-general manager says Jagdeo’s assertions questionable
By Mark McGowan
In Trinidad and Tobago
General Manager of Trinidad Cement Limited (TCL), Satnarine Bachew has refuted recent assertions by President Bharrat Jagdeo that the TCL Group wants to maintain a regional monopoly while it is unable to supply quality cement to meet the region’s markets.
During a meeting with a pool of local journalists at the TCL plant in Trinidad, Bachew, when asked to respond to the recent statements by the President, said that they were “questionable” since there was no evidence to support the claims. He, however, emphasized that the TCL Group values the Guyanese market and intends to recapture it.
“Firstly we do not want to maintain any monopoly. We want to be the preferred supplier of cement in the region,” he said. “We have the capacity. We can supply. We do not have any quality issues. We make cement to international standards… so a lot of those statements are questionable,” he added.
“They cannot be verified anywhere,” Bachew added. “If there were complaints about [the] quality of cement, [they] would reach our offices; [they] would be documented, as part of our ISO procedures.” He said TCL was audited on Wednesday and given “a clean bill of health”. He also stated that the cement produced by the group is tested internally and is regularly tested by the US-CTL lab.
At a news conference last Thursday, Jagdeo, while calling for the Common External Tariff (CET) to be removed from cement, said that TCL wanted to maintain a position of monopoly but could not supply the market’s demands. He also questioned the quality of cement produced by the company, and said he had received reports of local persons being supplied with “lumpy cement”. The Head of State, however, added that he was yet to verify this information first-hand.
Bachew said the TCL Group was yet to receive any official complaint from Guyana regarding the quality of cement it received. However, he noted that “lumpy cement” is caused by mixture with water and this is almost always due to the manner in which the cement is stored after leaving the TCL plants. He said that the TCL Group had engaged in a widespread campaign to educate the populace about cement.
Addressing the contentious issue of the CET on cement, Bachew said the matter was not one of being “protected by the CET” but “about operating in a rules-based trade environment”. He said it was about adhering to the Revised Treaty of Chaguaramas, which clearly states the need for tariff and non-tariff barriers. He further stated that if the regional industries were to be developed, the rules had to be enforced.
Should the CET be withdrawn, TCL can compete with other markets providing that there is “a level playing field”, the General Manager asserted. He said issues such as the type and quality of cement on the market and anti-dumping needed to be settled. He further noted that the cement entering from other territories had advantages when being sold in the region and reaped great foreign exchange for these countries. He identified the Colombian brand ‘Argos’ and said it came from a free-zone area without taxes or duties. He said that Chinese cement is also highly subsidized and when sold in the Caribbean market was a huge earner of foreign exchange for that country.
Bachew, however, was clearly not in favour of the CET being removed. “Why is it so many economies now are struggling for foreign exchange and yet still, we want to encourage importation when we should be reducing that?” he asked rhetorically. “Why do we want to leave duties on the table, when governments are fighting for revenue right now and these are hard questions that we need to ask and answer,” he added.
He opined that revoking the CET would be encouraging an outflow of foreign exchange. “Every single country in Caricom has a foreign exchange problem,” he added.
Bachew noted that while the TCL Group has the capability to produce 3.4 million metric tonnes of cement per year, the Caricom market only uses 2.2 million metric tonnes. According to him, the failure of the cement company to operate at its full capacity is affecting the profitability of the company. With the effect of the global crisis being felt in the region, Bachew pointed out, there has been a decline in regional markets.
He said markets in Trinidad and Tobago, Jamaica and Barbados declined by 10 per cent, 15 per cent and 20 per cent respectively.
When asked how soon the company expected a full recovery in its position, he said that based on predictions, 2011-2012 might be the earliest it could expect “some kind of recovery” where it would be in a position like it was in 2008, when the company was peaking.
Questioned about the importance of the Guyanese market, he said that this particular market “is extremely important to TCL” and noted that it was once its biggest market.
While noting that in recent years there has been a decline in the Guyana market, he announced that that the company intends to recapture this market since it had both the capacity and quality of cement to do so.
He noted that Guyana’s market capacity is 130,000 tonnes of cement per year. Last year, the company supplied about 70 per cent of this amount but is currently supplying far less than that, Bachew noted.
TCL organized an all-expenses paid tour for Guyanese journalists to inspect its capacity in the region.
