No waiving of CET once cement supply, prices stabilise -Prashad
Stabroek News
April 20, 2007
Stable cement supplies and prices will dissuade the government from reverting to waiving the Common External Tariff (CET), Tourism, Industry and Commerce Minister Manniram Prashad said on Wednesday.
For the last three years the government has consistently renewed the CET waiver on cement, to encourage extra-regional cement imports. This move came after long-time regional supplier Trinidad Cement Limited (TCL) experienced difficulties in supplying the local market in the light of the construction boom at the time.
Prashad, during a visit to the newly constructed US$9.3M - US$10M TCL Guyana Inc (TGI) bagging terminal, said he was "looking forward for this plant providing all the cement we can use in Guyana." TGI is located in the compound of the Guyana National Industrial Company Incorporated (GNIC). The minister said that the facility should lead to price stability and reliability so the government will not have to revert to waiving the CET. TCL has, over the years, advocated for the removal of the CET waiver.
The local market is currently supplied with cement from Venezuela and Colombia and large hardware stores like Gafoor's have imported cement, under the CET waiver, and companies like Fidelity Investment Inc, since 2005, have imported a few thousand tonnes of Venezuelan cement monthly. The price of cement, which now retails at an average cost of $1700 per sack in the city and as much as $1950 in outlying areas, did not escape the minister and he asked TGI to ensure stable prices.
Stabroek News observed that although the wholesale price of cement has dropped at city locations; the addition of the Value-Added Tax (VAT) has contributed to maintaining high prices. Prashad said the stability of cement is important since more construction within the hospitality industry namely more hotels being built, and capital works like bridges and roads will require a reliable and stable supply of the aggregate.
TGI Plant Manager Mark Bender told this newspaper that the bagging terminal, with its maximum packing capacity of 250,000 tonnes per year, can supply the nation's cement demand and is capable of bagging 1400 bags per hour. TGI has three silos with a combined capacity of 6000 tonnes and the bond has a further capacity of 2000 tonnes. Bender said Guyana utilizes over 120,000 tonnes of cement per year and "at any time" they can meet the nation's demand. He also said that TCL supplies over 50% of the local cement, but further market growth is expected. Guyana is among TCL's largest markets, outside Barbados, Jamaica and Trinidad and Tobago, and TCL once enjoyed a monopoly here.
Through GNIC, TCL supplies Suriname with cement and GNIC Chief Executive Officer Clinton Williams said that 2200 tonnes of cement was transported to that country for a bagging facility. This facility is privately owned and has two silos with a 3000-tonne capacity and currently receives some 90,000 tonnes of TCL cement per year. This yearly total is expected to increase to over 100,000 tonnes.
At the end of the tour Prashad said the company delivered on its commitment to building a modern plant. He also noted that the ministry has received no environment-related complaints about it so far.