Central America & the Caribbean - Regional cement focus

The Central American countries and those of the Caribbean archipelago have a rich and varied history, evident today in their different political systems, languages and cultures. The region has been heavily influenced by cultures from sub-Saharan Africa and the European powers of Spain, Great Britain, France and the Netherlands, who colonised the region from the 1500s onwards. Many of the countries' modern economies rely on exports of primary resources (such as foodstuffs) and tourism, especially in the Caribbean, although many countries now take a significant income from the services sector.

The region's cement industries are predominantly local but can have complex trading patterns. Many nations are too small to support integrated facilities and import from larger neighbours. Indeed, only 13 of the 32 territories covered in this review have integrated cement plants. Here Global Cement Magazine looks at 12 of those 13 producers. Costa Rica is covered in more detail from page 50 onwards.

Above: Map of cement plants Central America and Caribbean islands. Federal Dependencies of Venezuela (not covered by this review) and uninhabited islands not shown. (click to open full size PDF version)

Barbados

Barbados is a small island in the extreme east of the Caribbean archipelago. The country gained independence from Great Britain in 1966 and has since transformed itself from a primary economy dependent on sugar-cane exports to one based on the services sector, particularly off-shore services and tourism. It has one of the highest standards of living of the Caribbean islands, with a GDP comparable to many European nations.

Cement industry

Barbados' sole cement production plant is Arawak Cement, which was built as a turnkey contract by Austria's Voest-Alpine and began operation in 1984. The plant at St. Lucy operated between mid-1984 and 1991, when the prevailing economics forced the decision to close the kiln at the facility.¹

St. Lucy subsequently operated as a grinding plant for three years until 1994, when it was taken over by Trinidad and Tobago's Trinidad Cement Ltd (TCL). TCL set about rejuvenating the plant with a US$7m kiln renovation project.

In 1997 the kiln, with a 0.35Mt/yr capacity, was restarted. It continues to supply the Baijan market and its Caribbean neighbours, near and far. It supplies governments and individual companies in Anguilla, Antigua, British Virgin Islands, Dominica, Grenada, Guyana, Monserrat, St. Kitts, St. Lucia, St. Martin/Maartin, St. Vincent, Suriname and the US Virgin Islands.

Current situation

Arawak has recently found itself under intense production pressure due to a prolonged employment dispute at the main TCL plant in Trinidad & Tobago, which necessitated export of cement to plug the gap in that country.

Before the recent dispute, in late 2011, Arawak announced that it would increase its cement prices from 1 January 2012.² For the local market, the cost for a 42.5kg bag for 'authorised distributors' increased to US$9.58, an increase of US$0.83/bag. The non-distributor price increased by US$0.87/bag to US$10.01/bag.

It increased semi-bulk cement prices by US$12.74/t to US$148.30, while bulk moved to US$133.33/t, an increase of US$20.75/t. Arawak was keen to point out that prices from retailers could not be managed by the company, as such prices would always be influenced by (very) local supply and demand.

The company's eagerness to detach itself from the retail prices of cement is that it has not always been so clear with its pricing. In 2008 it was accused of unfair pricing in relation to the Fair Competition Act.³ Arawak was accused of charging different prices for different groups of customers to prevent competition, with non-distributors (ie: building firms/manufacturers) losing out to dealers. The company agreed to standardise the prices and the case was closed in April 2009.

Cuba

A socialist state since its 1959 revolution, the island nation of Cuba used to represent an outpost of Communism, surrounded by free-market neighbours and just 60 miles from the United States. It endured a period of uncertainty and shortages following the collapse of the Soviet Union in 1991 but has since found new allies in China⁴ and new socialist regimes in South America.

Although 87% of the Cuban economy is controlled by the state, the private sector increased in size following the resignation of leader Fidel Castro in 2009.

Cement industry

Cuba has a special place in the Latin American cement industry, being the first country in the region to produce cement. With production up and running in 1895, it beat Brazil, the region's modern-day cement giant, by two years.⁵

Following the 1959 revolution the industry came under the control of the government and cement imports, mainly from the United States, ceased due to US-led sanctions. It is likely that the country imported cement from the Soviet Union during this time. Production statistics were not made globally available again until 1983.⁵

Between 1983 and 1996 production dropped from 3.0-3.8Mt/yr to 1.8Mt/yr. Since then it has roughly stabilised at that point, although consumption is not as high as production.⁵ Indeed, during the mid-1990s the region had the perverse situation of a cement oversupply in Cuba and a desperate demand for more cement in the US. The sanctions prevented efficient distribution of many goods.

Current situation

Today the cement industry in Cuba is controlled, like much of the economy, directly by the government. Its production stock is old and production is limited by sanctions that prevent new projects, along with a lack of political will.

