The government's decision to extend the duty waiver on imported cement will effectively cut non-producers' market share by some 70,000 tonnes, but both Tank-Weld and housing contractors are shrugging it off as a reflection of market conditions.

The reduction in tariff-free imported cement is reflective of the fall in demand locally, Chris Bicknell of Tank-Weld and Raymond Cooper of the Incorporated Masterbuilders Association (IMAJ) said in reaction to the decision.

The decision by Industry Minister Karl Samuda - which is still to be ratified by Caricom - extends the waiver on the 15 per cent common external tariff (CET).

But Samuda has adjusted the terms, cutting duty-free cement imports from 240,000 to 170,000 tonnes, and effectively safeguarding 80 per cent of the local market for Caribbean Cement Limited, up from last year's 75 per cent, while slicing the importers' share from 25 per cent to 20 per cent.

Fair compromise

"I think its a fair compromise," said Bicknell

"The 170,000 in the coming year is reflective of the reduction in demand for cement and is a balanced approach in which we support the government."

But Carib Cement has called the decision a "bad move" and dismissed concerns by Samuda that the company just did not have sufficient storage space for inventory levels required to service the market, were problems to arise.

Tank-Weld, which brings in cement through its nascent port operation in Rio Bueno, Trelawny, says the $1.2-billion investment was predicated on 15 per cent of the cement market. A critical part of this is the bagging and distribution of imported bulk cement.

IMAJ's Cooper noted that the reduction in the amount of cement to be imported is in keeping with the downturn in the economy.

"A few years ago it was projected that the demand for cement would have been 1.3 million tonnes at this time, but currently demand is far below this. The reduction is also recognising the fact that the local cement manufacturer has increased its capacity," he told Wednesday Business.

"We are keen to have a reliable supply of cement — cement of good quality and at good prices. We have no doubt about the quality of the cement locally at this time, but we also want to ensure that the matter of competition remains in place to keep prices at a level where they can be borne at this time."

The IMAJ, along with the Jamaica Manufacturers' Association, had joined the effort to support local importers' bid to stave off the reimposition of the CET on imported cement, which was lifted after severe hiccups in Carib Cement's supplies post-2005.

avia.collinder@gleanerjm.com