‘It will improve security of supplies’
BUYING House Limited, the St James-based distributor of cement, said the recent expansion of production by its parent company Domicem SA will put it in a better position to meet demand in the local market. Domicem, a Dominican Republic-based cement producer, owns 70 per cent of Buying House while the St James, Jamaica-based Cargo Handlers Ltd owns the other 30 per cent.
Domicem, a subsidiary of Colacem SpA (Italy) — a cement producer — commissioned the new US$130-million expansion which doubles capacity at the existing plant to 3.8 million metric tonnes per year. Domicem first entered the Dominican Republic in 2005 with the launch of its first 1.9 million metric tonnes per year production line. The additional capacity makes Domicem the leading producer of cement in the Dominican Republic, ahead of CEMEX Dominicana. The expansion also pushes Domicem toward self-sufficiency in the production of clinker, a material used as a binder in cement. Manufacturers of cement buy clinker for their cement plants in areas where raw ingredients for cement are rare or inaccessible. A release from Domicem shared with the Jamaica Observer by the Embassy of Dominican Republic in Jamaica said the expansion also positions the company to increase exports to new regional markets while fortifying its presence in existing ones.
“This recent expansion, undertaken concurrently with the existing infrastructure, stems from a thorough market survey conducted in the Caribbean and Central America, coupled with a comprehensive feasibility study. This strategic decision positions the Dominican Republic to compete effectively in the regional cement market,” Adriano Brunetti, CEO of Domicem, said at the official ceremony held in late November. The company currently exports products to neighbouring Haiti and Jamaica, and though it indicates a desire to sell products in more markets, it did not explicitly state which ones are targeted now.
Brunetti continued by referring to the production of clinker, stating that: “In the last year, clinker imports into the Dominican Republic exceeded 800,000 metric tonnes. With our new production line, of approximately 1.2 million metric tonnes per year, our country becomes self-sufficient in terms of clinker production, a condition that guarantees stability and sustainability to growth in a crucial sector for any economy, such as cement and construction.”
Mark Hart, chairman of Cargo Handlers, is upbeat about the development. He was an invitee to the official inauguration ceremony in the Dominican Republic.
“That was just to make sure that whatever we are doing in Jamaica is going to have security of supply, and as Jamaica is also experiencing growth and is projecting increasing demand for cement, our local company here is looking to grow alongside the industry,” Hart told the Caribbean Business Report in an interview.
“They want to export more and be able to meet their own domestic demand which is being driven by the country’s incredible growth. The Dominican Republic has really experienced some eye-popping growth. Much of that is being driven by the competitive environment around building materials,” he asserted without expanding. The Dominican Republic has been recording growth close to 5 per cent over the last 50 years and is expected to continue expanding close to that level for the foreseeable future, according to estimates from the International Monetary Fund (IMF).
As for Buying House, the company supplies about 120,ooo metric tonnes of cement to the Jamaican market each year, about 10 per cent of the total market with the rest supplied by the local producer, Caribbean Cement Company. Hart said Buying House supplies cement to various large projects and hardwares mostly in western Jamaica where the company is located.
“We are actually supplying the Hard Rock hotel, the Princess hotel and the [Montego Bay] perimeter road, and a lot of these people are saying that the quality is very, very high,” he added. Though Hart said Buying House is looking to grow supply with the market, he added that the company is not looking to displace local manufacturing, even though he expressed concerns about the level of protection offered to the local producer.
“What we are doing takes off 6,000 trips of articulated tractor trailers going around the country,” he said as he argues that importing Domicem cement through his Cargo Handlers’ port in Montego Bay reduces the need to make 3,000 round trips with cement from the Caribbean Cement Company plant in Rockfort, Kingston. Earlier this year, Hart announced plans to establish a new US$8-million cement terminal at the port in Montego Bay, St James, with construction originally scheduled to “commence later in 2023.” However, he told the Caribbean Business Report that project is still being evaluated to see if it is viable and offered no timeline when the project may be executed.
Caribbean Cement itself underwent expansion in recent years, increasing its capacity by 30 per cent through an investment of approximately US$40 million that it said will strengthen Jamaica’s self-sufficiency for cement, “while setting the basis to export and reinforce our ability to serve the growing construction sector in Jamaica and the Caribbean,” its Chairman Parris Lyew-Ayee wrote in the company’s most recent annual report. The company recently re-entered the export market with over 3,500 metric tonnes of excess cement sold to the Turks and Caicos in recent months.