Today, we publish the third of 15 stories on the nominees for the Jamaica Observer Business Leader Corporate Award. To be considered for nomination, all companies had to be at least 50 years old, or be able to trace their roots to 1962 or before. The award presentation and announcement of the Business Leader Corporate will take place on Sunday, December 2, at the Jamaica Pegasus Hotel in Kingston.

WHATEVER the future fate of Caribbean Cement Company (CCCL) Ltd, its central role in the development of Jamaica’s social and economic infrastructure has long been cast in concrete.

Recently, the island’s sole cement manufacturer — and, apart from the bauxite industry, its most weighty industrial concern — has been in the news, and there is no doubt that the withering headlines exposing its current financial problems have raised far-reaching questions about the firm’s long-term prospects.

But challenges are nothing new to Carib Cement. Ever since it began manufacturing and supplying the Jamaican market with ordinary Portland cement on February 8, 1952, it has faced many, in one form or another. It has overcome them, so much so that it now finds itself in a position to make the extraordinary claim that an estimated 90 per cent of all buildings within the island were built with its products.

That these homes, offices and factories up to 60 years old, having withstood numerous hurricanes and earthquakes remain structurally sound today, is no small testament to the science and quality control that would have gone into the very first batches of cement that rolled off the conveyor belts over two generations ago.

With annual production capacity of 200,000 tonnes by 1956, Carib Cement had set its eyes on fully meeting the demands of the local market. The company, with this ambitious outlay for the times, sent a powerful signal across Jamaica that the availability of this pivotal building material was no longer a constraint on any form of economic endeavour that involved construction.

By 1964, output capacity doubled to 400,000 tonnes of cement per year. The sprawling industrial operation at Rockford in east Kingston had spawned countless small businesses — from truckers to distributors and builders — and was responsible for hundreds of downstream jobs in post-Independence Jamaica. Direct employment peaked at over 600; the company now has 314 workers.

Led by the bauxite companies, Carib Cement, and later the steel-making firm Carib Steel, Jamaica was on the cusp of becoming a small but formidable industrial economy during the halcyon days of the ’60s.

Not many among those who have studied the industrial environment of the period will disagree that of the three leaders, it was Carib Cement that was the most integrated within the local economy. This is the firm that can plausibly take credit as the foremost enabler of some of the transformational projects that sprang up within post-Independence Jamaica.

The mass housing settlements, beginning with the 1,800-unit Mona Housing Development in 1958/59 by the Matalon family and other similar developments that followed, immediately come to mind. The move by Maurice Facey’s Pan Jamaican Investments in the 1960s to create the New Kingston business district and to introduce high-rise residential and commercial complexes across the capital city is another case in point.

These large-scale investments could hardly have been possible under the status quo. In 1940s Jamaica, cement was shipped from England at a cost that was significantly higher than the price at what a group of investors calculated they could deliver the product to the local market, if they were able to raise money to establish a plant.

Sir William Stephenson and Sir Neville Ashenheim were the main forces behind the formation of this company — after earlier efforts by the Jamaican Government at wooing foreign investors fell flat. Stephenson, who served as chairman for 20 years, and Ashenheim raised £1.2 million from investors within Jamaica, New York and England to bring the project to fruition.

With its heavy usage of locally mined material, including gypsum, as primary inputs for its cement production, CCL became the corporate poster child for the policy of import substitution that was heavily promoted by Jamaica’s nascent post-Independence Government.

The Administration moved to nationalise the industry during the 1970s and by the end of that decade, owned 90.3 per cent of the shares — through the state-run National Investment Bank of Jamaica (NIBJ). By 1985, the NIBJ had taken its shareholding to just under 100 per cent.

The change of Administration in 1980 ushered in a new philosophy that was more open to privatisation of state assets, especially of those entities that were not very profitable.

The divestment of Government’s interest in the cement manufacturer was done by way of a public share listing on the Jamaica Stock Exchange in 1987. Carib Cement was finally returned to the private sector.

But the succeeding decade turned out to be the most perilous for the cement manufacturer.

While this firm continued to be the sole supplier of cement to the Jamaican market, much of its equipment and infrastructure had long past their useful life by the late 1980s. They became unreliable and were gargantuan consumers of energy. There was constant agitation within the construction sector for the Government to pull back the veil of protection extended to this firm so that builders could source cheaper alternatives elsewhere.

Carib Cement became wedded unto a terminal treadmill. The managers responded to the constant equipment breakdown by borrowing short-term money to carry out patch work improvements when the company really needed major capital infusion and cheaper long-term debt. The money that was being borrowed to fund the capital improvements came at stratospheric interest rates.

In 1998, during the height of Jamaica’s financial sector meltdown, the Government was forced to take over the Eagle financial network that held over 40 per cent of Carib Cement shares. The losses had by then become so ruinous that many doubted the manufacturer could survive as a going concern.

That changed in 1999. Trinidad Cement Ltd (TCL) paid the Jamaican Government US$29 million for its 43 per cent shareholding in the troubled behemoth, and combined with its own 10 per cent stake, became majority shareholder.

The Trinidadians took control of the asset and moved with dispatch to fix its problems.

The investors hurriedly replaced the expensive short-term debt that was bleeding the cement producer dry with longer term funding that came with more favourable terms.

