By McPherse Thompson, Assistant News EditorTHE CARIBBEAN Cement Company will be investing US$100 million at its Rockfort plant in eastern Kingston over the next three years as part of a general thrust to improve productivity and efficiency, according to general manager Anthony Haynes.
Among the areas targeted for improvement will be marketing, improvement in customer relations, product diversification, as well as continuing its defence against the dumping of cement in the local market.
Mr. Haynes said that in an effort to optimise its plant and technology, it has reached an agreement with Evolve, a management change company, and was about to enter an agreement with Penta, a leading engineering firm in the United States to assist in the upgrading of the plant.
CHALLENGES
Addressing shareholders at the company's annual general meeting at the Jamaica Pegasus Hotel, New Kingston last week, the general manager said that among the challenges Carib Cement will face this year will be the impact on companies of the new taxation measures announced by Finance and Planning Minister Dr. Omar Davies two weeks ago. Although Mr. Haynes did not mention the specific taxes, a four per cent cess on imports of capital goods and raw materials, as well as the addition of a number of items to the list taxable under general consumption, have been of major concerns to companies that depend on imports for major inputs in their production processes.
Mr. Haynes also spoke to the threat of world recession and noted that although global cement consumption grew from $1.6 billion to $1.7 billion last year, major players in the industry were consolidating their operations and a projected growth in cement production in Asia meant the possibility of more dumping in the local market this year.
In addition, Carib Cement could also continue to face significant increased fuel and electricity costs in view of the continued depreciation in the foreign exchange rate.
One shareholder questioned why the Cement Company, having earned a record net profit of $375 million, based on its record performance in every business centre during the past year, was only able to pay out seven cents per share dividend.
IMPROVEMENT INITIATIVES
However, Brian Young, the company's chairman, said that while Carib Cement would have liked to pay out more, the expansion and improvement initiatives they have undertaken at the plant require that they conserve cash to plough back into the company.
The deteriorating condition of the Rockfort Mineral Bath, a subsidiary of Caribbean Cement Company, was also a contentious issue at the meeting.
According to shareholders, the spa needs to be closed and upgraded. "The management level has fallen, the pool needs to be vacuum cleaned, the changing room is a mess," said one shareholder. Others felt that although Carib Cement has outsourced the management of the Bath, it remained part of the group and it was therefore the prerogative of the parent company's management to ensure that it was kept in the best condition.
Mr. Young said the directors have noted the concerns about the general condition of the spa and would seek to address the issue.
However, Rollin Bertrand, one of the directors, said that when Trinidad Cement Limited (TCL) acquired the Caribbean Cement Company, it also took over the Mineral Bath, but decided to outsource its management because "the hospitality industry is not our business. We would not acquire a hotel or enter the hospitality industry in any way because that's not our core competence," he added. Hence the reason the Bath management was outsourced, he said.
Noting that the dust fallout from the cement plant at Rockfort has also contributed to the problems at the Bath, Mr. Bertrand said their strategic plans to improve conditions at the cement company also called for them to address environmental issues such as the dust nuisance and therefore the problem would be addressed.
SIGNIFICANT IMPROVEMENTS
In fact, Mr. Haynes said the measures taken so far have resulted in significant improvements in dust emissions from the cement plant, giving residents of the nearby residential community of Harbour View a cleaner skyline.
At the meeting, shareholders approved a number of resolutions, including one appointing Ernst & Young as auditors of Carib Cement, replacing PricewaterhouseCoopers, which has audited the company's accounts for the past 42 years.
