Several Measures Implemented to Stabilise Cement Sector

The Ministry of Industry, Technology, Energy and Commerce (MITEC), in 2006 implemented several measures and initiatives to stabilize the cement industry, after the recall of all cement produced between February 19 and 25 last year by the Caribbean Cement Company Limited (CCCL).

            The company had informed that a batch of approximately 500 tonnes of locally manufactured cement produced by them was found to have faulty setting characteristics or premature hardening of concrete.

            The Industry Ministry, Consumer Affairs Commission (CAC) and several private entities played a significant role in alleviating the problems that arose as a result of the shortage.

Removal of Duty on

Imported Cement

            In March, the government agreed to the removal of the 25.83 per cent duty on imported cement. Importers could now take advantage of the CARICOM Common External Tariff (CET) rate of 15 per cent, which was applicable on cement imports up to August 30.

Industry, Technology, Energy and Commerce Minister, Phillip Paulwell noted that a mid-term review of the 15 per cent CET would be completed by the end of May. "This assessment period would allow the government to review the volume of imports and evaluate the impact of cement imports on the domestic market," he informed.

            To benefit from the waiver, importers had to possess concession letters, which were issued by the Finance and Planning Ministry. To assist with the process, the Trade Board was designated to accept all applications and to make the appropriate recommendations to the Ministry of Finance.

            "Importers who wish to benefit from the duty waiver, will be required to obtain the required licences from the Trade Board," Mr. Paulwell stated, adding that the Board would process applications within 24 hours and make the appropriate recommendations.

Three-Month Waiver of Tariff on Imports of Cement

            Mr. Paulwell announced in May that Government would allow a three-month waiver of the 15 per cent tariff on cement imported into Jamaica, to meet the shortfall in the construction sector.

            His announcement was part of the Ministry's on-going efforts to address the cement shortage that was affecting the island and to ensure a stable price to the sector, as regional shortages had created a spike in the spot market price of the product.

            Following discussions held with the industry early in the year, the import tariff on cement was adjusted downwards by the Government from 40 per cent to 15 per cent in early March. However, importers reported that efforts to import cement had been stymied, as a result of the regional shortage.

CAC and Cement Crisis

            The CAC played a significant role in facilitating the resolution of claims and complaints related to the release of substandard cement in the trade by CCCL.

            During the period April 1 to October 31, the CAC resolved some 38 of the 93 cement cases that were referred. More than $24 million was secured on behalf of aggrieved customers.

            In June, the CAC retained the    services of an attorney, who worked with CCCL to deal with the complaints from consumers regarding faulty cement. These were satisfactorily resolved through mediation.

            This intervention by the CAC led to the amendment of inspection procedures to allow consumers to receive a duplicate of the assessment report before inspectors leave their premises.

            Furthermore, a protocol is now in place for the use of independent assessors in the event that there is a dispute with regard to the amount offered for settlement.

Shipments from Cuba and Venezuela

            In May also, further plans and agreements were made to ease the cement crisis. This led to a four-member delegation being sent to Cuba to finalise arrangements for the shipment of 72,000 tonnes of cement, which would be dispatched in tranches to the island from the Spanish-speaking country.

            By June, the first shipment of cement from Cuba, totalling 200,000 bags or approximately 8,000 tonnes, arrived in the island.

            Mr. Paulwell affirmed that the Ministry and all relevant stakeholders, would continue to “track the sales and imports to make sure that very quickly, our construction industry will not only return to the normality of the past, but to build on the tremendous growth that is taking place”.