EDITORIAL: Cement game change
THE ARRIVAL in Barbados this week of a shipment of 20 000 tonnes of cement for a new player in the market, Rock Hard Cement Limited, has certainly changed the game that has been in play here for three decades.
Without doubt Arawak Cement Company has served the island well, creating hundreds of jobs during its construction as a joint venture between the governments of Barbados and Trinidad and Tobago, for the many years it operated as a state-owned entity, and in more recent times as a subsidiary of Trinidad Cement Limited.
Additionally, many in the construction industry would recall there was a time when the shipping business was not nearly as stable or reliable as it is today and many a construction project would be held up several times because of a lack of cement on the island. The presence of Arawak changed all that.
But it came at a price. For a number of reasons, many of them never acceptable to Barbadians, we have found ourselves paying more for cement at home than our neighbours elsewhere in the region, even though the product was manufactured here.
Add to that the fact that even to this day there are far too many residents whose homes neighbour Arawak’s plant in St Lucy who still complain about the unacceptable amount of dust and other pollutants that rain down on them from time to time. To them Arawak has not been the best neighbour.
Enter Rock Hard Cement, and Arawak is instantly about to announce a reduction in the price of its product. We can all therefore chalk one up for competition. We are reasonably sure that residents of Checker Hall, Bromefield and surrounding districts will all now be expecting a more neighbourly approach from the company. Competition has a way of bringing about change that for some reason was not previously possible.
We hold no brief for the principals of Rock Hard Cement, but the need for competition that would drive down the cost of construction was long overdue and we therefore applaud Minister of Industry Donville Inniss for pushing the initiative to reduce the tariff on imported cement from 60 per cent to a mere five per cent.
Rock Hard Cement has chosen to import their product from Portugal, but there are other sources of the commodity on the world market, and we hope others will see the opportunity to get involved. More competition is likely to be beneficial to the consumer.
Without doubt a more competitive market will force Arawak to operate more efficiently, and it is no secret that the three-decades-old plant in St Lucy is largely obsolete and requires high labour levels. The company has already trimmed staff significantly and is in talks with trade unions about further cuts. In the face of this competition Arawak will no doubt look to see if it can cut even further if it wants to stay alive.
Its owners at Trinidad Cement Limited will also have to ask themselves an even harder question: Does it make sense maintaining a manufacturing entity in Barbados when it can import the product from one of the mega plants operated in Mexico or elsewhere by its major shareholder Cemex? After all, it no longer has that 60 per cent tariff operating as a protective barrier.
Whether or not they want to accept it, Rock Hard Cement has changed the cement game in Barbados. The consumers now need to shop as though they are in a truly competitive market.