There are six integrated cement plants in Cuba. Four of the six are wet production lines, betraying the age of the plants, and although they have a combined capacity of over 5.5Mt/yr,⁶ it is clear that the plants are operating far from this level at present. This situation dates back almost 20 years.⁵

Four of the six plants are operated by Corporacion Cementos Cubanos, the national producer, with one relatively modern Cuban-run plant, Cementos Cienfuegos, and another, Cementos Curazao, which is 50%-owned by Mexico's Cemex. The formation of Cementos Curazao, which took over a plant manufactured in 1918, was necessary for Cemex to comply with the US-led sanctions.

Because it has overcapacity, Cuba looks to offload cement to its neighbours, although this is not always possible due to long-established political tensions. Small amounts of cement have recently been donated by Cuba to Venezuela, in one case to re-build the homes destroyed by mudslides in that country.⁷

The country's overcapacity has also come in useful in nearby market-based economies, like Jamaica, which received much-needed cement when its domestic supplies ran dry in 2006.⁸

Dominican Republic

The Dominican Republic occupies roughly-two thirds of the island of Hispanola, which it shares with Haiti. The country is a representative democracy with national powers divided among independent executive, legislative and judicial branches.

The country's economy, once dependent on sugar exports, is now geared strongly towards the service sector. The country has one of the most developed telecommunications systems in the region and has become the most popular Caribbean tourist destination due to its long stretches of unspoilt beaches and beautiful interior.

While the Dominican Republic is an upper middle income country according to World Bank GDP/capita definitions, income inequality is marked, resulting in relatively high levels of crime. Corruption is also a persistent problem and immigration from neighbouring Haiti remains a contentious issue.

Cement industry

The Dominican Republic has three integrated cement plants, two of which are operated by local producers, Domicem and Cementos Cibao, and the Dominican arm of Mexico's Cemex, Cemex Dominicana.⁶

The Domicem plant, owned by Cementos del Bueno, is the relatively recent result of a collaboration between a group of Dominican and Italian investors. Keen to move Dominican cement production into the 21st Century, they set about planning and constructing the plant on the country's south coast in 1999.⁹

The 1.1Mt/yr cement plant project was the first overseas turnkey project carried out by China's Sinoma / CBMI Construction.¹⁰ It is one of the most modern in the Caribbean and began production on schedule in October 2005. Domicem also operates a cement storage facility in Port-au-Prince in Haiti and a terminal at Kingston, Jamaica.

Incorporated in 1964, Cementos Cibao was unable to be developed until 1973 due to political instability in the country.¹¹ The plant, which included two wet cement kilns from a Lafarge facility in Canada, was installed by the end of 1979. Upgrades in 1985, 1987 and 2008 have seen the two wet kilns joined by a further wet kiln and a dry kiln, taking the plant's capacity to 2Mt/yr.

Cemex has been in the Dominican Republic since 1995, when it purchased a domestic producer, Cementos Nacionales.¹² The acquisition was the Mexican firm's first foray into the Caribbean and today it has a 2.6Mt/yr integrated cement plant. The plant, in San Pedro de Macoris in the south west, is close to many of the country's main cement-hungry markets and is served by two marine terminals and two land distribution points.

Current situation

The Dominican cement industry is currently the largest exporter of cement in the Caribbean. It exported 0.70Mt of cement in the first half of 2012, a third more than it did in the first half of 2011 when it exported 0.52Mt. The cement primarily heads to Jamaica, the Virgin Islands and Guyana, although Haiti, which is still undergoing reconstruction due to the January 2010 earthquake disaster that struck that country, is the dominant consumer.

This export capacity earns significant foreign revenue for the nation but is due to a mis-match between supply at around 6Mt/yr (capacity)⁶ and demand of around 2.7Mt/yr (2010).¹³ Capacity utilisation in the Dominican Republic is as low as 65%.¹⁴

Demand for cement is currently subdued in the country, despite attempts by the government to stimulate development of new buildings. Local commentators have complained that despite large numbers of housing projects, the properties that result are often unaffordable for mass occupation and have created a false impression of construction activity.

El Salvador

Sandwiched between Guatemala and Honduras, El Salvador is the smallest country in the continental Americas at just 142km (north to south) by 270km (east to west). The country is a presidential representative democratic republic.

A former Spanish colony, El Salvador has gained stability since a civil war that ended in 1992 and despite its size, now has the third largest economy in Central America after Costa Rica and Panama. The adoption of the US Dollar as the country's sole currency has aided stability.

Cement industry

The cement industry in El Salvador is dominated by one producer, Holcim El Salvador, in which the Swiss cement producer Holcim has a 90% stake. The former Cementos de El Salvador was formally renamed in April 2010 following a 12 year process in which Holcim initially bought a 20% stake of the company.15

The original Cementos de El Salvador was formed in 1949 to exploit the country's natural limestone. It began production in 1953 at the now defunct Playa las Flores plant in Acajutla. A second plant was built between 1965 and 1970 at El Ronco and the current Maya plant was acquired in 1993.

