Hard times have hit the Arawak Cement Company Limited.
The company had “a disastrous production year”, which negatively impacted its revenues, and projected growth this year is “modest” at best, the Checker Hall, St. Lucy company’s parent Trinidad Cement Limited reported ahead of its annual general meeting in Trinidad tomorrow.
Arawak’s “cement volumes” have declined by 11 per cent, with TCL officials saying the Barbados market “remained depressed”.
Revenues were also not impressive, dropping from $52,764 in 2011 to $50,304 by the end of last year during a period called a disaster.
“In Barbados, ACCL’s Kiln produced 159,700 (metric tonnes) of clinker, 13 per cent below the 184,100 (metric tonnes) for 2011,” TCL said.
“The plant had a disastrous production year caused by the lack of working capital to undertake critical maintenance programmes.
“Corrective action was taken during a major stop in October 2012, upon completion of the Group’s debt restructuring programme and receipt of an advance deposit for a major cement supply contract.”
TCL management also said that while they expected about 10 per cent growth in cement sales volume for Trinidad, there would likely be “modest volume growth in Barbados for 2013”.
“The group’s earnings before interest, tax, depreciation and amortisation increased by 82 per cent from the 2011 level to TT$159.9 million in 2012. This was achieved notwithstanding production difficulties at Barbados and Jamaica,” the company stated.
“The challenges of the previous year ushered in a difficult start to 2012 – a year of contrasting halves for the TCL Group. While the first half of the year was characterised by almost intractable challenges, the second signalled the start of the rebuilding process.
The group entered quarter one 2012 without access to working capital and supplier credit. Consequently, plant operations (particularly in Barbados and Jamaica) suffered tremendously during this period, with frequent interruptions due to lack of fuel, spares and consumables,” it added.
Arawak, which was incorporated in Barbados in 1981, was wholly acquired by TCL in 1994. Its primary activity is “the manufacture and sale of Portland Pozzolan Cement and Lime”.
In addition to the internal difficulties faced by its parent company and itself, Arawak would have also been negatively affected by the decline local construction.
On Tuesday, Central Bank of Barbados Governor Dr. DeLisle Worrell reported that “activity in the construction sector declined by about nine per cent by the end of June 2013, following a decline of seven per cent at the end of December 2012”.
“Locally produced building materials as well as imports of construction materials fell by 16 per cent and 19 per cent, respectively. There were noticeable declines in imports of wood and lumber, fibre board, structural parts, iron and steel which jointly account for 75 per cent of imports of construction materials,” he said. (SC)