Gov’t to consider extra-regional cement suppliers, Ali says

Acting Industry and Commerce Minister Irfaan Ali has signalled that government would be weighing a decision to open the country to extra-regional cement suppliers, in wake of the 5% increase announced by Trinidad Cement Limited (TCL) for its Portland-Pozzolan cement.

“We are awaiting a full analysis of the situation, subsequent to which we will advise the Foreign Affairs Minister who will determine what position to take or decide whether the market should be open to extra-regional companies,” Ali was quoted as saying in a statement issued by the ministry, in response to the hike put in effect Wednesday.

Ali said that Guyana has the most aggressive and progressive construction sector, adding that the increase would have to be met with a “policy intervention” to ease the burden it brings.

“We firmly believe that the market should not only be protected in times of shortages but that there should be some fairness and competitiveness in pricing commodities. Increases in product cost and raw materials should be balanced with the competitiveness of the product,” Ali further said.

Irfaan Ali
Irfaan Ali

The ministry stated that many suppliers and customers have lamented the price hike and local companies are pledging to stand by their customers and hold the price for cement. Additionally, it said that the local producer of West Indian Cement has confirmed that his price will remain the same despite the TCL increase.
In order to ensure competitive pricing for extra-regional suppliers, Guyana would need a waiver on the 15% Common External Tariff (CET). Government has in the past waived the CET on extra-regional cement imports without approval from the Council for Trade and Economic Development (COTED).

According to Article 32 of the Revised Treaty of Chaguaramas, as it relates to the operation of the CET, “any alteration or suspension of the Common External Tariff on any item shall be decided by the Council by unanimous vote.” It also says that during the transitional period in respect of any item, a member state may decide as a temporary measure to reduce or suspend a duty in its national tariff for the purpose of domestic price control provided that goods originating from member states on which duties are payable are accorded no less favourable treatment.

Effective Wednesday, local customers purchasing TCL cement would have noticed a 5% increase to $1789 per sack price, which was implemented as the second part of the company’s planned staggered price increase that began in July last year.

TCL Guyana said the price movement forms part of a deliberate strategy to minimise the impact of a large one-off increase on the market. “The current adjustment is largely predicated on a price change by parent company and bulk supplier TCL, which… has been continuously faced with substantial increases in major cost component,” the company said in a statement. It cited escalations of 26% in spares and 12% in packaging that have been impacting its cost profile despite improved operational efficiencies.

TCL Guyana added that in recognition of the fact that cement is a major element of Guyana’s economic growth, it has kept the adjustment to a minimum and this remains at the lower end of the tier when placed in a global context. In Trinidad, the company has said, the price has increased by as much as 9.5%.

The company also said that it would maintain its offer of a 20% discount to first time home buyers under the government’s low income earners housing initiative, which it has been supporting since 2010. TCL Guyana Marketing Manager Eric Whaul told Stabroek News that persons desirous of accessing this service are asked to walk with their letter from the Ministry of Housing when doing their purchase transaction. However, he wanted the public to know that they do not offer delivery services and the offer starts with the minimum purchase of one sling or 35 sacks of cement.

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