Current situation

The two Holcim plants generally provide enough cement for El Salvador's domestic demand, with consumption and demand closely matched at roughly 1Mt/yr.¹⁶ This level is lower than those seen at the start of the 2000s, when earthquake reconstruction in 2001 caused a spike in demand.

Cement consumption often spikes in the country due to increasingly common flood disasters. Notable extreme floods were seen in 2009 and late 2011, prompting the environment and natural resources minister, Herman Rosa, to say that extreme floods were 'the new normal,' due to climate change effects.¹⁷ In November 2011 Rosa lamented that El Salvador was falling behind other nations with protection for extreme weather conditions. Often requiring large amounts of concrete, flood defenses are potentially an area that the cement industry could help to develop.

Guatemala

The Republic of Guatemala is a representative democracy in Central America. It borders Mexico to the north west, Belize to the north east, and El Salvador and Honduras to the south east.

The country was ruled by the Spanish until 1821 and was part of the Mexican Empire until that union broke apart due to war (1835-1840). In the 20th Century Guatemala endured a bloody civil war that started in 1960 between the right-leaning government and socialist insurgents supported by Cuba.

A peace treaty was signed in 1996 but the violence is still very prevalent. There have been an average of 98 murders per week since the end of the war,¹⁸ many due to ongoing tensions between the two sides, but many resulting from wealth inequality. Guatemala has the second-highest levels of inequality in the region.¹⁹

Cement industry

The Guatemalan cement industry comprises three plants that are all operated by Cementos Progreso SA.⁶ The company has been in business since 1899. Progreso produced its first cement in 1901 from its La Finca La Pedrera plant in the capital, Guatemala City.²⁰

The plant operated as the country's only cement plant for nearly three quarters of a century and was only joined by the San Miguel plant in Sanarate in 1974.

Rising demand through the 1970s and 1980s prompted capacity addition at San Miguel, with a second and third line added in 1979 and 1998. Further investment has since come from Holcim, which bought a 20% stake in Progreso in 2000.

Current situation

Cementos Progreso is currently completing work on its third plant, located at San Juan in the east of the country. Under construction since 2008, it is scheduled to be completed by the end of 2012 and will hit 5Mt/yr once commissioned.

Germany's Polysius will supply the plant on a turnkey construction basis.²¹ The main Polysius components are: a Quadropol roller mill for 375t/hr raw meal output, a five-stage Dopol 90 preheater with Polro rotary kiln and Polytrack clinker cooler.

The San Juan plant will shift the cement bias of Guatemala considerably and will more than remove the need to import cement from Guatemala's neighbours, which provided 0.4Mt/yr to the country in 2007, the most of any country in the region,²² although economic growth, and hence demand for cement, has been dampened since the San Juan plant was approved. The economy grew by 6.3% in 2007, by 3.3% in 2008, but by just 0.5% in 2009.²³ In 2010 the economy grew by 2.9% and in 2011 it reached 3.9%, suggesting that the appetite for new constructions has returned.

Haiti

Haiti occupies the western third of the island of Hispnola, which it shares with its larger and wealthier neighbour, the Dominican Republic. The two countries have a complex history, which involved occupation by Haiti of the Dominican Republic in the 1800s. Today, however, it is Haiti that is economically and politically behind. Its position as the poorest country in the Americas was reinforced in January 2010, when the capital Port-au-Prince suffered extensive damage in a 7.0-magnitude earthquake.

Cement industry

The only cement plant in Haiti, the Fond Mombin plant in Aubry, is approximately 30km by road from the capital Port-au-Prince. It is owned by Switzerland's Holcim, Colombian construction group Argos, local investors and the Haitian government.²⁴

The plant began production in 1952 as Cement Haiti SAM, with an installed capacity of 0.1Mt/yr from one wet process cement kiln.²⁵ It underwent the addition of a second wet line in 1973, which took capacity to 0.3Mt/yr, although the plant was closed due to prevailing economic conditions in 1992.

After sitting idle for five years the plant was restarted in 1997 following the Public Enterprises Modernisation Act in September 1996. A new company, Cimenterie Nationale, was formed to restart and upgrade the existing Fond Mombin site.

Following tests on imported clinker, which still come to the country from outside, the 'Cimenterie Nationale' plant was officially opened in 2001. It now has a capacity of 0.5Mt/yr.

Current situation

Since the 2010 earthquake, aid pledges have reached US$4.6bn,ⁱ although long-lasting redevelopment of the country will take decades rather than years. Presently much cement is still imported from abroad for reconstruction.

Although Haiti is blessed with natural limestone, a lack of cement production capacity and poor infrastructure prevent much of it from being converted into cement domestically at present. In the short term further cement plant projects will inevitably take a back seat in light of higher-priority goals involving the redevelopment of the country.

Honduras

Honduras is bordered by Guatemala and El Salvador to the west and by Nicaragua to the south east. A colony of Spain until 1821, the land that forms modern-day Honduras was briefly part of the Mexican Empire. It became a republic in 1838, although political uprisings have marred the country since that time.

