Cement supply still shaky
Stabroek News
June 4, 2004
Cement is now readily available on the local market but there are concerns that once the rainy season ends the infrastructure boom will suck up supplies.
In March the acute shortage of cement caused the government to suspend the Common External Tariff (CET) on extra-regional cement to allow local suppliers to import from non-regional sources.
Mark Jardine, sales manager at Anral Investments Ltd., (AIL) told Stabroek Business last week that the cement supply is back to normal. According to Jardine, for the past three weeks to a month the cement supply has been stable.
Officials at AIL say they have sufficient cement for at least a month and believe that when this amount is depleted that more cement will be available.
On March 10, the government was forced to implement the CET waiver after Guyana's main supplier, Trinidad Cement Limited (TCL), was unable to meet the local demand driving cement prices from below $1000 to as much as $1,800.
The Trinidadian company supplied 128,000 tonnes of cement last year to Guyana but the total imports last year were in the vicinity of 160,000 tonnes.
Christopher Persaud, of Toolsie Persaud Ltd., says so far the cement supply is adequate. TPL is selling a bag at $880 retail and company officials say they were guaranteed that regular shipments would follow.
TPL has continued to buy cement from TCL but also sells extra-regional cement.
However, TCL does the purchasing of the extra-regional cement for this local supplier and others, from Columbia and Venezuela since it is difficult for suppliers to arrange the shipments.
Persaud says cement plants in these countries have established markets and would only supply others if they have a surplus. Both Columbia and Venezuela supply the United States with cement.
The CET waiver, however, puts pressure on TCL to meet the demand, he says. Officials from TCL said in April that they were assured that the CET waiver would be dropped before the local TCL cement bagging plant opens in November.
On April 7, an agreement was signed between the Guyana National Industrial Company Inc.,(GNIC) and TCL to establish a bagging plant at GNIC which is expected to ease the cement shortage.
R&R International, Anral Investment Ltd., and TPL, are currently negotiating with TCL for a 40% stake in the US$4M terminal.
Tony Amres, manager of Readymix Concrete Ltd., in an interview last week noted that since the problem is one of supply and demand, this bagging facility would not necessarily alleviate the problem of cement shortages.
However, TCL officials say that having the terminal will allow them to stockpile the cement.
Amres also does not believe that the cement supply is as stable as it should be. Readymix is one of the largest suppliers of pre-mixed cement.
Amres admits that more cement is available than two months ago but believes that the current availability of cement is directly related to the heavy rainfall which has prevented large- scale building projects.
Stabroek Business understands that two weeks ago one supplier was able to supply the market with 5000 tonnes of cement and this has brought some stability to the cement supply.
Amres emphasised that it would be another couple of months before the situation is back to normal.