Cement Shortage Concerns

Frank Flowers, Flowers Block

By Anthony Henry
anthony@caymannetnews.com

Friday,  December 16, 2005

Even two days without cement in the construction industry is cause for concern here and recently, industry players have been without supplies for longer than that.

With paid-by-the-hour construction workers on sites where no cement work had been done for three days and counting, contractors had become frantic.

Even block maker, Frank Flowers, voiced his concern about the matter because the almost-a-week-absence of cement supplies was bad for business.

He spoke with Cayman Net News on 14 December, as other industry participants reported what they saw as a “cement shortage” that was approaching a week.

A representative of the Cayman’s principal supplier of the product, Gary Longenbach of National Cement, confirmed that the company was out of stock.

 “When we saw what was happening (the shortage) we tried to keep everybody informed so that no one would start doing any big pours and would have no cement to continue,” he said.

However according to Mr Longenbach, fresh supplies of cement were expected on that very evening, with another shipload on the way right after.

Asked if this amount of cement would meet local industry demand again at the pace needed Mr Longenbach said, “Within the next three weeks things should be back to normal.”

With this news and the current heavy weight of days without cement already the cement supply shortage is causing problems, especially against the background of Cayman’s highly active construction sector.

Mr Longenbach did not see the need for significant concern but others have taken a different view.

Some industry players are calling on National Cement to recognise their market monopoly and the consequent dependence all players have on the company’s ability to meet the local demand.

They said that in the face of a shortage, National Cement had a duty to ensure that they “set a level playing field” for customers.

 “The current shortage is too stark a reminder of the period right after Hurricane Ivan,” said one.

“At that time there was every indication that, in the face of a shortage, National Cement was not laying a level field.

“Product was put aside for certain customers and not made available to the first customer at the counter, so to speak. There are some indications that this is happening again, and this is not right.

“If this company cannot manage the monopoly in a way that meets the demands of the entire industry fairly, then they should say so.”

Mr Longenbach denied that any preferential treatment had been given to any customer. He instead pointed to some larger issues.

First he said that there was a shortage in the region. He said that Bahamas, Mexico and Venezuela were some of the countries involved in the regional trade.

However, Cayman Net News contacted Dwayne Murray of National Products – Distributors for cement in the Bahamas. He said that Bahamas – non-producers of cement – had not experienced a cement supply shortage recently.

He confirmed that cement supplies for the Cayman Islands would come from Venezuela to Bahamas because Bahamas had the facility to accommodate the bigger ships while smaller loads had to be sent on Cayman because large ships could not be accommodated but was unaware of any general shortage.

Mr Longenbach also said Cayman was limited in terms of the amount of cement it could receive at any one time, due to the issue of not being able to accommodate large ships.

 “Our Port cannot take large ships and so we are limited in what we get, even when there is a slight increase in demand here. We get about 3000 to 4000 metric tonnes of cement per load.”

In response to this point another player in the industry said, “Our Port facilities have been a constant limitation and demands had been met previously.

“So a piece of the puzzle seems to be missing if there has been no unmanageable local increase in demand for cement and now there is a shortage. If the supply shortage is as brief as described, or non-existent, if the information out of Bahamas is taken into consideration, why is there no overlap stock to meet a broader range of demands in some measure until new stock arrives? Where is the usual overlap stock?” the industry representative added.

Mr Longenbach noted however that one of the region’s delivery vessels had been damaged last year in a hurricane. He said that this could also be a factor in what he called a “short supply” coming to the region.

He did admit that the vessel was now, however, back in use.

Mr Murray in Bahamas said that as far as he knew the damaged vessel was back in operation for more than six months now.

Mr Longenbach also brought into the picture the fact that Jamaica also had cement shortage woes recently.

However, one industry representative pointed out that a different set of factors were composing the Jamaican situation. He said that Jamaica produced its own cement.

Therefore, any problems in that market would include issues relating to that company’s local manufacturing capacity as well as its ability to get new supplies.

With clear explanations for the current supply shortage still unavailable, cement buyers remain dissatisfied.

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