Mar 2008 Financial News

Dr Rollin Bertrand: One Caribbean leader

Mar 13, 2008

Dr Rollin Bertrand receives a luminary award from the American Foundation for the University of the West Indies.

About Bertrand…

Chairman of the Board of Trustees of the Caribbean Court of Justice Trust Fund.
Chairman of the Water and Sewerage Authority.
Director of Trinidad Aggregate Products Ltd and the T&T Stock Exchange.
Former president of the Caribbean Association of Industry and Commerce and the Association of Cement Producers for Latin America and the Caribbean.

Dr Rollin Bertrand has been at the helm of the Trinidad Cement Ltd (TCL) Group of Companies for the past decade.

During that period, the CEO consolidated the operations of TCL’s three cement companies within the Caribbean Community (Caricom) and saw the birth of the slogan, “One Caribbean, One Company.”

He has been credited with increasing the capacity of TCL’s main plant at Claxton Bay from 600,000 to 1.2 million tonnes a year, completing the establishment of a cement terminal (packaging plant) in Guyana and setting up an energy optimisation project at Arawak Cement, the TCL plant in Barbados.

His foresight is responsible for the US$180 million state-of-the-art upgrade of Caribbean Cement Company Ltd in Jamaica, which the group purchased in 1999.

In 2002, he was also able to thwart a takeover bid for TCL by Cemex, one of the company’s major international shareholders, by leading a strategic and diplomatic campaign to keep TCL a strong Caricom enterprise.

Apart from his exploits as head of the TCL Group, Bertrand has contributed to the development of T&T and the region in other areas.

Chairman of WASA, a director on the board of the T&T Stock Exchange, chairman of the board of trustees of the Caribbean Court of Justice (CCJ) Trust Fund, are but a few of the hats he also wears.

In recognition of his social commitment and contribution to the development of the region, Bertrand was recently presented with a luminary award from the American Foundation for the University of the West Indies.

One could say that the award, presented to him in New York on January 28, has “cemented” him as a true Caribbean leader.

In an interview at his Claxton Bay office Bertrand said, “It is an honour for me to receive it (the award) on behalf of the TCL Group.

“It is a personal honour for me, but I don’t kid myself. The TCL Group is the work of a lot of people and I want to recognise the 1,100 employees: board, management and staff.”

The Caribbean visionary who has joined the ranks of distinguished individuals such as First Lady Eleanor Roosevelt and Her Royal Highness Princess Alice (recipients of the award), is now poised to take his group one step further.

Promising an exciting year ahead, the UWI (Jamaica & TT) geology graduate is entertaining enquiries to engage in quarry operations and in the biofuel industry.

The company is also determined to improve its safety record.

Bertrand declined to disclose details of the new divestment thrust in the wide-ranging interview.

“We have had enquiries to invest in a quarry, we would look into that. We have had enquires for biodiesel fuel in our Barbados plant which we are looking at.”

In addition to those interests, the group is also modernising its plants to achieve greater efficiency and environmental performance, in preparation for a period of recession in the US, which some economists are predicting.

“We are modernising the plants because we know that the good times will not continue indefinitely.

“When we bought Caribbean Cement Company Ltd in Jamaica in 1999 it was not a modern facility. That’s why we are upgrading here and in Barbados so when things are not so bright the company has a cost profile so we can survive.”

The modernisation has not come without casualties, as TCL has had to cut staff in Jamaica.

“Because we are configuring the organisation to the new single line process but it is not a significant adjustment in staff.”

The US$180 million Jamaican plant, which has been under construction for the past three years, is set for a mid-year commissioning.

When commissioned, the state-of-the-art-facility will double Jamaica’s output of cement.

“We never thought the time would come in which the market would exceed the capacity of that plant,” Bertrand said, recalling the struggle to supply the market.

“The Jamaican economy has been reporting a very modest, lukewarm growth, but that does not really speak to what is happening in the construction sector.”

Rising costs caused the company to increase the price of its product on February 1.

Rising prices, particularly the price of steel which Bertrand said had escalated by 80 to 90 per cent, also impacted significantly on the plant modernisation.

“The price of everything keeps going up, but I don’t think a lot of Trinidadians understand (that) the impact of the rising price of oil and the depreciation of the US dollar is feeding into everything that we buy.

“So spare parts, all of our consumables, everything we use on the plant, comes with this escalation of the US dollar.”

TCL’s prospects are also favourable in the midst of a booming construction binge.

Bertrand said TCL continued to satisfy the growing demand for cement.

Market buoyant but…

Stock price remains static

“In Jamaica, we were two years behind, here in T&T we were two years in front, so we put in the expansion for a surge in demand. So we are quite comfortable with supplying the local market even with a massive project like the Essar Steel plant.”

TCL has submitted proposals to Essar to provide all its cement needs.

“We have identified the volumes and we are making sure we have the production ready for them.”

Bertrand was not willing to consider the impact on the company should Essar chose to go with an alternative cement provider. He is confident TCL has submitted proposals which are very competitive in terms of the quantity required, problems with importation, port congestion and storage.

“The plant is ten minutes up the road. We will run the packing plant 24 hours a day just to supply them. They take bulk cement so they will just come with their tankers here, load and go to the site.” He added that there is also a global shortfall of cement, which TCL has catered for.

In terms of the company’s future, Bertrand said, “People feel the cement business is good business these days in the sense that like the petroleum sector there is a very, very, thin balance between demand and supply.

“You would remember the days when there was an over supply with products coming from Thailand and Indonesia.

“It is no longer like that. The market has corrected itself and we are seeing a situation now where demand is, in many cases, greater than supply.”

He said TCL’s output for 2008 is projected at two and half million tonnes of cement and 350,000 cubic metres of pre-mixed concrete.

Stock Exchange

Commenting on the price of the company’s stock on the T&T Stock Exchange—which has remained static in spite of the buoyancy of the market—Bertrand said it is not a reflection on the companies which are listed on the exchange nor a reflection of what is happening to the economy.

“I have seen companies show terrible results and their share prices remain the same. I have seen companies show excellent results and their share price stays the same.

“The stock market today is not a reflection of the fundamentals of the company on the stock exchange because of the investor climate and certain issues that arose with institutional investors having to come out of the market.”

He said the challenge is to stimulate the market again because the market is really “too dead and we need to bring back investor confidence.

“When you look at the stock exchange it is unbelievable. You cannot believe this exchange exists in a market that is so buoyant.

“The T&T economy is moving and the stock market is flat. Something is wrong with that. Normally when an economy is booming the stock exchange booms, because people have more disposable income to invest.

“That is not the case in T&T. The market needs some policy directives. It needs some interventions to stimulate it, bring back investor confidence.”

Bertrand said new general manager William Iton has a lot of exciting ideas and the board is confident he will be able to return that investor confidence to the stock market.

The Guyana issue

TCL was also expected to seek leave to have the Caribbean Court of Justice rule on the issue of Guyana’s failure to apply the Common External Tariff (CET) to imported cement in accordance with Caricom rules.

The Council for Trade and Economic Development (Coted) has already ruled that Guyana does not have a waiver and must apply the CET to imported cement.

However, the Guyana government has not complied with the ruling.

TCL invested US$10.5 million in a cement terminal (packaging plant) in Guyana on the understanding that the Guyanese government would have ensured the application of the CET.


Source:
Yvonne Webb
Business Guardian, Page 8
Thursday March 13, 2008

http://www.guardian.co.tt/bussguardian6.html