Trinidad Cement Limited
Annual Report 2012
30
Group CEO’s Report &
Management Discussion 2012
INTRODUCTION
The challenges of the previous year ushered in a difficult start to 2012 – a year
of contrasting halves for the TCL Group. While the first half of the year was
characterised by almost intractable challenges, the second signalled the start
of the rebuilding process.
The Group entered Q1 2012 without access to working capital and supplier
credit. Consequently, plant operations (particularly in Barbados and Jamaica)
suffered tremendously during this period, with frequent interruptions due to
lack of fuel, spares and consumables. Despite negotiating US$10 million in
working capital with its Lenders, and identifying financial institutions that were
prepared to offer this facility, the Lenders were not willing to provide security to
facilitate these new credit arrangements. To further exacerbate the situation,
in late February 2012 the Oilfields Workers’ Trade Union (OWTU) launched an
unprecedented and historic 92-day strike at Trinidad Cement Limited (TCL)
in Trinidad. Notwithstanding the fact that TCL’s management handled this
situation creditably, the strike proved to have far-reaching consequences for
the Group’s business. During the first half of 2012, negotiations continued with
the Lenders, finally culminating in May 2012 with the signing of the Override
and Intercreditor Agreements, removing the cloud of uncertainty over the
Group’s future.
Aturnaroundwas seen tobeemerging inJune2012,when theGroupnegotiated
prepayments on two cement contracts together valued at US$12 million. This
line of working capital was used to initiate long outstanding maintenance
jobs at all operating plants across the Group, but mainly at Arawak Cement
Company Limited (ACCL) in Barbados (kiln/cement mill), Caribbean Cement
Company Limited (CCCL) in Jamaica (kiln 5/mill 5 works) and Readymix (West
Indies) Limited (RML) in Trinidad (refurbished wash plant). While there were
protracted maintenance stops, which impacted on the performance of these
plants in Q2 2012, the Group started the task of re-positioning itself to improve
plant operations, efficiency and productivity in order to deliver positive results
in 2013. Through completion of the debt restructuring exercise, and with the
TCL strike having been referred to the Industrial Court, the Group was able
to focus on strategies for the way forward, including the development of new
markets in the FrenchWest Indies and Latin America.
The strike proved
to have far reaching
consequences for
the Group’s business.
During the first half
of 2012, negotiations
continued with the
Lenders, finally
culminating in May
2012 with the signing
of the Override
and Intercreditor
Agreements,
removing the cloud of
uncertainty over the
Group’s future.
The Year in Review