In 2009 there was widespread condemnation from the international community after a coup-d'etat ousted President Manuel Zelaya after a constitutional crisis in the country. Civil liberties were temporarily suspended by the interim government and few foreign governments have recognised the new president.

Today, Honduras is one of the poorest nations in the Americas, above only Haiti and its southern neighbour Nicaragua in GDP/capita terms.

Cement industry

Honduras has a cement duopoly, with a local Lafarge unit and domestic firm Cementos del Norte as the two producers.

The Cementos del Norte plant was the first to be built and was constructed in 1958 under the auspices of Cementos de Honduras.²⁶ In 1981 the company was nationalised, before re-privatisation in 1992 as Cementos del Norte S.A. In 1997 it entered into a strategic alliance with Guatemala's Cementos Progreso.

The Lafarge plant, which is located in Piedras Azules in Comayagua, traces its history back to 1978, when it was proposed by the local state-owned company Incehsa.²⁷ The plant, originally set up to supply the El Cajon hydroelectric dam with 0.45Mt of cement, began production in 1981 and was privatised 10 years later in 1991.

In 1997 French building materials giant Lafarge became the main shareholder of the company with a 53% stake. Renaming of the company to reflect Lafarge's position was completed in November 2006.

Current situation

The Honduran cement industry is experiencing a period of expansion at the moment, with an 85% expansion in consumption from 1.31Mt/yr in 2004 to 2.42Mt/yr in 2011.²⁸ The increase has been strongly driven by private construction firms. The nation's installed capacity is similar to this value at 2.75Mt/yr.⁶ This match is fortunate considering that the government currently forbids cement imports from the Dominican Republic, the region's main cement exporting country.²⁹

Jamaica

Jamaica is an island nation in the Caribbean, 230km long by 80km. It is located 145km south of Cuba. In 2012 the country is celebrating 50 years of independence from Great Britain, although the British Queen, Elizabeth II, remains head of state.

The Jamaican economy is diverse but relies on the service sector to the tune of 65%. Despite a strong tourist market, the past five years have seen the country's economy shrink. Having grown by 0.6% in 2007, the economy shrank by 1.7% in 2008, shrank by 2.6% in 2009 and shrank by 0.6% in 2010 before returning to growth of 1.3% in 2011. Lower alumina and bauxite exports, which historically provided 10% of remittances, were broadly to blame for this slump.

Cement industry

Jamaica currently has one integrated cement plant, which is located near to the capital, Kingston. It is operated by Caribbean Cement Company (CCC), which itself is owned and operated as a subsidiary of Trinidad's TCL Group.

CCC has been producing cement since 1952, when it was commissioned to supply the Jamaican cement market and remove its dependency on cement imports, which had been badly disrupted during the Second World War. CCC claims that 90% of all structures in Jamaica were built using its cement.³⁰

The CCC plant was positioned at Rockfort due to the abundance of cement-making resources, all of which are found within a 15km radius. CCC operates Jamaica Gypsum & Quarries as a subsidiary for captive supply of gypsum and other ingredients.³⁰

CCC will soon be joined on the island by another cement plant. The Cement Jamaica Ltd. Port Esquivel plant, owned by Canada's Cemcorp, was announced in April 2012.31 The US$340m project aims to commission in mid-2014 and has permits for construction of the cement plant and a coal-fired power plant.

Although Cemcorp CEO Armand Nahmiache said that the company had 'no interest in a tussle for local market share,' he pointed out the potential for domestic consumption and exports. He said that the presence of the company in the region could only be good for competition.

Nahmiache said that in the first year of operation Cemcorp would produce about 0.9Mt of cement at the Cement Jamaica plant and that it had a 'guaranteed' export market for 75% of that amount. The rest of the cement will be offered to the Jamaican market. Local importers, builders associations and trade groups have welcomed the promise of the new plant.

Current situation

In 2010 a kiln upgrade brought the CCC plant's capacity to 2Mt/yr, although the past three years have all seen relatively low levels of production. CCC produced 736,560t of cement in 2009, 723,489t in 2010 and 766,274t in 2011. It is clear that the plant's potential is not currently being realised in the market, using only around 37% of its installed capacity in 2011.³¹

In addition to poor capacity utilisation the company is not performing well from a financial standpoint. Its operating loss in the first quarter of 2012 came to US$5.32m, following a full year net loss of US$29.3m in 2011. In the second quarter of 2012, the company's position improved marginally as it lost US$2.2m.

The company identified that exports to Trinidad & Tobago (to prop up supply there after a strike at TCL's parent plant in that country), had been a positive influence on its balance sheet during the second quarter. CCC said that the effects of efficiency savings that it was making in 2012 would be seen in early 2013.

