Dear Editor,
In an article which appeared in the Sunday Stabroek of November 15, Dr Bertrand, CEO of Trinidad Cement Limited (TCL) Group of Companies acknowledged that TCL was not competitive but was seeking to be so in the shortest space of time. The cooperation of governments within the region was necessary to maintain its profitability, he said, through set pricing for its product, since the Common External Tariff (CET) was integral to the development of industries within the region. He conceded, however, that TCL was small when compared to other international cement producing establishments, and therefore if TCL was to recoup its long-term investment it needed the Caricom market through the mechanism of CET which bestowed on the company a competitive edge whereby it could subtly shut out competitors and maintain a high price for its product. Thus it could gradually expand its market to Brazil and elsewhere and hopefully it could eventually become profitable without the CET advantage.
It seems, therefore, that within the CET mechanism, Guyana and other Caricom states will have to subsidize inefficient industries for a long time to come until such time as their products become competitive on the world market. The United States has and is losing its manufacturing industries because they cannot compete on the world market, and the country is now very dependent on its service industries. It is no wonder therefore that failed enterprises in the United States and elsewhere are relocating their operations in Caricom countries because of the attractive tax incentives and protected market extended to them, but for which the people of the region have to pay a price. Guyanese already have VAT and high income tax to contend with, and now adding the high cost of cement which impacts on their construction needs is really asking too much.
Cement is a basic and important material for the construction industry in Guyana, and therefore it has to be competitively priced to keep building costs low and allow its economy to grow so that Guyanese could enjoy a higher standard of living.
TCL Guyana Inc (TGI) is a subsidiary of TCL and many of its investors are Guyanese who are also distributors of TCL cement. Hence it is in their financial interest to push the brand and maintain a high price level to maximize their share earnings.
TCL should seriously examine its manufacturing and distribution operations with the view to making its product competitively priced and not depend on a seemingly monopolized market for its profitability. The TCL brand may be popular in Trinidad, but not with the many Guyanese builders whose gross profit margin is often under 10%. For their survival and those of their customers, contractors have to seek the cheapest possible source for a quality cement for which there have been several conflicting quality claims, such as TCL stating that its cement is waterproof and tight and of a very high quality. However, there are no published fact sheets prepared by an independent laboratory confirming these quality claims, such as physical strength requirements, setting time, chemical composition and soundness. Guyanese need to be informed in a convincing way that TCL sells a product which is indeed of a very high quality and competitively priced, and then it should approach the Government of Guyana about breaching the Revised Treaty of Chaguaramas and CSME and not seek cover from the Caribbean Court of Justice.
Yours faithfully,
Charles Sohan
