Rock Hard upset at TCL takeover
A takeover of Trinidad Cement Limited (TCL) by the Mexican multinational building materials company Cemex would strike a solid blow to Barbadian cement companies, one local company has charged.
Rock Hard Cement (RHC), a member of the Mark Maloney-led Preconco group, is warning that the US$86 million (BDS$ 172 million) yet unconfirmed deal, which would affect TCL’s operations in Barbados, Trinidad and Tobago and Jamaica, “could have a negative impact on the construction industry, especially given Cemex’s plans to expand into the ready-mix and precast businesses”.
It is the ready-mix sector that RHC is most worried about, with the local company pointing out that the Mexican giant enjoyed too great an advantage to allow for a fair contest.
“Given Cemex’s history in the ready-mix sector, this expansion could significantly impact longstanding local companies who would not have the same inexpensive and convenient access to the cement needed,” RHC said in a statement this week.
The local company, which offers precast services, also warned that the Cemex takeover could impact the amount of foreign exchange brought into the country by Arawak Cement. In fact, it said foreign exchange was already being lost due to the lower price of the cement products in other territories “and the money spent by Arawak on products used in the manufacturing process”.
The company entered the local market in November 2015, and it was engaged in a battle last year for control of the cement market, insisting its product was of good quality, and taking credit for reducing cement prices in Barbados in the face of allegations by TCL that it was misleading consumers.
The company had also accused the TCL group of employing various tactics to try to stop RHC from entering regional markets.
“Arawak has tried everything to stop us from entering the market and from selling our quality cement,” Maloney had told Barbados TODAY at the time.
RHC today noted that TCL and its subsidiaries had had a monopoly in the cement industry for decades, adding that the price of cement had only fallen in the last year with the entrance of RHC into the market.
“While RHC is committed to the sector and welcomes all fair competition, some of the actions of Arawak and by extension TCL over the past year have not been in-line with these sentiments, and [RHC] believes that the situation will only escalate with the takeover,” RHC said.