CCC will see a return to a positive balance as essential if it is to meaningfully compete with Cement Jamaica in 2014. The presence of a new player on the island, especially one with such a large export capacity, will damage the company's position. CCC has been able to export cement to other islands in the past, occasionally receiving anti-dumping citations, as was the case with the Dominican Republic in May 2011.³²

Like many cement firms, CCC has been struggling to maintain margins in the face of increased fuel and production costs. On 1 June 2012 it increased cement prices by 9.2%, taking a 50kg bag to US$8.54, although bulk cement from the company is still cheaper than that in the local cement producing countries of Mexico, Colombia, the Dominican Republic, Barbados and Trinidad & Tobago.³³

Nicaragua

The Republic of Nicaragua is a presidential representative democratic republic and is the largest country in Central America. A former Spanish colony, the modern-day country was occupied by the United States from 1912 to 1933. Following the withdrawal of the US, the country has see-sawed between military dictatorships and periods of revolution.

Nicaragua's current president is the socialist Daniel Ortega, who underwent training in post-revolution Cuba. Formerly in power in the mid to late 1980s his second presidency has seen the introduction of a raft of leftist reforms. Nicaragua is the second poorest country in the Americas, ahead of only Haiti in GDP/capita terms. Political tension and crime are both high.

Cement industry

Nicaragua is primarily a retail cement market, with a broad user base. The country has a single cement plant, located close to the capital Managua in San Rafael del Sur.6 The plant began operations in 1942 as Compañía Nacional Productora de Cemento CANAL.³⁴

The plant was leased by the Nicaraguan government in 2001 to Mexican cement producer Cemex, for a period of 25 years.

Current situation

Cemex has now controlled operations at the San Rafael del Sur plant for 11 years and has made great strides in improving health and safety, updating production processes and efficiency (introducing new burners even though the plant still operates wet kilns) and improved environmental performance with the introduction of electrostatic filters. It has introduced oil and biomass to the kilns to partially mitigate CO2 emissions.³⁴

Panama

Panama, world famous for its canal, is the southern-most country in Central America and shares land borders with Colombia in the south east and Costa Rica in the north west. Like many of its neighbours, it was colonised by Spain (until 1821) and was occupied by Colombia until declaring independence in 1903.

Today, following a series of military regimes, Panama is a presidential representative democratic republic and has been growing rapidly. It has the highest GDP/capita ratio in Central America.

Much of the country's wealth is driven by the Panama canal, which was transferred to the Panama government from US control in 1999. The canal has contributed greatly to the development of Panama over the years. The construction of parallel locks has created an increased demand for building materials, particularly cement, to the benefit of the local Cemex operation, and will enable the canal to make US$2-3bn/yr in profit for the country once it is completed.³⁵

Cement industry

Panama has one integrated cement facility, which is currently operated by Mexico's Cemex.⁶ The Cemex plant, known as Bayano, was built on a turnkey basis by the Danish cement plant manufacturer FLSmidth on behalf of the Panamanian government in 1978.³⁷

In 1994 Cemex acquired a majority stake in the company. Within two years it had introduced efficiency measures, upgraded to using petcoke in the kiln and undertook one of the group's first automation systems installations anywhere in the world.

There used to be a second Panamanian cement plant, opened in 1942 by Cemento Panamá. The plant was the first to produce cement in Panama but was converted into a grinding plant in 2001. It is now run by Cementos Argos from Colombia.

Throughout the rest of the 1990s Cemex secured increasingly high levels of certification for the plant's products and that of its 15 new readymix concrete plants. It used its new capabilities to secure lucrative contracts for infrastructure projects, including an exclusive deal to supply all maintenance concrete for the Panama Canal, which it was awarded in 1999.

In 2003 Cemex overhauled the Bayano plant's dust control systems and new mills and kiln upgrades have since taken the plant's capacity to over 2Mt/yr.

Current situation

Cemex Panama is currently engaged in the supply of cement to Panama City's first Metro line and the Panama Canal expansion project, which is building parallel locks and widening and deepening channels so that more vessels can use the route at any one time.³⁸

The company won the contract, for 0.5Mt of cement, in 2010, although the project began in 2007. The project is expected to be completed by the end of 2014, with a doubling of the capacity of the canal. However, there is increasing expectation that it will not be commercially operational until early 2015.³⁹ This demand has resulted in record cement sales for Cemex in Panama so far in 2012. The company enjoyed double-digit growth year-on-year.⁴⁰

Unlike some cement producing nations in the region, Panama is in the process of importing cement, in part to make up the portion of its own Cemex production that is being used for major infrastructure. In 2009 it benefited from the overcapacity in Florida, USA, ordering material from Titan America for construction of a hydroelectric dam.⁴¹

Looking into the short- to medium-term future, the Panamanian cement industy will continue to be buoyed by construction of the expanded Panama Canal, associated dams and other large governmental infrastructure projects. The wealth that the improved canal will bring will help to stimulate further general economic growth in the country, which in turn will increase cement demand.

Puerto Rico (USA)

The Commonwealth of Puerto Rico is situated on an island in the Caribbean archipelago, approximately 100km to the east of the island of Hispanola and less than 50km to the west of the Virgin Islands.

