TCL’S REGIONAL GROWTH

This week’s announcement of the continued growth position of the TCL (Trinidad Cement Limited) Group is an indicator of the expansion of construction taking place in Jamaica, Barbados and Trinidad and Tobago, countries in which Trinidad Cement Limited and its principal subsidiaries are located. The TCL Group, along with two of its majors — Caribbean Cement Company Limited (CCCL) of Jamaica, and Readymix (West Indies) Limited of Trinidad and Tobago — published results this week for the quarter ended March 31, 2004 demonstrating expanded markets.

TCL’s Consolidated Interim Financial Report, for example, for the quarter ended March 31, 2004 has pointed to a 63 percent increase in earnings per share, and has emphasised that this performance has been “driven by buoyant demand for cement in all our domestic markets of Barbados, Trinidad and Tobago and especially Jamaica, where prior period volumes were exceeded by 33 percent.” David Dulal-Whiteway, Group Chairman, stressed in the Chairman’s statement that the Group had produced 15 percent more cement and 19 percent more clinker in the (first) quarter. The Group, meanwhile, is not resting on its proverbial laurels. Instead it is moving ahead with developmental work on the capacity upgrade project at TCL in Trinidad and CCCL in Jamaica, as part of its bid to increase competitiveness “through reduction of operating costs and improved operational efficiencies.”

In Jamaica, where CCCL’s market share has increased to 96 per cent, buoyed by improved operations of its subsidiary, Jamaica Gypsum and Quarries Limited, the country’s Anti-Dumping and Subsidiaries Commission is still to deliver its final ruling on CCCL’s dumping claim which (the ruling) had been originally expected on April 13. This has been put back by up to 90 days and will mean delays by CCCL in negotiating funding for the company’s expansion and modernisation programme. Trinidad Cement Limited had been faced, similarly, in early 1999 with the problem of dumping of foreign cement, an issue settled only after the company had registered a complaint with the Anti-Dumping Unit of the Ministry of Trade and Industry, and an investigation launched into it.

Before the investigation was completed, however, and countervailing duties applied, Trinidad Cement Limited lost millions of dollars in potential revenue. TCL in an effort to compete with the dumped cement had been forced to lower its prices to uneconomic levels to compete with the foreign cement which had been dumped on the market at a cost way below what the producers were charging in their home market. The price of bagged cement in Trinidad, for example, was slashed from $31.23 to $17.83 per 42.5 kg bag, VAT inclusive. Meanwhile, Readymix (West Indies) Limited’s consolidated net profit after taxation in the first quarter was like music to the ears of shareholders, increasing by 122 percent over that for the same period last year, and earnings per share doubled. In turn, the Group’s operating profit improved by 47 percent.

Readymix Chairman, Ernest Williams, hinted that the profit would have been even more shareholder friendly had it not been for the ten-week shutdown of its major project — ALNG Train Four. Another major contributor to Readymix’ strong performance has been Government’s housing thrust. On the other side of the coin, the premixed concrete industry in Barbados, and Readymix’ Barbados subsidiary, Premix and Precast Concrete Incorporated, were slow off the starting blocks this year. The significant improvement which took place in March has been seen by Williams, however, as a pointer to the rest of the financial year. In turn, of critical importance in the TCL Group equation is the regional character and regional interdependence of the Group, factors which, undoubtedly, have contributed to its strength and balance sheet.