The TCL Group is currently strengthening the cement sector of its business by expanding capacity and optimising its plants and has embarked on setting up cement terminals regionally. It is also introducing new products. Earlier this year its subsidiary, Caribbean Cement Company, based in Jamaica rolled out its type 1P cement product Carib Cement Plus, which has a strong Pozzolan base.
To expand Caribbean Cement Company’s plant operations, it has acquired from The International Finance Corporation (IFC) - the private sector arm of the World Bank - a financing package valued at US$105m, of which US$85m will go toward Carib Cement’s expansion and modernisation programme. Carib Cement will itself generate the remaining one-third of the funds required for the programme.
Last Friday at Jamaica’s Ministry of Finance’s Kingston headquarters, IFC signed an agreement with TCL to provide US$35m in senior and subordinated loans. The World Bank’s financing arm also assisted TCL with financing of US$70m from regional banks. This came in the form of a US$20m loan and US$50m bond issue in Trinidadian dollars.
Speaking at the signing of the agreement at Kingston, IFC’s Caribbean regional manager, Kirk Ifill said: "What the company wanted was a quick commitment for a lot of money that is unsecured at the lowest interest rates for the longest term. That couldn’t fly with the challenges of rising oil prices and so forth prevailing.
Therefore, the challenge was how do we implement the IFC value proposition which provides more than just quick funding, because if that’s what you are looking for there are many other institutions that provide that service. We, therefore got a team from Washington to come to Jamaica and visit the plant. Once there, they came upon a committed team of managers who knew what they were doing and so that was the turning point for us. So we worked with TCL to establish a cost structure that would allow it to compete and also insisted upon environmental standards to be adhered to. Once we went to the market with the deal, which bore the sign of approval of the IFC, the market came back with better terms than it did previously.
Over the last two years Carib Cement has faced increasing competition from imported cement brought in from Thailand and Egypt with the Chinese entering the fray. The company has crossed swords with local import outfit Mainland who maintain that free trade should prevail. Carib Cement countered that it can supply the entire home market and that its capital investment, which creates jobs, should, to some degree, be protected. It proclaims in any event, the imported product is inferior. The Anti-Dumping and Subsidies Commission held in Caribbean Cement Company’s favour and the Government has now imposed heavy duties on imported cement thus protecting the local company’s investment.
