Aug 2008 Financial News

Local market not big enough for another cement company

Aug 04, 2008

THERE is definitely no room in Barbados for another cement manufacturer, according to Trade, Industry and Commerce Minister, George Hutson.
Speaking recently about the industry in the wake of an increase in the price of cement to Barbadians, Hutson told the media that the size of the local market cannot support another manufacturer of the commodity.

"Certainly the size of the market will not support it from an economic point of view, thats the reality of it," the Minister explained.

However, he said that if someone wants to establish another company to manufacture cement in Barbados there will be no objections from Government. "But it is not going to happen because of the nature of the product," said the Minister.

"The cost of fuel and inputs into cement manufacturing is the same whether you buy the cement out of Trinidad or from wherever. And those prices are going up as well," according to Hutson.

The Minister has also pointed out that if business houses were able to bring cement into Barbados at a better price they would do so. "People can import it ... but the fact that they are not importing cement in a large volume tells you that it is not economical from a business point of view," the minister said.

The lone cement manufacturer in Barbados is the Arawak Cement Company Limited (ACCL) which is owned by the Trinidad Cement Limited.

The Minister pointed out that right the local market can only absorb about 50 per cent of the capacity of the ACCL. "That is the extent of the market in Barbados and we are going through a construction boom. But that is not something that will last for the next 50 years. Construction like any other sector has its ups and down," said the Minister.

Official data published in the 2007 Barbados Economic and Social Report, stated that cement production fell for the second consecutive year reaching 316. 5 thousand tonnes. This was a six per cent decline on the amount for 2006.

Barbadians were to begin paying higher cement prices from the beginning of this month. The company blamed higher input costs for the increase. Hutson said that most of the cement manufacturing in the Caribbean is done by Trinidad Cement Limited.


Source:
The Barbados Advocate
Monday August 4, 2008

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