The Guyana National Industrial Company Inc (GNIC) and the Trinidad Cement Company (TCL) are actively pursuing a plan for the establishment of a local cement bagging facility.
The proposal in its infancy, will see the product being shipped from the Trinidad base for packaging at the local facility. This, and other initiatives geared at enhancing the viability of GNIC, were outlined when the company's Chairman Glen Khan briefed the media yesterday. Khan's Laparkan Group holds majority shares in GNIC.
According to Khan, who is also chairman and CEO of Laparkan Holdings Ltd, GNIC and TCL have been engaged in discussions about the bagging facility in Port Georgetown over the past six months. "We are pleased to say that TCL is prepared to move in that direction, but have to make sure to get the requisite approval from the Environmental Protection Agency," Khan said.
TCL's General Manager, International Business and Marketing, Kelvin Mahabir, said the concept of such a facility at GNIC had been engaging his company's attention for quite some time and the GNIC site was well located. According to Mahabir, it is foreseen that the bulk product would be shipped from Trinidad and loaded into silos from which they would be bagged for the local market.
Financing for the project is expected to come primarily from among the current local distributors who have expressed the desire to take an equity stake in such a project. "The plan is to look for an opportunity to involve local investors in the programme, and GNIC will merely be a facilitator of the overall process," Mahabir said.
He said local packaging of cement could have the positive impact of reducing cost to consumers, but that would be dependent on several factors.
Khan interjected that the possibility of lower prices would have to be dictated based on supply, but posited that the intended development of the facility was likely to aid in increasing the use of the product. He said the economics favoured acquiring cement in bulk to be bagged locally.
All of the equipment to be used in the process, the GNIC chairman said, would be state-of-the-art and would dispel most of the environmental concerns likely to be raised. However, he said, the company was now going through all of the necessary processes and following all of the guidelines since it was important to make sure that the facility was environmentally friendly.
Once given the go-ahead, construction of the facility should take between nine to 12 months. The final capacity of the plant would be dependent on the demand for the product. Present local consumption is pegged at between 120,000 to 130,000 tonnes per year.
Meanwhile, next Thursday, GNIC hopes to sign a deal with a major container line which will see its wharf being further developed. Khan noted that the company's wharf, though it is the largest in the country, currently did not accommodate any container lines.
The contract with the container line, said to be a prominent player, will, according to Khan, "transform GNIC into one of the best stevedoring wharf operations in Port Georgetown."
The company is also examining the possibility of moving into barging services and subsequent expansion into interior locations. That service, Khan said, would be aimed at reducing transportation costs to these remote locations and would also aid with the stimulation of hinterland development.
That apart, GNIC also intends to venture into transporting sand to Caribbean locations, the idea being to use the bulk cement vessels in a relay operation. GNIC has the requisite skills to manufacture its own barges, as well as dry dock facilities.
Moves are also afoot to develop a section of Princes Street going west from Lombard Street and this would include repaving the roadway and putting removable covers over the canal. Meetings with the council to push this idea were said to be pending.
Also as part of its grand expansion plan, GNIC has plans in place for the construction of a 150,000 sq ft warehouse at its present site to better service the import/export industry. Khan also alluded to a number of other initiatives, including working with the Chinese from whom it is hoped the company can benefit with respect to technology and low cost production techniques.
Enforcement of the Maritime Act, Khan said, would take care of the illegal dry docks currently in existence, mostly at Parika, East Bank Essequibo. According to the chairman, once the provisions of this law are effected all coastal vessels would be required to register with the maritime authorities annually and this could see use being made of GNIC's dry dock to allow for inspection of these vessels.
GNIC, formerly the Guyana National Engineering Corporation, was divested by government over six years ago, at which time a partnership was forged between workers of the former corporation and Laparkan, which became the major shareholder.
Khan said the last six years has had its trials, but the company was being primed for success and this was manifested in the recent move by President Bharrat Jagdeo to convert $46 million of the state's lease payment towards workers' equity, among other support.
GNIC has a five-year investment plan worth between US$5 million to US$10 million, which it is hoped will generate approximately 1,000 jobs and some amount of development in the hinterland and at Linden. So far US$1.5 million has been raised from the Caribbean Financial Services Corporation (CFSC).
TCL is a group of companies with facilities in three regional territories - Trinidad and Tobago, Barbados and Jamaica. Its product line includes cement, concrete and lime, which are mainly exported within the region and Latin America. A recent takeover bid by giant Mexican cement company CEMEX was not successful and the company continues to operate with 80% of shares owned by regional interests and the other 20% by CEMEX. In recent years, TCL has also faced problems locally because of its inability to meet Guyana's market needs.
Apart from Khan the briefing was attended by GNIC's CEO, Clinton Williams, its Vice-Chairman and head of the Trades Union Congress, Carvil Duncan, Project Analyst of CFSC, William Swamy and James Devers, managing director of Enterprise Development Ltd. Devers is GNIC's project consultant.