Cement shortage triggers call from west for supply optionsSunday, August 08, 2021
BY HORACE HINES
MONTEGO BAY, St James — Fed up with the recurring shortage of cement from the island's major supplier, Caribbean Cement Company Limited (CCCL), a number of stakeholders in the construction industry in western Jamaica have intensified their calls on Government to introduce an alternative supplier in the market, arguing that the key element in the sector should not be placed in one proverbial basket.
For the last 15 years, Montego Bay company Buying House Cement has been importing the product to meet 10 per cent of the demand from the Domicem cement plant in the Dominican Republic.
When the Jamaica Observer contacted Mark Hart, chairman of Cargo Handlers, a publicly listed company with 30 per cent shares in Buying House Cement, he said that if given the go-ahead from the Government, the company is willing to supplement any dearth in the supply of cement.
“We are in a construction boom right now. Obviously, to have people not being able to get the thing that they need most to carry out their business and employ thousands of people is a big risk for the construction industry. We are doing our best to provide some security of supply and stability of pricing by having at least one other product in the market. And if we are given the green light we can provide more cement to stabilise any shortages,” Hart told the Sunday Observer.
However, he was quick to point out that Buying House Cement is not looking to displace CCCL as a local producer.
“We are simply looking to provide some other alternative and a competitive market. Even though the cement company supplies around 90 per cent of cement and Buying House is around 10 per cent, we would prefer to see that close to about 15 per cent,” he argued.
“We are on a quota system so basically it's 120,000 tonnes per year, but it is broken up in quarters. And, depending on what is happening with the market, from time to time we will request to bring in additional to support the production problems and the supply problems,” Hart added.
Late last week a hardware store operator in western Jamaica, who did not wish for his identity to be revealed, argued that his business has been hard hit by a shortage of the product since last month and that he has only been able to stay afloat after securing the vital building material from Buying House.
“It is obvious that they [CCCL] can't handle the demand; the only other way out is to expand or to give another competitor some way of bringing it in. The Government will have to do that anyway. Thank God I have been able to get [cement] from the other source, so that is helping me to somewhat alleviate some of the problems. That is really what is helping out right now,” he said.
The shortage, he argued, “hampers the growth of the country because construction is one of our mainstays right now. By and large it is one of the areas that continues to grow, so with the shortage of this product — which I call the foundation product because there is hardly anything you can do without cement — you have to start with it from foundation up.”
In Trelawny, Oliver Warren, managing director of OW Hardware and Construction, said while competition in the marketplace is good he has to commend Carib Cement for its steady supply throughout the novel coronavirus pandemic, aside from the two recent episodes of shortage of the product which, on each occasion, resulted in a 50 per cent reduction in his business.
“Competition is always good, it always makes a better service, but in truth and in fact the people grow with Carib and the only company they know is Carib. Other companies are there because they have a company which bring in other cement, but their percentage is little to supply so we are having problem,” Warren told the Sunday Observer.
He was, however, unhappy with what he said was a lack of communication from the cement company during the recent shortage.
“...They don't explain the reason for the shortage, they just have the shortage. That is our problem. If they just explain the problem... because their service is always good, trust me, but we can't be their main customer and shortage just appear so and we don't know what's happening. That is the only problem we have with them because their service always good throughout COVID. We never have any problem with them supplying us,” the Trelawny businessman said.
On Wednesday, another player in the sector argued that had it not been for Buying House his concrete business would grind to a screeching halt as he has not been able to source the product from Carib Cement for more than two weeks.
“I am getting cement from Buying House right now. I can't get anything from Carib. The shortage, however, does affect me when Buying House don't have any. Remember that Buying House has a limited quota per month so when Buying House is out, then it does affect me. I am not sure if they have any now but I know that they get a little more frequent than before, so that is a kind of a plus. They could get a bigger quota, based on the demand for cement right now,” said the operator of the concrete mix company who spoke to the Sunday Observer on condition of anonymity.
When contacted, Chad Bryan, communication and social impact coordinator at Carib Cement, explained that logistics issues were behind the delay in the delivery of cement. He noted that some of the issues have since been addressed.
“Based on what I know, we had some logistics issues getting the cement out. They exist and we know, but we want to assure the customers that we are making every effort to get it out to them as soon as possible,” Bryan explained.
Meanwhile, Hart argued that his company's supply of cement in western Jamaica reduces the impact attrition of the road due to trucking from across the country.
“We have been providing employment and support to Montego Bay for about 60 stevedores and also a lot of trucking for truckers on this side of the island. And, of course, having the cement coming by ship to the port in Montego Bay helps to relieve the road system from having to bring cement all the way across the island on our roads, which at times end up as a safety problem and also puts wear and tear on the road,” Hart argued.