Rock Hard Cement bids to block import quota

Cement importer, Rock Hard Cement is seeking to block the Ministry of Trade and Industry from imposing a ceiling of 75,000 tonnes of cement that could be imported in the country.

In a telephone interview with Sunday Newsday, Rock Hard’s local distributor Motilal Rahmit and Sons, managing director Ryan Ramhit said the ministry's new policy, especially increased tariffs and duties, have forced the company to close its operations for one month from Monday.

The company in a newspaper advertisement on Saturday stated, “We will be unable to open to supply cement on January 4 as previously planned. The government has sought to implement crippling restrictions that have adversely affected our company.”

Rock Hard Cement is imported from Turkey and is distributed in TT, as well as other Caricom states.

The ministry in December, last year, in Legal Order 415 and 416 of the Customs Act, Chap 78:01 introduced a quota, import licensing regime and registration system for building cement – grey and other hydraulic cement – which went into effect on January 1.

This system, it said, would last for a three-year period and implemented a maximum quota of 75,000 tonnes of cement to be imported. Those who wished to engage in such activity would first have to be registered with the Trade Licensing Unit at the ministry.

Ramhit described the policies by the ministry as unfair treatment to their line of business and noted that there could be a price increase of cement which would be passed on to customers.

In the newspaper advertisement, the company said, “Duties on cement have effectively moved from zero per cent to five per cent, and 2021 will see a price increase in excess of 80 per cent. Unfortunately, our country can expect a devastating impact on prices, a major shortage of this commodity and the added threat of a monopoly in the supply of cement.”

Ramhit explained, “I am unsure about the future of the company. I had a shipment booked for January and I was not even sure if they were going to grant me a licence and how much they would allow me to import.

“The 75,000 tonnes the ministry referred to was for all contractors and not per applicant. So, I am unsure of where our business would be heading and what would take place.”

With the uncertainty of delay in shipment and increase in tariffs and duties, Ramhit said there may be a high chance of job losses at Rock Hard which employs almost 300 people.

“The company will try its best to keep its staff employed for as long as we can sustain. If it persists any longer, we will not be able to continue.

“I am hoping to resume business on February 1 but it all depends on the outcome of the injunction hearing,” he said.

Further information on the application which seeks an injunction was not provided. Ramhit and his lawyers said more on the matter would be disclosed after the hearing on Thursday.

If Rock Hard fails to overturn the ministry's new policy, a bag of cement, given the 80 per cent proposed increase, could now cost close to $80 up from $42.

Trinidad Cement Limited (TCL) is the only other cement producer in TT and has for many years held the monopoly on cement. TCL is owned by Mexican cement giant, Cemex, and also has subsidiaries across the region, including Barbados and Jamaica.

The TT Contractors’ Association president Glenn Mahabirsingh, however, believed that the price of cement would not be affected by the new policy.

He said, “Since government is using construction to stimulate the economy, maintaining the price of cement would be critical. We do have low levels of activity because of covid19 when compared to what we had between 2007 and 2009. In those days the demand was significant, and it was met.

“We need to monitor the current situation and if it becomes challenging, we will have to engage in stakeholder discussions.”

Mahabirsingh declined comment on legal matter between Rock Hard Cement and the ministry.

The ministry in a media release said it was acting in the interest the population and continued to do so. It noted that market conditions continued to be reviewed to ensure the economic wellbeing of TT and the welfare of all consumers.

“It is regrettable that the importer has chosen to publish advertisements at the same time that the importer has filed proceedings in the court. The (ministry) is unable to respond as the matter is currently before the court,” the statement said.

This is not the first time there has been a dispute with the ministry over the importation of cement.

In 2017, questions were raised in multiple local courts of unfair-trade practices, cement classification and the application of duties and tariffs by the Customs and Excise Division.