The territory was ceded to the US by the Spain as a result of the Spanish-American war and internal self government was achieved in 1952. Puerto Rico remains a US Commonwealth territory of the US despite numerous referenda throughout the 20th Century. The US President, Barack Obama, is the head of state but day-to-day governmental operations are conducted at local level by an elected head of government.

Having been based heavily on primary production in the past, the industrial sector overtook this in 2011. Tourism is also important. Unemployment hit 16% in 2011 and crime, specifically that related to drug-trafficking, is a large problem due to Puerto Rico's proximity to other Caribbean islands and its relationship with the US.

Cement industry

Puerto Rico has two integrated cement plants that support its four million inhabitants, with a combined cement capacity of 2Mt/yr.⁶ Around 65-70% of cement is sold in bulk in the territory, with bagged cement taking 30-35% of the market.­⁴²

The largest of the two cement plants in Puerto Rico is the 1.2Mt/yr Ponce plant operated by Mexico's Cemex. Like many of the facilities in the region, the Ponce plant traces its history back to the first half of the 20th Century. It started life as the Ponce Cement Company in 1941.⁴³ A wet process plant for half a century, it was forced by increasing fuel costs to convert to dry production in 1991.

Ponce Cement was acquired by Cemex in 2002 and has been improved by the implementation of energy-intensity reduction in accordance with Cemex's best practices, ensuring a consistent supply of electricity. An electric substation has also enabled the plant to lower its off-peak energy consumption.⁴⁴

The other cement plant in the territory is located close to San Juan, the capital of Puerto Rico. It was built as a wet process line in 1970.⁴² Today the plant has a dry production line with a capacity of 0.8Mt/yr and is operated by Essroc, part of the Italcementi Group.

Current situation

Puerto Rico consumes significantly more cement than the global average due to its high population density and position in a hurricane-prone area. In 2010 it consumed around 550kg/capita compared to a global average of around 272kg/capita.⁴⁵ It consumes approximately 1.9Mt/yr of cement, although approximately a third of this amount is imported, predominantly by Antilles Cement, which ships its material from the Far East.⁴²

In the past two years, the demand for cement has been knocked by a slackening of demand from infrastructure projects based on a lack of finance - the country is closely financially tied to the fortunes of the United States - although the situation started to improve at the end of 2011, in part due to a pick up in cement sales.⁴⁶ Year-on-year sales for October 2011 were up by 4%.

However, sales have recently been disappointing, with June 2012 recording the third straight month that cement sales had decreased. Sales dropped to 66,941t in June 2012 from 76,747t in May 2012.⁴⁷

Trinidad & Tobago

Trinidad & Tobago are two islands that form a nation at the extreme south eastern end of the Caribbean archipelago. Trinidad, the largest and most southerly of the two, is separated from the South American mainland (Venezuela) by just 11km.

Like many of their neighbours the islands were fought over by imperial powers in the 17th to 19th Centuries and were ceded to Great Britain in 1802. They achieved independence in 1962 and became a republic in 1976. Today the islands are relatively prosperous for the region in GDP/capita terms due to oil revenues, although significant wealth-inequality remains.

Cement industry

Trinidad and Tobago is home to Trinidad Cement Ltd (TCL), the most widely-spread producer of cement in the Caribbean islands. TCL has subsidiaries in Jamaica (Caribbean Cement Company) and Barbados (Arawak Cement) as well as its original Trinidadian plant in Claxton Bay, which is located in the south of the island.

TCL was incorporated in 1951 following a prior visit and feasibility study by the Rugby Portland Cement Company of Great Britain in 1949.⁴⁸ The Claxton Bay plant began production in 1954 at a rate of 0.14Mt/yr. In 1958 and 1968 its production capacity was increased to 0.18Mt/yr and 0.25Mt/yr respectively.

The company was nationalised between 1976 and 1989, when the government divested its shares. Cemex snapped up a 20% stake in TCL in 1994, two years before a new dry kiln replaced the two old wet kilns. The Mexican company launched an unsuccessful takeover bid for the remaining 80% of TCL in 2002. TCL remains one of the few domestically-controlled cement producers in the region that is under consideration in this review.

Current situation

The Trinidad and Tobagan cement industry has recently been shaken by a long-running industrial dispute and strike at the TCL plant in Claxton Bay. Officially running for 90 days from late February 2012 until 26 June 2012, the Oilfields Workers' Trade Union (OWTU), said that it was looking to secure higher wages on 27 February 2012, even though TCL had already offered a three-year retrospective wage increase of 6.5%.⁴⁹

The prolonged shut-down at the TCL plant that resulted had a dire effect on cement trade in Trinidad and Tobago, as prices in the country increased. TCL shipped cement in from its subsidiaries in Barbados and Jamaica to help to plug the gap. This move also disrupted normal trading in those countries. Now that the plant is back to normal production, TCL has removed its temporary surcharge on bagged cement (as of 1 August 2012) and cement prices have stabilised back to pre-crisis levels (US$7.73-8.31/bag).

