited (CCCL) exported its first shipment of 5,500 tonnes of bulk cement last Saturday under an arrangement with TCL Trading Limited, a related company that the Rockfort cement-maker said is part of its plan to expand into new regional markets.

The company plans to ship cement abroad twice per month under the arrangement with TCL Trading, and is targeting foreign sales of 200,000 tonnes this year at about US$80-US$85 per tonne, said CCCL marketing managing Alice Hyde.

Carib Cement last year sold over 30,000 tonnes of cement into foreign markets.

The new arrangement, targeted at Haiti, St Kitts, Suriname, Guyana and other possible markets in Central and South America, would, based on Hyde's estimates, represent potential revenue of US$17 million for the Kingston operation.

Different types of shipment

The TCL Trading arrangement accounts for 132,000 tonnes of the export target, valued in revenues at US$10.6 million to US$11.2 million.

"This will comprise different types of shipment: bulk, which is the raw bulk as well as jumbo bags, which is the one-and-a-half tonne bag and smaller bags. So it is a combination of all three types of products," Hyde told Wednesday Business.

Carib Cement, a subsidiary of Trinidad Cement Limited (TCL), sells most of its products in Jamaica, earning $8.8 billion in 2008, a billion more than the year before.

A decline in the construction sector last year resulted in depleted sales, mostly felt at the end of last year when construction GDP declined by 11 per cent.

Volumes dropped from 813,448 tonnes to 748,723 tonnes year on year.

"So that is when we started the export thrust and looking for new markets and pushing out based on what was happening in the local market," said Hyde.

In February, the company also rationalised market prices in Jamaica to eliminate regional disparities while at the same cutting prices at the same time. It now sells cement at $510 per bag across the board, whereas before Mandeville merchants, for example, were paying $517 per bag, while in Montego Bay is was $530 per bag.

Different prices

"We sell from four different locations outside of Kingston and we were selling from these locations all at different prices because of the haulage associated in getting the products there," Hyde said.

"What we did in February, we started selling at one price across the entire island."

The company's search for new markets outside of Jamaica became even more urgent with the near completion of the US$170 million Rockfort plant upgrading and modernisation project, scheduled for June, at which time the company would have boosted capacity to a million tonnes of cement.

The expansion added manufacturing capacity, upgraded technology, increase in its efficiencies and improvement in environmental performance, said the release.

The additional capacity from Kiln 5 which was commissioned last August was behind the February adjustment in prices, the company said.


Source:
dionne.rose@gleanerjm.com
Jamaica Gleaner
Wednesday April 1, 2009

http://www.jamaica-gleaner.com/gleaner/20090401/business/business4.html