Aug 2010 Financial News

Caribbean Cement suspends production twice in three months

Aug 18, 2010

Caribbean Cement Company Limited has announced a shutdown of production for the second time this year - the first as safeguard against damage from civil unrest, the second due to an underperforming market.

The company, which now has four months of supplies backed up in inventory, has shuttered Kiln 5 for 40 days and sent workers off on involuntary leave.

The Rockfort based operation should ramp up again at around the final week in September.

The decision gives Caribbean Cement breathing room to address its operating cash position, which was in deficit by J$209 million at June 30.

The company was up to then running a bank overdraft of J$187 million.

The closure will also give the company breathing room from high overheads linked to electricity diesel fuel charges.

General Manager Anthony Haynes did not return calls nor respond to emails seeking additional comment on the cost implications.

The first closure - a complete shutdown of the plant - during the west Kingston upheaval had been "very costly" to Caribbean Cement, the company said without disclosing figures in its second quarter financial filings to the stock exchange.

That lockdown would have lasted a few days; the current suspension will last more than a month but does not extend across the entire operation.

Caribbean Cement is struggling with reduced sales at a time when it needs a boost in revenues to pay for the expensive US$177 million modernisation project completed last year that close to doubled the Rockfort plant's capacity from one million to 1.8 million tonnes of cement per annum.


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business@gleanerjm.com
Jamaica Gleaner
Wednesday August 18, 2010

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