In its fiscal results for the first half of 2012, TCL saw its loss double to US$26.3m across its operations in Trinidad, Barbados, Jamaica and Guyana, despite increased revenue from operations.⁵⁰

Notes

i. Historic and current GDP, population, area and Haiti reconstruction pledge data sourced from the appropriate pages of the CIA World Factbook.

ii. Cement industry details included on map taken from 'Global

Cement Directory 2012,' PRo Publications International Ltd., October 2011, and work conducted towards the publication of 'Global Cement Directory 2013,' PRo Publications International Ltd., in progress.

References

1. Arawak Cement Company Ltd. website, 'The history of the plant,' http://www.arawakcement.com.bb/about-arawak/history.

2. The Barbados Advocate website, 'New Arawak Cement prices from January 1,' http://www.barbadosadvocate.com/newsitem.asp?more=local&NewsID=21665, 21 December 2012.

3. Barbados Fair Trading Commission website, 'Allegation: Abuse of Dominance - Arawak Cement Company Limited,' http://www.ftc.gov.bb/index.php?option=com_content&task=view&id=124&Itemid=28,' April 2008 - April 2009.

4. Nicaraguan Bugler website, 'Cuba to further cement ties with China,' http://www.nicaraguanbugle.com/2012/07/16/china-y-cuba-closer-ties, 16 July 2012.

5. Babún Group Consulting website, Babún, T. A. Jr., 'Cuba's cement industry,' http://babungroup.com/fr/Cement%20Industry-ASCE-Babun-1997.pdf, 1997.

6. 'Global Cement Directory 2012,' PRo Publications International Ltd., Epsom, UK, October 2011.

7. Cuba Standard website, 'Cuba donates cement to Venezuela,' http://www.cubastandard.com/2010/12/28/cuba-donates-cement-to-venezuela, 28 December 2010.

8. Jamaican Gleaner website, 'Cuban cement is here,' http://jamaica-gleaner.com/gleaner/20060626/lead/lead1.html, 26 June 2006.

9. Domicem SA website, 'Historia', 'Domicem en breve,' http://www.domicem.com.

10. Sinoma/CBMI Construction Co. Ltd., website, 'Company Profile, History,' http://cbmi.com.cn/english.nsf/fzls?openform.

11. Cementos Cibao website, 'Historia,' http://www.cementoscibao.com/index.php?option=com_content&view=article&id=44&Itemid=2.

12. Cemex website, 'About us,' http://www.cemex.com/AboutUs/DominicanRepublic.aspx.

13. Construction360 website, '2.7 Million Tonnes of Cement Consumed by Dominican Republic's Construction Industry,' http://www.constructionbiz360.com/article/10/20110111201101141523006154f2f17b0/27-Million-Tonnes-of-Cement-Consumed-by-Dominican-Republic's-Construction-Industry.html, 11 January 2011.

14. Adocem website, 'Increased cement exports to other markets,' http://translate.google.co.uk/translate?hl=en&sl=es&u=http://www.adocem.org/&prev=/search%3Fq%3DAdocem%26hl%3Den%26client%3Dsafari%26rls%3Den%26prmd%3Dimvns&sa=X&ei=WhQpUMzcEIuAhQe1g4DQCg&ved=0CEwQ7gEwAA, July 2012.

15. Holcim El Salvador website, 'Historia', http://www.holcim.com.sv/es/quienes-somos/historia.html.

16. Central America Data website, 'Cement Consumption Down by 31.8% in El Salvador,' http://www.centralamericadata.com/en/article/home/Cement_Consumption_Down_by_318_in_El_Salvador, 11 March 2009.

17. AlertNet website, 'Extreme floods 'the new normal' in El Salvador, minister says,' http://www.trust.org/alertnet/news/extreme-floods-the-new-normal-in-el-salvador-minister-says, 17 November 2011.

18. UK Foreign & Commonwealth Office website, 'North and Central America and Caribbean - Guatemala,' http://www.fco.gov.uk/en/travel-and-living-abroad/travel-advice-by-country/north-central-america/guatemala, updated 6 August 2012.

19. Vision of Humanity website, 'GINI index 2012,' htp://www.visionofhumanity.org/gpi-data/#/2012/GINI.

20. Cementos Progreso website, 'Nuestra historia', http://www.cempro.com/cementos-progreso/nuestra-historia.

21. ThyssenKrupp Polysius website, 'Polysius constructs the biggest cement plant in Guatemala,' http://www.polysius.com/en/news/archive/news-item/article/polysius-constructs-the-biggest-cement-plant-in-gu, 12 November 2008.

22. Harder, J., 'Review of the cement markets in Latin America,' One Stone Consulting Group GmbH, Buxtehude, Germany, 2007.

