The following is a statement from the Jamaica Manufacturers Association responding to the lead article in Wednesday Business of May 27, 2009 arising from a meeting of the JMA board on the cement debate:

The Jamaica Manufacturers' Association Limited continues to provide strong support for both local manufacturing and the national interest.

The association is not siding with cement importers, and has made a recommendation which clearly supports our local manufacturer and member, Caribbean Cement Company Limited (CCCL), whilst taking into account the potential impact on the construction sector, manufacturers dependent on the construction industry, consumers on a whole and the national economy.

The JMA board has agreed to make the following recommendation:

"That the 15% Common External Tariff (CET) be suspended for one additional year until the slated investments by CCCL which is scheduled for July 2009 is completed and fully operational, and to provide the opportunity for CCCL to demonstrate within this time period that the company is able to fully supply local demand."

Factors considered

The factors considered before arriving at this balanced recommendation were:

1. The significant investments made by CCCL in response to challenges experienced in 2006;

2. The expansion by CCCL is scheduled for start-up in July 2009, only two months prior to the expiration of the waiver. The Association is cognisant of the risks involved in getting any new plant up and running and the potential delays;

3. The historical and potential impact on the majority members of the JMA dependent on the construction industry as well as the national interest, in the event the expansion is not completed within the given time frame or there are future eventualities that disrupt production;

4. CCCL's contribution to the local economy;

5. The current demand for and supply of cement.

Quota needed

The JMA decided that in addition to the suspension of the 15 per cent CET, a quota needs to be agreed upon, which is within the purview of the Ministry of Industry, Investment and Commerce to determine, based on an analysis of the demand and production data.

The JMA does not have a firm position on what the quota allocation for imports should be, but we do recognise that demand is currently substantially reduced from the last renewal of the CET.

The renewal of a quota will provide CCCL with at least a dominant market share whilst ensuring that the risks associated with any interruption of local supply which may occur during start-up of the new investment will not have an impact on the public.

The association is cognisant of the fact that there are four months remaining prior to the expiration of the waiver as well as the many variables at play and changes occurring in the market place.

The JMA, therefore, leaves the final decision to the Ministry of Industry, Investment and Commerce, which the association will support.

The association also seeks to clarify that Prime Minister Bruce Golding did not contact or request from the JMA any input or position on the re-instatement of the common external tariff (CET) on imported cement.

JMA was approached

In light of the upcoming review of the treatment of the 15 per cent CET on imported cement in September 2009, the JMA was approached and presented with supporting arguments by both its members Tank-Weld Limited and CCCL, for consideration.

The JMA stands true to its mission to promote the development of the manufacturing sector and ensuring the sectors continued contribution to our country, Jamaica.

The association has done so for 62 years, and continues to do so through its lobby and advocacy as well as special initiatives such as the 'Buy Jamaican ... Build Jamaica' campaign.

imega.jma@cwjamaica.com