Construction slump hits Cementos Especiales, Spain

Construction slump hits Cementos Especiales, Spain
13 July 2010

The slump in construction activity in the Canary Islands has forced Cementos Especiales de las Islas, SA (CEISA) to reorganise its staff to cushion the slowdown experienced by the sector. In this way, the company has already dispensed with 50 workers (it counts 300) by means of early retirement and voluntary redundancies. It is a first adjustment, "which will turn into more if the economic indicators continue as they have up to now," explained sources at the plant’s committee/board. However, the expiry of these contracts "has been in full compliance with workers who, in many cases have been pleased with the proposal of the group," continued the committee.

The bursting of the housing bubble has caught Cementos Especiales unawares to the point that its business has dropped by over 70% since the start of the crisis, which coincides with the last quarter of 2007. Thus, during this financial year, the company moved around 1.5Mt of cement, when today it barely reaches a production of 350,000 tonnes. The end of the construction boom directly reflected in the corporate income statement because during the economic boom, the CEISA group invoiced around EUR25m and this has now fallen to around EUR25m. Another consequence of the crisis is that of the two cement ships at its disposal, one has been sent for scrappage before the crash in construction activity in the past two years.

Moreover, despite the fact that the administrative concession for cement transport at the port of Arguineguin ends in 2020, there are several alternatives being sought for the industry. In fact, in the special territorial plans of Cabildo de Gran Canaria the conversion of the industrial dock into leisure moorings was considered. This also brings into play more than 100,000m2 which is owned by the cement company claim/inducement for investment of other sectors.

Published under Cement News