Removal of subsidy creates hole for cement plant
Local cement manufacturer Arawak Cement Company Limited now has to find approximately $750,000 per year to fill a gap left by the removal of subsidy on diesel by the Government. But it won’t be hiking the cost of cement to do it.
Speaking to reporters today after a tour of the St Lucy cement plant, group chief executive officer Dr Rollin Bertrand confirmed that the company had been severely affected by Government’s decision to remove the subsidy on diesel, effective April 1.
“That will be the impact on Arawak’s plant – the sum of $3/4 million,” he said.
Bertrand was quick to point out, however, that the company always had immediate, medium and long term plans in place and this situation was no different.
He said the group, which also has operations in Trinidad and Jamaica, was faced with “fuel issues” across the region, especially in Barbados and Jamaica.
“Our approach is, always, if there is a removal of a subsidy we then look internally to see how we could mitigate that. And those are the areas we focus on. It is our experience that we understand that governments in the region are going though very difficult times. So while there are businesses that will articulate a view that subsidies need to be maintained our strategy is a different strategy,” said Bertrand.
“We do have strategies in train for improving fuel efficiencies significantly . . . so that we don’t have to pass on the additional cost to the consumer,” he said, adding that there would be no price increase in cement as a result.
Meanwhile, Minister of International Business, Commerce and Industry Donville Inniss said since the removal of the subsidy, his ministry has been getting calls and complaints about its impact on the manufacturing industry.
As such, he said, his ministry was carrying out research to find out the likely impact.
Inniss said, however, if the Government did not remove the subsidy from diesel which affects the manufacturing and fishing industries, other areas would be affected.
“The reality about it is that if that was done it may mean that some other activity of Government – social services, health, education, whatever – would be short of $3/4 million so it is a balancing act and determining the priorities and seeing the bigger picture,” he said.