Jul 2014 Financial News

Carib takes larger share of local cement market

Jul 02, 2014

CEMENT manufacturer Carib Cement Company (CCC) indicated that its share of the local marketplace increased from roughly three-quarters to four-fifths.

The claim holds some merit as Carib entered into an agreement with then competitor Arc Systems last year.

"Carib Cement's market share improved to 86 per cent as a result of one of the traditional importers foregoing importation to purchase from Carib Cement," stated the audited annual report released late June. The local cement manufacturer previously stated that its market share hovered at 75 per cent.

Carib added that its market share increased despite a single-digit percentage reduction in the domestic market to roughly 690,000 tonnes.

In April 2013, the company forged a medium-term supply deal with the Norman Horne led Arc Systems to solely sell Carib cement. The agreement reduced CCC's major competitors from three to two, -- Tank-Weld and Buying House.

Last year, the company supplied 100,000 tonnes of clinker to Venezuela under the Trade Compensation Mechanism of the PetroCaribe Agreement. The first shipment left the island in December 2013 and CCC wants to extend that contract into 2014 with plans to ship an additional 240,000 tonnes.

It previously indicated that the Venezuela market offered vast potential to grow its annual sales by 50 per cent. Already, total sales rocketed to $12 billion for the financial year ending December 2013 compared with $9 billion a year earlier.

The local cement manufacturer started negotiations to enter Venezuela years ago but it was stalled due to the ill health and eventual death of president Hugo Chavez.

Last year Carib also restructured US$75 million in debt owed to its parent Trinidad Cement Limited by converting US$37 million into preference shares and converting US$38 million as capital.

"As a result the balance sheet was considerably strengthened. Group equity stood at $4.7 billion compared to a negative equity position of $2.9 billion," said management in its analysis and discussion accompanying the financials.

The group made $35 million profit for its March quarter 2014 compared to a loss of $497 million in the same quarter a year earlier due to debt restructuring. Carib added that its export cement sales volumes grew 87 per cent based on regional growth in Suriname and Guyana.


Source:
Jamaica Observer
Wednesday July 2, 2014

http://www.jamaicaobserver.com/business/Carib-takes-larger-share-of-local-cement-market_17069744