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Cement maker Caribbean Cement Company Limited expects to spend over US$51 million ($8 billion) this year as capital expenditure to complete its plant expansion while embarking on new projects.
It would equate to the largest annual investment in the Rockfort, Kingston-based plant in a decade. Spending would rise fivefold from the $1.6 billion a year earlier. Investments have surpassed $11 billion in total over the span of a decade, with 2017 accounting for a capex of $2.2 billion.
“The spending in 2024 will be bigger than in the past,” said Managing Director Jorge Martinez while reporting to shareholders at the company’s annual general meeting on Thursday.
Caribbean Cement later confirmed to the Financial Gleaner: “We have assigned a budget of US$51.3 million.”
The maker of Carib Cement said that half of the funds would be spent on completing the kiln expansion. A kiln is an industrial furnace used by Caribbean Cement to transform clinker into cement.
The expansion aims to raise production capacity by one-third to 1.3 million tonnes. A year earlier, US$800,000 was spent on the kiln project. The project was originally slated for completion by the end of 2024 but is now expected to be commissioned in 2025. The kiln project was originally budgeted for US$40 million and it remains largely within budget despite inflation and equipment delays.
“At this moment while we have potential threats, we are on track for the first quarter 2025,” Martinez said.
The other half of the capex will be spent on various projects, including a dust-mitigation programme costing US$3 million. The company spent US$400,000 on dust mitigation in 2022.
Cement demand has dipped by one per cent year on year with a slight falloff in construction activity. Martinez, however, expects a rebound with the rise in new hotels to be constructed.
“Right now the demand is very stable,” said Martinez, adding that the company was counting on the various hotel investments unfolding on Jamaica’s north coast for business.
The Government expects global hospitality brands to grow the hotel room count from 32,000 to 50,000 rooms within five years.
Caribbean Cement, which, last year, earned revenue of $23 billion, supplies cement to more than 90 per cent of building and civil construction in Jamaica.
In the January-March 2024 quarter, the company made $1.9 billion in profit on revenue of $7.6 billion.
Caribbean Cement also plans to reduce its emissions by nearly half by 2030 in tandem with the drive by Cemex, its ultimate parent company, to become more sustainable. Pollution results from the kiln, but also, its quarrying operations for limestone can lead to deforesting and scarring of hillsides.
The company’s sustainability drive has six pillars aimed at cutting its carbon emissions from 670 kilogrammes per tonne equivalent down to 430kg in about six years. In 2023, its emissions were reduced by 5kg or under 1.0 per cent. And the reduction has since grown to 10kg, according to new information released on Thursday by Caribbean Cement.
Martinez said that in service of reaching the 430kg emissions target, he wants to enact more focused burning in the kiln to reduce fuel usage and pollution; reduce the plant’s heat consumption; and introduce alternative fuels to pivot towards the sustainability goals. Failing that, the company will consider investing in renewable energy firms to gain carbon credits to offset the emissions from its core operations.
“Before we invest in those types of companies to develop environmental credits, we are focusing on using more alternative fuels,” he said.
Caribbean Cement is also planning a mangrove protection and restoration project that would utilise floating cement blocks or buoys acting as barriers to protect mangrove roots from storm surge or other forms of damage. Birds, fish, and other creatures use the mangroves as sanctuaries. The plants also release a lot of oxygen.
“We plan to bring that technology to Jamaica,” said Martinez.
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