IF Government has its way, Caribbean Cement Company (Carib Cement) will never enjoy a monopoly on local soil again, says Commerce Minister Karl Samuda.

Samuda said the administration is aggressively pushing for a change in Article 83 of the Revised Treaty of Chaguaramas, which governs Caricom trade, to make a provision for a 15 per cent liberalisation of the cement market on a perpetual basis.

“When we look at a monopoly situation, as a Government we do not support monopolies and will never support monopolies,” Samuda told the Business Observer on Friday.

“Monopolies create difficulties for the consumers and because of this, I’ve sought to get the treaty revised so that it can be put in there, a provision for the importation of a percentage so that there can be a secure market for domestic players while at the same time not stifling competition,” he added.

Carib Cement, at a press conference last week, said it took issue with an “inference” made by Samuda that the cement company had agreed to the importation of 15 per cent cement on a perpetual basis. According to Carib Cement, the agreement only covered a specific amount of 120,000 tonnes for 12 months, the same time period allowed in similar agreements prior.

“It is unfortunate that the cement company sought to suggest that I was inferring that Carib Cement had agreed to a compromise of 120,000 tonnes by private importers extending beyond a one-year period,” said the minister in response to the cement manufacturer’s position. “At no stage did I make any reference to that agreement against the background of it having been agreed to extend it beyond one year.

“My reference to 15 per cent provision for the private sector to import cement is based entirely on my philosophy, my view, my commitment to ensuring that there is competition in the marketplace,” he continued, adding that “This competition is essential if we are to protect our consumers because the history of the cement company and its dealings with the Jamaican contracting community has not been a particularly good one and they have in fact subjected the construction industry to tremendous difficulties due to their own carelessness in the supply of cement that was inferior and unsuitable for the industry.”

Carib Cement, Jamaica’s sole cement producer, held a monopoly until 2006 when Government granted a waiver on importations after the company sold defective products to the market. The then PNP administration, in the wake of the fiasco, first granted the waiver to make up the resulting shortfall in the market until upgrades and expansion at the cement manufacturer’s Rockfort plant were complete.

Carib Cement has said that its expansion is now at an advanced stage and the company can satisfy the demand of the local market. But Samuda has repeatedly stated that the company has still not demonstrated that they are prepared to provide the levels of inventory that would give Jamaica protection against the possibility of a cement shortage.

“The cement company has failed to make provisions for the storage of cement beyond a capacity of 40,000 tonnes and this is roughly three weeks’ supply of cement based on current demand. No responsible minister of Government could subject Jamaica to a cement shortage that would result from the cement company not being able to supply it for one reason or another,” reiterated the minister. “We have to be assured that we have adequate supplies that can last for the time that it would take us to order cement and have it landed in Jamaica, failing which the construction industry would be affected leading to the loss of thousands of jobs.”

Against this background, Samuda said the administration sought and received a positive response from the Council for Trade and Economic Development (COTED) to look at the Revised Treaty of Chaguaramas in respect to how domestic supply or regional supply is assessed.

“At the moment, no provision is made for any consideration in respect of inventory and if you’re dealing with a product that is sensitive and that impacts directly on the economy of a country, inventory has to be taken into account,” he said.

And in response to Carib Cement’s argument that the company’s exports of cement for 2010 have thus far outpaced that of imports under the existing duty waiver regime, Samuda said: “It was never intended that all the incentives given to the cement company was given on the basis that they would be manufacturing only for the domestic market. The cement company must get (up) and go and export cement inside the region and outside of the region and not be so dependent on the domestic market.”