TCL Group braces for tough year

The Trinidad Cement Ltd Group of Companies (TCL) faced several challenges in 2017–resulting in an operating loss of $49 million– but it remains optimistic about the future.

This was the message from chairman Wilfred Espinet and managing director José Luis Seijo González during TCL’s annual meeting at Hilton Trinidad on Friday.

Espinet said TCL’s revenue had been impacted by an unprecedented series of storms in its eastern Caribbean markets as well as the economic downturn in TT.

“These factors led to a decrease in revenue by nine per cent on a year-to-year basis compared to to $1.7 billion from 2016. Jamaica was an exception for TCL and continues to display robust economic growth, driving higher demand for our products in that market, which has been partially offsetting the group’s declining sales.”

Seijo expanded on this, both during his slide and video presentation and in the MD’s report in the annual report 2017.

“Total revenue of $1.7 billion was negatively impacted by a 27 per cent reduction in revenue in TT, primarily due to continued subdued economic and construction activity. Revenue in Jamaica increased by ten per cent as Jamaica’s economy continues to progress. In Barbados, there was a 14 per cent increase in revenue as some local market share lost to competition in 2016 was recovered. Export sales volumes improved by nine per cent (while) revenues from the ready-mix and aggregates business declined by 14 per cent compared to 2016 due to the sluggish pace of major construction activity in TT.”

However both men expressed optimism that TCL would be able to come through the current challenges, including competition from imported cement, partly because of its integration with its Mexican majority shareholder, Cemex.

Espinet said, “We have a solid strategic plan aimed at driving sustainable long-term growth and global competitiveness...We remain optimistic that the full impact of the group’s integration with Cemex, along with the the successfully completed efficiency improvement and cost reduction initiatives, will serve to mitigate against any negative impact.”

The MD had a similar message. Seijo said the current slowdown in construction activity against a backdrop of increased competition is expected to remain in 2018, particularly for TT and Barbados.

In addition to improved efficiency and reduced expenditure, Seijo said the group has implemented a strategic marketing plan which, when combined with the continued support of stakeholders, will allow TCL to “continue to navigate the challenging times.”