Oct 2009 Financial News

Cement, CET and chicken to figure in COTED meeting

Oct 07, 2009

Jamaica, on Thursday, will seek approval of Caricom colleagues on its plan to waive duties on 120,000 tonnes of foreign made cement, allowing for small levels of competition in its home market that is dominated by Trinidad-owned Caribbean Cement Company Limited.

Jamaica's industry and commerce minister Karl Samuda, backed by foreign minister Dr Ken Baugh, will make the case at Christ Church in Barbados at the 28th meeting of the Council for Trade & Economic Development (COTED).

Beyond Jamaica's interest, the COTED meeting will also more broadly review application of the Common External Tariff (CET) - a mechanism to safeguard regional commerce - on products that are seen as internationally competitive, as well as banana exports to Europe, shipping of chicken meat, and importation of flour and animal feed.

Jamaica has, for the past three years, suspended annually the 15 per cent CET on imported cement, to take up the slack first created by the faulty cement crisis of 2005, and later to keep the market supplied as Carib Cement completed its US$177-million expansion.

Compensation to builders

The mid-decade breach in Caribbean Cement's quality control systems came close to shutting down the Jamaican construction sector, put thousands out of work as projects shuttered to assess safety, and forced the company to compensate builders and developers at a cost of more than $320 million.

Samuda is seeking to suspend the CET for another year, saying he was concerned that Carib Cement - its boosted capacity from one million tonnes to 1.8 million tonnes at its Rockfort, Kingston, plant - was without adequate storage space for a build up of satisfactory levels of inventory and may not, in a crisis, be able to adequately supply the market.

The 120,000-tonne quota represents, according to Samuda's calculation, 15 per cent of the cement market, based on estimated demand of 850,000 tonnes.

Initially, the industry, investment and commerce minister had decided on a quota of 170,000 tonnes to importers, representing 20 per cent market share, but amended it weeks later after, it appears, persuasive arguments from Caribbean Cement.

Source:
lavern.clarke@gleanerjm.com
Jamaica Gleaner
Wednesday October 7, 2009

http://www.jamaica-gleaner.com/gleaner/20091007/business/business4.html