23. World Bank Data Indicators website, 'GDP growth (annual %)' http://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG.

24. Primasonics website, 'Case study: Cimenterie National, Cement plant,' http://www.primasonics.com/downloads/case_studies/cimenterie_nationale.pdf, 4 April 2008.

25. Cimenterie Nationale website, 'History,' http://www.cina.com.ht/wps/portal/cina-haiti/cina/history.

26. Cementos del Norte website, 'History of Cementos del Norte, S. A.,' http://www.cenosa.hn/v1/index.php?option=com_content&view=article&id=1&Itemid=3&lang=en.

27. Lafarge Honduras website, 'Lafarge en Honduras,' http://www.lafarge.hn/wps/portal/hn/1-Quienes_somos.

28. Cement Mill Price website, 'XSM Cement Processing Plants in Honduras,' http://cementmillprice.com/cement-industry/XSM-Cement-Processing-Plants-in-Honduras.html.

29. GistNet website, 'Honduras: Import (product based),' http://www.gistnet.com/cidb-sample/do-hn.importproduct.html.

30. Caribbean Cement Company Ltd website, http://www.caribcement.com.

31. The Gleaner Jamaica WI website, 'Multimillion-dollar cement plant coming,' http://jamaica-gleaner.com/gleaner/20120411/lead/lead7.html, 11 April 2012.

32. The Gleaner Jamaica WI website, 'Dom Rep cement association hits back,' http://jamaica-gleaner.com/latest/article.php?id=28661, 13 May 2011.

33. The Gleaner Jamaica WI website, 'Cement Price Hiked 9.2%,' http://jamaica-gleaner.com/gleaner/20120601/business/business3.html, 1 June 2011.

34. Cemex Nicaragua website, http://www.cemexnicaragua.com/ne/ne_sc_cn.html.

35. Panama Guide website, 'National Assembly approved Panama Canal budget For FY2013,' http://www.panama-guide.com/canal_operation, 14 August 2012.

36. Cemento Panamá website, 'Historia,' http://www.cementopanama.com.

37. Cemex Panama website, 'Sirviendo a Panamá desde 1994,' http://www.cemexpanama.com/ne/ne_sc_pa.html.

38. Central American Data website, 'Cemex to supply cement for Panama Canal expansion,' http://www.centralamericadata.com/en/article/home/CEMEX_to_supply_cement_for_Panama_Canal_expansion, 14 July 2010.

39. South East Shipping News website, 'Hobbled by strikes and weak cement - Fatter Panama Canal will be late opening,' http://seshippingnews.typepad.com/south_east_shipping_news/2012/04/hobbled-by-strikes-and-weak-cement-fatter-panama-canal-will-be-late-opening.html, 5 April 2012.

40. Seeking Alpha website, 'Cemex, S.A.B. de C.V. Management discusses Q2 2012 results - Earnings call transcript,' http://seekingalpha.com/article/736871-cemex-s-a-b-de-c-v-management-discusses-q2-2012-results-earnings-call-transcript, 20 July 2012.

41. Sun Sentinel website, 'Cement Export Shows Difficulty Of Shifting Trade,' http://articles.sun-sentinel.com/2009-12-09/business/0912080269_1_cement-port-everglades-titan-america-llc.

42. Borja, C.; Dimitrova, D.; Izard, C; Lohani, R. 'The Cement and Concrete Industry in Puerto Rico: An Industry Overview and Analysis,' http://is4ie.org/resources/Documents/2006%20Cement%20Industry.pdf, 9 May 2006.

43. Welcome to Puerto Rico website, 'History,' http://welcome.topuertorico.org/history5.shtml.

44. Cemex Puerto Rico website, 'Nuestra historia,' http://www.cemexpuertorico.com/ne/ne_nh.html.

45. Island Journal website, 'Puerto Rican cement production rises 26.3% in January,' http://www.islandjournal.net/report.htm?section=Caribbean%20Trade%20Economy&story=Puerto%20Rican%20Cement%20Production%20Rises%2026.3%%20in%20January&id=42971, 19 February 2011.

46. News is my business website, 'Economic Activity Index up slightly in October, driven by cement sales,' http://newsismybusiness.com/economic-activity-index-up-slightly-in-october-driven-by-cement-sales, 6 December 2011.

47. News is my business website, 'Cement sales, key economic indicator, drop for third straight month,' http://newsismybusiness.com/cement-sales-key-economic-indicator-drop-for-3rd-straight-month/, 14 August 2012.

48. Trinidad Cement Ltd website, 'TCL Historical Timeline,' http://www.tcl.co.tt/about-tcl.

49. Trinidad Guardian website, 'TCL strike a spectacular failure,' http://www.guardian.co.tt/editorial/2012-05-26/tcl-strike-spectacular-failure, 26 June 2012.

50. Trinidad Guardian website, 'TCL losses double in first half,' http://www.guardian.co.tt/business/2012-08-09/tcl-losses-double-first-half, 9 August 2012.