Cement plant firm despite Larpakan bond flop
Stabroek News
April 16, 2004
The failure of the $2.4B bond issue by Laparkan Holdings Limited will in no way impinge on the cement bagging plant at GNIC's wharf or its contracts with CNTC Trading of China for the transport of sugar from Skeldon, says Chief Executive Officer of the Guyana National Industrial Corporation (GNIC) Clinton Williams.
Some $500M of the bond resources was to go to upgrade the facilities of GNIC and purchase barges and haulers to facilitate inter-modal transport of sugar, cement and other products.
However, Williams says GNIC will be entering into a lease purchase plan for two bulk ships to transport cement to Guyana and Suriname and return with other goods. It will also rent barges to ship sugar to Georgetown and cement to Linden for Brazil. He indicates that the firm already has financing arrangements in place for the two bulk ships and this is why it could not provide its assets as security for the bond issue.
"We can go other routes to get the necessary financing," Williams said. The Laparkan bond offer information memorandum said that $500M of the $2.4B being sought was to be invested by GNIC for preparatory work for major contracts it would bag. Williams said this investment would have included having in place infrastructure to respond to the need for bulk cargo shipping to Brazil, including an upgrade of the wharf and additional facilities.
Williams says the failure to secure the money will not affect the cement bagging plant as GNIC is subleasing its premise to Trinidad Cement Limited (TCL) to build its bagging facility. He says TCL has contracted GNIC to build three silos, a packaging plant and a warehouse and is providing the financing for this.
"Our input is in the construction," Williams says.
He indicates that GNIC wants to stay in the traditional business of shipping and moving bulk items. Its contract with CNTC Trading will allow it to do the local transport of its cargo, do some fabrication for it and then to ship the sugar to its destinations. He sees the need for Guysuco to refine sugar to stay alive as an assurance for GNIC's plans as well.
The lack of the bond resources will not stop GNIC in its plans to ship bulk goods to Christianburg, Wismar and then hauling this to Brazil and delivering cement across the country. Williams indicates that creative ways would be found to surmount this.
GNIC last week signed an agreement with TCL for the construction of the cement bagging plant, which should be operational by September. Cement prices have been soaring and there are still shortages.