Oct 2006 Financial News

Mainland to import 200,000 tonnes of cement annually

Oct 25, 2006

Hardware merchants Mainland International hopes to capture 20 per cent of the local cement market with plans to import an annual 200,000 tonnes of the commodity, alongside output from its planned grinding and bagging facility.

Mainland's senior vice-president, Garth Walker, told Wednesday Business the company would be bringing in a shipment of cement at least every two months.

"In fact, we are actually looking at bringing in at least five shipments next year, with an average each of about 40,000 tonnes," said Walker.

Getting financing

That's how the hardware business will have to service the market for now, given that it is yet to tie down financing on the plant, and is still awaiting final approvals and permits from planning regulators.

"I don't want to put a time-frame on it [but] we expect to be up and running early next year," said Walker. "Right now, we are actually finalising approvals from the various government agencies and getting our financing in place."

Mainland had previously said that it planned to start construction in time to put the plant into production before the end of next year. It later said its timetable should coincide with the reimpo-sition of the duty on imported cement in two years.

Based on current demand, those in the industry estimate that the country uses about 70,000 bags of cement daily. In fact, the local demand for cement is 1.2 million tonnes per year, the bulk of which is supplied by local manufacturers, Carib Cement which, up until recently, had a virtual monopoly of the market after importers Mainland and Arc Systems had withdrawn from the market.

Other players

Mainland push for market share comes on the heels of an admission from Carib Cement last month that its mills were operating at 80 per cent capacity, and that the country would have to import to fill the gap. It was Carib Cement's inability to satisfy the local market which forced the government to waive the Safeguard duty that protected the Rockfort-based producer against imported cement, re-opening the window for importers to re-enter as players.

"Over the last 10 weeks, we have imported 42,500 tonnes of cement from our regular supplier in China," said Walker. "I think that one of the major advantages we have over other importers is our distribution network, where our five stores islandwide serve as depots for the retailing of our cement."

Ashford W. Meikle, Business Reporter
ashford.meikle@gleanerjm.com
The Jamaica Gleaner
Wednesday, October 25, 2006.
http://www.jamaica-gleaner.com/gleaner/20061025/business/business4.html