Caribbean Cement to expand capacity by 30%
Cemex will be funding a US$30-million ($4.6 billion) upgrade of Caribbean Cement Company’s plant in Kingston, in 2022, to add 30 per cent more capacity at the Rockfort-based facility.
“This we believe will be enough to comfortably supply all the Jamaican market in the coming years, while likely generating some spare capacity for export purposes as well,” said Caribbean Cement General Manager Yago Castro.
The Rockfort plant is the sole manufacturer of cement, but a small portion of the market is supplied from imports.
Castro said the plant upgrade will enable Caribbean Cement to produce more clinker and “finally” unleash the last portion of its cement production capacity drive from 1.0 million tonnes to close to 1.4 million tonnes a year.
Cemex, which controls Caribbean Cement through its direct parent company Trinidad Cement Limited, TCL, said in a release that the deal would benefit shareholders by increasing value, but didn’t go into detail.
“This investment is designed to be accretive and aligned to the company´s climate action goals through the production of low-carbon products,” Cemex said.
It was not immediately clear whether the cash for the upgrade would come in the form of a loan from Cemex or other financing means. Castro did not respond to that query.
In the past, Caribbean Cement has paid an operating lease to TCL, which contributed to the local company struggling to make a profit over an extended period.
Trinidad Cement will in September ask shareholders at the company’s annual general meeting to vote their approval on a proposal to pay royalties not exceeding 4.0 per cent of total sales to parent Cemex for the use of its brands and intellectual property. Caribbean Cement is yet to respond on whether its shareholders will be asked to cast a similar vote.
The investment being made by Cemex would raise the value of Caribbean Cement’s total assets from around US$165 million closer to the US$200 million mark.
Over the April-June quarter, the Rockfort operation earned profit of $1.56 billion, tripling the $520 million recorded in the comparative 2020 period, while quarterly revenue rose to $6.3 billion, compared to $4.8 billion a year earlier.