Jul 2004 Financial News

Carib Cement US$100-m expansion still awaits permanent duty ruling

Jul 26, 2004

Caribbean Cement Company last week made it clear that its planned US$100-million expansion was still contingent on securing a minimum three-year increase in the duty on imported cement.

The company said that the expansion would likely start around September, pending a favourable outcome to the request it submitted to the Anti-dumping and Subsidies Commission. It said a clearer picture should emerge by the end of August.

"We're hoping to pull everything together by September," Hollis Hosein, chief financial officer of CCL parent company, Trinidad Cement Limited, told the Business Observer last week Wednesday. "We should have a clearer picture by the end of August."

Hosein was one of the participants at an investor forum hosted by the Jamaica Money Market Brokers (JMMB) at the Jamaica Pegasus Hotel in Kingston. Trinidad Cement Ltd was the guest company at the forum.

Trinidad Cement, which bought the local company in 2000, has been arguing for the temporary protection against imports from low cost markets, while it upgraded its plant at Rockfort in eastern Kingston.

Last December the Anti-dumping Commission slapped 25.83 per cent duty on imported cement, but promised a final ruling, now generally expected by July 16.

The Carib Cement expansion is expected to be financed through a mixture of debt and equity from a range of funding sources, including as primary lender, the International Finance Corporation (IFC) - the private sector arm of the World Bank. Caribbean financial houses will also provide funding. The company will seek capital from the local equities market.

The IFC is believed to be awaiting the permanent outcome of the safeguard investigation by the Anti-dumping Commission in order to give a green light to CCL's application for financing.

Carib Cement's general manager, Anthony Haynes, last week confirmed that the group had already received funding proposals from "secondary lending agencies in Jamaica and Trinidad and are in the process of evaluating the proposals".
Requests for funding proposals for the major equipment for the project were issued, with closing date at the end of July, he said.

Neither Haynes nor Hosein would name any of the financial institutions that had submitted proposals to finance the project. However Business Observer sources say that Capital & Credit Merchant Bank and RBTT are among the banks. It is not clear whether Citibank - one of the original financiers of TCL's local investment at CCL - will participate.

Haynes declined to say whether Carib Cement would use the approach of a rights issue to raise the equity funding.

http://www.jamaicaobserver.com/magazines/Business/html/20040706T230000-0500_62376_OBS_CARIB_CEMENT_US_____M_EXPANSION_STILL_AWAITS_PERMANENT_DUTY_RULING_.asp