Wednesday, April 16, 2008

Arawak fighting energy costs too

WAS the recent increase in cement prices unavoidable?

Based on certain factors including comments from the Arawak Cement Company, it does seem so.

The St. Lucy based manufacturing company reported a price increase for its cement in the wake of rising prices for energy.

The international price of oil has impacted on many sectors leading in many instances to higher production costs.

Jeffrey McFarlane, Chairman of the ACC in an address at the beginning of last month, explained that a major factor which impacted the company in 2007 was the high cost of fuel oil. This issue has become a key to companies in Barbados as many manufacturing grapple with fuel costs.

McFarlane told the audience at the Company's Award Ceremony that oil prices rose to an unprecedented level $100 per barrel, we were faced with high fuel costs, coupled with increased prices for the major inputs to the process of making quality cement, required consistent review of our internal operations to ensure that the business remained viable in the face of unfavourable external factors.

McFarlane has also noted a major issue for the lone cement producer in the island and one of the largest in the Caribbean that is energy optimisation.

According to him in 2007, the cessation of their main kiln fuel orimulsion, the company had to use a more expensive fuel.

Therefore as noted by the Chairman the company is embarking on a $15 million project aimed at transforming the operation to solid fuel firing.

Consequently, Petcoke, petroleum based product, which is used extensively in cement plants across the globe was successfully introduced to ACC in October 2007.

The price increase drew a comment from Prime Minister David Thompson who said on television Monday night he could not understand why Barbadians are paying for cement prices that are higher than other countries in the Caribbean.

The Barbados Advocate
April 16, 2008

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