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Paolo Lombardo (centre), environmental specialist at the International Finance Corporation (IFC) is accompanied on a tour of the Caribbean Cement Company (CCC) plant at Rockfort, Kingston, by CCC representatives, (from left), Stakeholder Manager Balfour Denniston, project manager for the Kiln 5 project Ken Wiltshire, and General Manager Anthony Haynes.

Susan Gordon, Business Reporter

Having substantially reduced the debt incurred for the modernisation of its Rockfort plant and with significant energy savings expected from the project, Caribbean Cement could be in a position to pay dividends next year, the company's general manger, Anthony Haynes, told shareholders Thursday.

"The mill will make operations much more efficient and be able to produce some of the rapid hardening cement and pull down our cost," Haynes said at the firm's annual general meeting at the Jamaica Pegasus hotel in Kingston.

For the financial year that ended December 31, 2007, Carib Cement returned net profit of $522.12 billion, on a turnover of $7.8 billion.

The profit, representing earnings per share of 61 cents, was an increase of over 700 per cent on 2006, when the company suffered serious production problems.

No returns to investors

Last year's strong profitability was always on the cards after Carib Cement had recovered from the effects of storms and the issues that in 2006 caused it to recall tens of thousands of tonnes of poorly manufactured cement from the market. But the company had told investors that it would use the surplus to support the modernisation/expansion that would increase capacity to around two million tonnes a year.

But at the release of the results, the company warned that no returns would flow to investors, saying it was saving the funds to throw back into the project.

Initially, the plan was announced as a US$120-million project, but several hiccups later, has climbed to US$177 million.

On Thursday, Haynes said the kiln 5 project, the first phase of the expansion project, for which two thirds of the financing came from the International Finance Corporation, was 99 per cent complete.

The rest of the financing, about $1 billion, according to Haynes, was covered out of the company's cash flow. This tightened its liquidity.

"We have not had to go back to any additional sources for funding," Haynes told Sunday Business. "There has been a lot of cost push in our project, including the price of steel and cement. But we've already paid down and paid off over US$100 million (of the borrowings)."

Next big undertaking

Haynes told shareholders that the new kiln should be fully up and running, capable of producing clinker by May, and by the summer, either July or August, move to the production of cement.

The next big undertaking, the US$25 million mill project, is to be completed by the last quarter.

"The mill will make operations much more efficient and be able to produce some of the rapid hardening cement and pull down our cost," Haynes said.

Critically, the company's electricity bill, at $100 million a month, will be cut by half.

Cement sales for 2007 reached 813,448 tonnes against some 773,019 tonnes in 2007.

susan.gordon@gleanerjm.com