Mainland International has invited firms to submit proposals on the securing of land and construction of a cement plant that the company would operate in direct competition with Carib Cement Company. Apparently the plan calls for Mainland to partner with Harricrete Ltd, a Trinidadian cement blender that a few years ago aggressively competed in the market of the twin-island republic, against Trinidad Cement Ltd. Officials for Mainland stressed that the project was still at the exploratory stage, and that there was yet no certainty that it would actually get off the ground.
While it remains unclear as to the precise nature of the arrangement between the contractors and Mainland, the Jamaica Observer says that a September start-up date has been proposed by Mainland, with the expectation that the project would be completed within 18 to 24 months. The plan, sources say, is for the project to be rolled out in phases, with a US$25-million outlay for the initial phases which would involve a clinker grinding and packing operation. A co-generation plant would be set up - to provide enough energy to run the plant with sufficient additional capacity to sell to the local power grid.
Firms preparing bids have been actively seeking 30-acre tracts of land close to two ports: the Lucea harbour area in Hanover, and along the Salt River Road in Clarendon, close to Glencore’s Port Esquivel. But apparently also being considered by Mainland is a US$150m, full-scale clinker producing and grinding facility which would rival that operated by Caribbean Cement.
Mainland in the last five years emerged as Jamaica’s number two supplier of cement, sourcing the product first from Thailand and Indonesia. When Mainland first began importing cement into the island, it turned to the Harricrete Group in Trinidad, but later went directly to the producing countries. In March the Jamaican government slapped a 40.83 per cent duty on imported cement, in addition to GCT of 12.5 per cent, and a two per cent user fee. The combined duties, according to Mainland, and another importer, Arc Systems, made the cement import business uncompetitive.
The duty was in part a response to last year’s announcement by Carib Cement owners that they would invest US$100m to expand the capacity of the Rockfort facility, but placed the duty increase on imported brands as a condition of the investment. A check by the Jamaica Observer revealed that Carib Cement has scheduled the expansion to begin at the end of this year and be completed in 2008. With the investment, Carib Cement’s capacity would jump by half from 800,000 tons to 1.2Mt.