A downturn in the market for cement combined with the sharp depreciation of the Jamaican dollar, has driven down, by 20 per cent, last year's profit by the Rockfort, east Kingston-based Caribbean Cement Company (CCC) and contributed to softer earnings by its parent company, Trinidad Cement Ltd (TCL).

In its just released financials, Carib Cement reported net profit for 2008 of J$416.44 million, against $522.12 million the previous year.

On the other hand, TCL profit, at TT$156.32 million (US$1= TT$6.80), was TT$55.12 million, or 26 per cent below that of the previous year, a decline, which TCL said was, in part, fuelled by "the effects of the global economic crisis".

"The group was negatively impacted by softening markets in the fourth quarter (of 2008)," said TCL's chairman, Andy Bhajan, and group CEO, Rollin Bertrand, in a statement to shareholders.

The market situation was not helped by the fact that in Barbados, the TCL subsidiary, Arawak Cement Company, had to provision TT$21.1 against a fuel rebate receivable that is still being pursued by the company.

In Jamaica, where Carib Cement, in the fourth quarter, completed the installation of a new kiln - which it said enhanced its efficiency and reduced production costs - the company sold 748,723 tonnes of cement, nearly 65,000 tonnes, or approximately eight per cent less than in 2007. The kiln is part of a US$100 million factory modernisation, which is now heading towards completion.

While it was able to increase revenues by approximately 12 per cent to $8.8 billion (TCL's revenue at TT$2.074 billion was up 7.8 per cent) the growth was not enough to completely negate the effects the other market and economic impacts.

For instance, with the Jamaica dollar headed rapidly south against the greenback last year - it devalued approximately 12 per cent - Carib Cement reported $213 million in foreign exchange losses, including the cost of financing foreign currency debt.

Additionally, the softening of the construction sector, which negatively impacted the demand for its products, was exacerbated, Carib Cement complained, "with dumped cement still being imported from China without imposition of the 89.7 per cent duty ruled by the Anti-Dumping Commission".

The company warned that high inventory of clinker and cement were 'already putting strain" on its liquidity position.

Carib Cement, however, suggested that were it not for its commissioning of the new kiln, which significantly increased is capacity, things would have been much worse.

"Almost one-half of net profit after tax for the year was earned in (the fourth) quarter, despite the major translation losses sustained in that period," said chairman Brian Young.

Young said that this year, Carib Cement would attempt to use its improved efficiency and a cheaper Jamaican dollar to drive exports.

"An aggressive marketing programme is being pursued and, with the increased competitiveness of our products externally from the further devaluation of the Jamaican currency, during the first quarter of 2009, we expect exports to constitute at least 15 per cent of total sales in 2009," he said.

business@gleanerjm.com