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P a g e
TRINIDAD CEMENT LIMITED
SECTION 8: RISK FACTORS
(Continued)
The Company’s overall profitability is sensitive to price changes and minor variations in sales volumes.
Generally, the Company’s customers are price-sensitive. Prices for the Company’s products are subject to
changes in response to relatively minor fluctuations in supply and demand, the general economic
environment, and market conditions, all of which are beyond the Company’s control. Because of the fixed-
cost nature of its business, the Company’s overall profitability is sensitive to price changes and minor
variations in sales volumes.
The introduction into the market of substitutes for cement, concrete or aggregates and the development
of new construction techniques could have a material adverse effect on the business, financial position,
results of operations, liquidity and cash flows of the Company.
Materials such as plastic, aluminum, ceramics, glass, wood and steel can be used in construction as a
substitute for cement, concrete or aggregates. In addition, other construction techniques, such as the use of
dry wall, could decrease the demand for cement, concrete and/or aggregates. Further, research aimed at
developing new construction techniques and modern materials, may introduce new products in the future
that reduce the demand for cement, concrete and/or aggregates. The use of substitutes for cement, concrete
or aggregates could cause a significant reduction in the demand and prices for the Company’s products.
Major cement producers who operate within the CARICOM region can construct new plants designed to
compete with the Company.
Several major cement groups (e.g., LaFarge-Holcim, CEMEX and Argos) operate plants within the
CARICOM region and have the ability to install additional capacity, which may directly compete with the
Company’s regional plants. These competitors have greater financial, technical, marketing and other
resources than the Company, and if these competitors enter into the Company’s markets, the Company may
have difficulty competing. Even though there have been no announcements (lead times usually average five
years), should this happen, it could have a material adverse effect on the business, financial position, results
of operations, liquidity and cash flows of the Company.
The Company is exposed to counterparty credit risk.
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or
customer contract, leading to a financial loss. The Company is exposed to credit risks from its operating
activities (primarily for trade receivables) and from its financing activities, including deposits with banks
and financial institutions, foreign exchange transactions and other financial instruments. The bankruptcy of
one or more of the Company’s counterparties, or the failure of one or more of its counterparties to perform
under their various contracts with the Company, could have a material adverse effect on its business,
financial position, results of operations, liquidity and cash flows.
The Company is subject to restrictions due to non-controlling interests in its consolidated subsidiaries.
The Company conducts certain portions of its business through subsidiaries. In some cases, third-party
shareholders hold non-controlling interests in these subsidiaries. Various disadvantages may result from the
participation of non-controlling shareholders, whose interests may not always be aligned with those of the
Company, in the management of such subsidiaries. Some of these disadvantages may result, among other
things, in the Company’s inability to implement organizational efficiencies and transfer cash and assets
from one subsidiary to another in order to allocate assets most effectively.