Over the next decade plus, the Trinidadians spent more than US$300 million on a three-phase modernisation programme that transformed every aspect of the company’s operation.

The tectonic shift encompassed the company’s environmental management systems. The new owners, conscious of the environmental impact of the cement crushing, brought down dust emission and the carbon footprint in line with world standards. The company now boasts ISO 14001 Certification for this aspect of its operation.

Spanking new equipment was installed to enhance energy efficiency, boost output capacity and ensure reliability of supply, while US$4 million was spent on the workforce to ensure that its collective skill set was up to speed to match the higher demands of the latest technology.

Since 2007, the Jamaican company has been breaking into new markets. Its products are now being used in building construction in Belize, The Cayman Islands, Guyana, and St Kitts. The brand can now be found even in the Dominican Republic, a non-Caricom jurisdiction. Entrenched cement interests in that marketplace initially mounted a fierce resistance to the Jamaicans, claiming that they were dumping their excess output in their country.

The company’s foray in foreign markets was driven in part by a softening in demand for its products in Jamaica due to the presence of imported cement, and the weak economy.

That effort has borne fruit. Of the 843,295 metric tonnes of cement sold in 2011, a total of 216,757 metric tonnes went overseas.

Carib Cement’s General Manager Anthony Haynes says that up to end of October this year, 200,000 tonnes of cement had been shipped abroad, and that the projection was for a total of 240,000 tonnes to be exported for the full year to December 31. Export will account for roughly one-third of sales this year.

The modernisation and expansion programme has been a double-edge sword for the Jamaican cement producer. It now has the ability to export, but expanded capacity has not inoculated it from challenges for a large slice of its domestic market.

Indeed, it has already yielded 25 per cent of its local sales to overseas brands, much of which the Carib Cement managers derisively characterise as dumped cement. Moreover, the ambitious drive towards efficiency, environmental responsibility, and product quality control saddled the company with interminable debt.

This has proven to be a lethal combination. For the first time in over a decade, Carib Cement finds itself in the unhappy situation of having to report accumulated losses of nearly $5 billion which wiped out its shareholder value. It has been forced to lean heavily on its Trinidadian parent for billions of dollars in liquidity support and capital funding.

What’s more, the losses and attendant capital erosion triggered an auditor qualification earlier this year. In another inauspicious development, the company was forced to renege on its debt obligations.

Yet, the managers of this industrial outfit remain guardedly optimistic about the future. In June, the chairman, Brian Young, unveiled plans to begin shipping cement to Venezuela by early next year, under a special arrangement called trade compensation mechanism that is embedded within the PetroCaribe agreement. Essentially this is a special window for Caricom countries to export commodities into Venezuela.

In fact, Haynes told the Jamaica Observer that once in full steam, the Venezuelan agreement could boost sales by as much as 50 per cent.

“The Venezuelan arrangement could be a game-changer for us,” says Haynes.

The general manager also points to the $1-billion improvement in the operational results for the 12 months to September this year as support for his assertion that “we are clawing our way out of the quagmire”.

“We have managed through difficult situations before,” he offers.

That much is already very well-documented.

Carib Cement will continue to squeeze costs and search for new export opportunities, while defending its market at home.

As Haynes puts it: “We are fighting to get back into the black, and even though our situation remains difficult we are already seeing where we are beginning to bounce back.”

moseshbsjackson@yahoo.comKey CCL milestones* source of information: Caribbean Cement Company Ltd

Moses Jackson is the founder and convenor of the Jamaica Observer annual Business Leader Award programme. He may be reached at

1947 – Carib Cement was incorporated (August 10).

1949 – First annual report produced (December 31).

1950 – Work on factory commenced. First annual general meeting (September 15).

1952 – Official opening of factory – January 28; production started February 8.

1956 – Plant capacity doubled to 200,000 tonnes.

1964 – Third production line & kiln 3 added, taking plant capacity to 400,000 tonnes.

1980 – National Investment Corp (now NIBJ) owns 90.3 per cent shares.

1983 – Dry process line installed increasing plant capacity to 600,000 tonnes.

1985 – NIBJ now owns 99.4 per cent of shares.

1987 – NIBJ divests its majority holding to the public.

1990 – Jamaica Gypsum and Quarries Limited acquired as wholly owned subsidiary.

1992 – Rockfort Mineral Bath Complex Limited incorporated – wholly owned subsidiary.

1998 – Government now controls 43 per cent of the company’s shares.

1999 – TCL Group acquires Government’s 43 per cent holding.

1999 – TCL’s increases shareholding to 74.1 per cent due to rights issue.

2000 – Rockfort Mineral Bath subleased as part of CCCL’s restructuring.

2002 – Celebrated 50 years of building Jamaica.

2005 – Highest cement production (844,843 tonnes).

2006 – Groundbreaking for kiln 5 expansion project.

2007 – Achieved certification: ISO 14001, ISO 9001 and BSJ Plant Certification Mark.

2008 – Kiln 5 commissioned. Civil works started on Mill 5.

2009 – Cement Mill 5 commissioned; highest clinker production (742,208 tonnes).

2010 – Increases export sales to 195,163 tonnes.

2011 – Commemorative ceremony for the Kiln 5 project.

2012 – Caribbean Cement Company Limited celebrates 60 years in operation.