Carib Cement Marketing Manager Alice Hyde and General Manager Anthony Haynes. - File

Even before the PIOJ reported that construction activity had slid 11 per cent in the last quarter alone, cement sales were already pointing to a market in decline.

Caribbean Cement Company Limited does not expect a turnaround in sales for another year or more, but says it will not derail the Kingston plant's expansion which is to be finalised mid-year.

Kiln five was completed in July and commissioned in phases ending October, and the cement company immediately turned to the part of the project - the mill - on which construction is ongoing.

"We are being very optimistic in the outlook and we expect that in Jamaica and regionally the market will start expanding again about 2010," said marketing manager Alice Hyde.

"We are ensuring that we gear up so that we are in a position to not only supply the domestic market with cement, but the export market."

The market decline will not, however, affect the cement company's expansion on the Rockfort plant at the eastern end of the city, nor does Carib Cement plan to cut any of its 300 staff.

"It is a company policy that such action is a last resort and presently there is no real need for us to reduce our work force," Hyde said.

The US$177 million price tag remains, said financial director Orville Hill, with US$130 million already spent on Kiln five, which was commissioned in phases between August and October 2008.

The mill is budgeted at US$35 million, while the other US$12 million is being spent on upgrading the packaging facility, port operations and other logistics to move the inputs more efficiently to the plant for processing.

Cement sales have been on the decline, but this Hyde says is the result of more discriminatory spending by consumers as the dollar depreciates and food prices climb, as well as eroded income linked to the fallout of alternative investment schemes.

At September 2008, the period last reported on by Carib Cement, the company sold 569,216 tonnes of cement over the nine months of that year, compared to 596,739 in the same period in 2007.

Recession

The economy has hit recession, ending the year at 0.4 per cent decline in gross domestic product, with construction GDP falling 5.2 per cent.

"The level of the remittances coming in from the United States, which traditionally forms a big part of people doing renovations and expansions to their houses have tapered off somewhat, and people are not able to build at the same rate or at the same pace that they may have been able to in the past," said Hyde.

Carib Cement traditionally sells about 800,000 tonnes of cement annually, supplying its market here, but also exporting the commodity to countries such as Guyana, St Kitts and Anguilla.

Hyde says there are a myriad of developments taking place in St Kitts, which creates potential for growth, and that the market in South America is showing promise despite a reduction in sales recently.

The company says it will complete the new cement mill in June, and that this along with the upgrade of its packing facilities will realise an output of about 1.8 million tonnes annually.

"There are some additional upstream and downstream projects just in terms of optimising our packing facilities," Hyde said.

"Once the cement mill is in place, you have to ensure that you can pack the cement efficiently; so we will be upgrading our packers and our palletises which will also enable us to package for export."

The new precalciner, dry process kiln commissioned last year is expected to increase clinker production from about 600,000 tonnes to one million tonnes per year.

Strong market

Clinker, an intermediate product in the making of cement, which when cooled and grounded with other additives produces cement is exported to Trinidad and Tobago; while tozzolan, a volcanic rock mined in the Bull Bay area of St Andrew has a strong market in Haiti.

CCCL is a subsidiary of Trinidad Cement Limited (TCL), which along with other affiliates such as Ready-mix (West Indies) Limited, TCL Packaging Limited, Arawak Cement Company Limited, TCL Trading Limited and TCL Service Limited engage in the manufacture and sale of cement and lime, pre-mixed concrete, packaging materials, and the mining and sale of sand, gravel and gypsum.

The company manufactures and sells ordinary Portland cement, TCL premium cement and Class G high sulphate resisting well cement.

During the year ended December 31, 2007, TCL produced 1,448,869 tonnes of clinker, and 1,991,357 tonnes of cement.

mark.titus@gleanerjm.com