Caribbean Cement Company Limited (CCC) is under scrutiny as a significant cement shortage disrupts the construction industry across Jamaica. The scarcity has led to slowed projects, strained contractors, and limited availability at hardware stores, with some even resorting to rationing supplies. A recent image shared with the Jamaica Observer revealed that a hardware store in St. Andrew was restricting purchases to just 10 bags per customer. Many in the industry are now employing inventive methods to secure the essential material for their ongoing projects.
CCC, Jamaica’s sole cement manufacturer, acknowledged the supply issues in a public statement, attributing the shortage to several factors. The company noted that while it had sufficient inventories before its annual kiln maintenance, the impact of Hurricane Beryl and the ensuing relief efforts accelerated the consumption of these stocks.
The company is currently undertaking a $40 million expansion project aimed at increasing its production capacity by 30% by 2025. Over the past decade, CCC has seen substantial growth, with cement production rising from 758,800 tonnes in 2019 to 962,600 tonnes in 2023. Additionally, CCC is focusing on boosting exports to other Caribbean markets as part of its expansion plans.
In response to the crisis, CCC has stated that it is working to restore normal production levels and replenish inventories swiftly. The company expressed appreciation for customers’ patience and understanding, assuring that normal inventory levels are expected to be reinstated in the coming days.
Industry leaders have expressed concern over the shortage’s impact. Chris Bicknell, chairman and CEO of Tank-Weld Group, confirmed the shortage and acknowledged the complaints from various stakeholders. Norman Horne, executive chairman of Arc Manufacturing Limited, highlighted the broader implications, noting that the lack of cement affects not only construction but also hardware sales and job stability within the sector.
Adam Hugh, CEO of Island Concrete Company Limited (ICCL), emphasized the critical role of a consistent cement supply for operations. The shortage has affected ICCL’s ability to serve its clients, although the company has adapted by seeking alternative sourcing methods and maintaining high customer service standards.
The People’s National Party (PNP) has called on the Government to address the cement shortage urgently. Anthony Hylton, Opposition spokesperson on investment, industry, and global logistics, urged immediate action to resolve the supply issues and mitigate the economic impact on the construction industry and its workforce.
The current shortage has also sparked discussions about the need for additional importers to reduce market vulnerability. Deanall Barnes, managing director of Atlantic Hardware & Plumbing Company Limited, argued that a third importer could provide essential protection against supply gaps, suggesting that an import permit for 60,000 tonnes could help stabilize the market.
Historically, the Jamaican Government has intervened in the cement market during supply crises. In March 2006, the Government reduced import duties to address a production shortfall by CCC. The construction industry, which saw a boom in 2021 and 2022, is now facing a 3.7% reduction for the fiscal year ending March 2024.
Despite the challenges, CCC has reported a 7% increase in revenue to $15.28 billion for the past six months, with a 68% rise in operating profit and a 75% increase in net profit. The company’s asset base has grown by 20% to $39.60 billion, with significant cash reserves.
CCC’s stock price remains at half of its October 2021 highs, reflecting ongoing investor concerns. Cemex SAB de CV, the largest shareholder with a 79.04% stake, and Trinidad Cement Limited (TCL), holding 74.08%, continue to be key players. The Jamaican Government sold its 43% stake in CCC to TCL in 1999 for US$29.8 million during a privatization program.
As CCC works to resolve the supply issues, the construction industry and related sectors eagerly await a return to normalcy.
