Home' Trinidad and Tobago Guardian : November 12th 2015 Contents NOVEMBER 12 • 2015 www.guardian.co.tt BUSINESS GUARDIAN
NEWS | BG7
TCL chairman Wilfred Espinet says the
regional cement producer is committed to
keeping its Barbados subsidiary operational,
as he unveiled plans to reduce the workforce
at Arawak Cement, invest money in the plant
to to improve its efficiency and increase the
company s export earnings.
Speaking at a news conference at the Accra
Beach Hotel in Barbados on Monday, TCL s
group CEO, Jose Luis Seijo said Arawak had
experienced a 10 per cent improvement in its
efficiency in the last six months and as a result,
TCL has decided to pass on some of those
gains on to its Barbadian customers, by reduc-
ing the cost of cement in that market this
The TCL directors declined to provide details
of price reduction in the Barbados market,
citing the need to communicate the decision
to its customers first.
Espinet said the current board of directors---
which was elected in September 2014---had
concerns that some of TCL s subsidiaries were
losing money and the thinking was that these
companies would either be fixed or sold.
"We have done a great deal of work on these
companies and the management has decided
that Arawak is a company that justifies us not
only maintaining it, but investing heavily in
He said the company plans to invest US$10
million at Arawak over the next three years,
increasing the production efficiency of the
There are also plans to reduce Arawak s cost
of production by reducing its current headcount
of 200 by 40 workers.
Espinet said Arawak currently produces
about 210,000 metric tonnes of cement a year,
of which 76,000 tonnes is sold on the Barbados
market and about 135,000 tonnes is exported.
He said the cement group plans to double
the export of the commodity from Barbados
in two years, which would increase exports to
about 270,000 metric tonnes and the plant s
total production to at least 346,000.
He said Arawak currently earns US$20 mil-
lion from the export of cement, and is the
island s second largest export earner. The busi-
ness executive said that in two years time, if
exports doubled, he expected that the plant
would be the largest single export contributor
The TCL chairman explained that Arawak
which is located in the parish of St Lucy, would
be able to double its exports as there are plans
to increase the capacity of the plant as well
as improve its capacity utilisation.
Seijo said the demand for cement had
declined by 65 per cent to 76,000 metric
tonnes in the last ten years, while Espinet
added in that period Arawak had an average
annual increase of 4 per cent, which he argued
was lower than the food index and the overall
retail price index in Barbados.
Addressing an argument in Barbados that
Arawak is able to increase the price of its prod-
uct regularly because of the high tariffs that
protect the company against cement imports,
Espinet said: "Arawak makes a greater con-
tribution to the Barbados economy than the
protection it receives."
On Tuesday, Barbados Minister of Industry
and Commerce, Danville Inniss was quoted
in the Nation newspaper as saying the gov-
ernment is preparing to reduce the tariff on
imported cement from 60 per cent to 5 per
cent. Inniss said he was concerned that Arawak
sold cement cheaper in the Eastern Caribbean
than in Barbados.
Away from the brink
In September 2014, TCL was on the brink
of extinction, as the company decided to place
a temporary halt on its principal and interest
payments to its creditors, which was considered
to be a condition of default.
Since the new board took over TCL on
August 19, 2014, the fortunes of the company
have been transformed.
For the first nine months of 2014, TCL
declared an after-tax profit of $63.66 million,
from revenues of $1.58 billion.
For the first nine months of 2015, the regional
cement producer declared an after-tax profit
of $419.25 million, which is more than six
times the $63.66 million, for the corresponding
period in 2014, from revenues that totalled
$1.63 billion, just 3.1 per cent more.
TCL reduced its total liabilities (both current
and non-current) from $2.77 billion for the
first nine months of 2014 to $2.03 billion in
2015 and now has total net assets of $1 billion,
almost doubled the $571 million for the first
nine months of 2014.
The strengthening of TCL s balance sheet
was achieved by the company raising US$57.1
million from a rights issue in March this year
and a two-stage debt restructuring exercise,
which involved the group replacing high-cost
amounting to US$280 million ($1.8 billion)
as at September 2014, with a five-year, floating
rate loan of US$200 million, which was
arranged by Credit Suisse and Citibank.
As a result of its improved financial per-
formance, the company s share price has sky-
rocketed from $0.95 in May 2013 to $3.81 on
TCL keeping Bajan plant
...cutting cement price, layoffs to make Arawak fit
Links Archive November 11th 2015 November 13th 2015 Navigation Previous Page Next Page