Jamaican cement producers explore coal switch from oil

Jamaican cement producers explore coal switch from oil
Published: 10 October 2011

Jamaica’s cement producers, by their estimates, can save roughly US$37m (J$3.2bn) annually by building their own coal power plant, as opposed to purchasing oil fuel from the national grid or any other source.

The continued exploration of coal to fuel cement production highlights the impact that high fuel costs have on manufacturers.

Caribbean Cement Company Limited, currently the island’s sole manufacturer, asserts that it can save at least US$8m annually were it to build a US$70m 40MW coal plant.

Comparatively, its rival start-up Cemcorp, a Canada-based firm trading locally as Cement Jamaica Limited, placed its estimate of potential savings higher at US$29 million based on building a 30 megawatt coal plant and nine megawatt co-generation plant, according to the addendum to its environmental impact assessment submitted last month to the National Environment Planning Agency.

"Electricity is the single-largest cost to our business," said Ken Wiltshire, operations manager at Caribbean Cement, in a telephone interview with Sunday Business.

In the distant past the company operated its own self-power generating units powered by fuel oil. However, it eventually became cheaper for Carib Cement to buy power from utility provider Jamaica Public Service Company (JPS) as the plants fell into disrepair.

Carib Cement wants to reduce its estimated US$24m a year electricity bill. Wiltshire recalled many tenders and studies done with the purpose of returning the company to supplying its own power.
"We would love to put up a plant," he said, but added that currently, the company does not have the cash flow to finance such a project.