CEMEX MUST NOT BUY TCL SHARES!
The position of the Oilfields Workers’ Trade Union on the Cemex takeover bid of TCL is very clear. We oppose the takeover as being inimical to the interests of the TCL workers, the company, the country and the nation. And we will do everything within our power to prevent the loss of this valuable nationally owned company from being lost to the giant Cemex.
TCL’s local shareholders will do themselves a great disservice and adversely affect the development of both our local and regional capital markets if they sell their shares to CEMEX. We therefore invite all of TCL’s shareholders to take a stand on this issue. This is also a matter of concern to all citizens of Trinidad and Tobago and indeed of the Caribbean.
The Oilfields Workers’ Trade Union condemns the position taken by Minister Key Valley on the CEMEX take-over bid to be inimical to the interests of the local TCL shareholder and the workers at Trinidad Cement Limited, ARAWAK Cement in Barbados and Carib Cement in Jamaica. Here for example the words of Hector Medina, Cemex’s Finance and Planning Director, - “When Cemex buys a new company, it sends teams of executives to swarm over it looking for savings, efficiency gains and headcount reductions. The need to integrate systems, management techniques and even equipment as far as possible. The company imposes standardization and centralization at every stage of the process to wring maximum savings by reaping economies of scale and tightening controls”.
A 100% take-over by CEMEX will bring only an immediate quick buck to shareholders in a financial environment in which there is already high liquidity and cheap funds. It is the medium to longer-term adverse consequences of an oligopolistic CEMEX ownership and control that must concern the government and the national community. The OWTU insists that the shares held by Pension Plans, Credit Unions and Co-operatives, the Unit Trust Corporation, the National Insurance Board, the E.S.O.P. and other Trustees on behalf of workers and other ordinary citizens must not be sold.
Noted Economist and Independent Senator Mary King stated categorically that “if the shareholders in T&T were to accept cash for their TCL shares then, the new cash available will only add to the problem of high liquidity, low interest rates (that drive low returns on fixed income securities) and a reduction in the available stocks on the local market. The sale will release money that can go chasing the limited shares on the market. Of course share prices across the board will increase but return on capital invested will be reduced.
But the value of TCL to the economy of this country goes beyond the Manning Government ‘private sector’ like policy of selling when the price is high. To sell TCL to Cemex, to allow this sale to which our present Government agreed with such alacrity, is to continue to misunderstand the methodology of constructing a sustainable economy.
And contrary to the expressions by both the Prime Minister and his Junior Minister of Finance, it is the responsibility of the government to protect local industry, shareholders and workers from the international sharks in the waters of the free market system. It seems that the Prime Minister of Barbados understands this responsibility far better than the leaders of T&T. Here what Prime Minister Owen Arthur had to say on this issue stated “that CSME provided opportunities for development of Pan-Caribbean companies and the entrance of an outsider like Cemex would be detrimental to that process”. He said “the consolidation of Caribbean cement production in the hands of one extra regional company is a matter of concern”.
“This matter is going to be an important test case a to what happens to the CSME”. Like others, at home, Arthur is also fearful of how Cemex may act to rationalize TCL’s operations in the region if it gains ownership. He fears the company may close TCL’s Trinidad, Barbados and Jamaica, plants in favour of importing cement produced at a lower cost at its other plants. He said the issue was of “vital interest” to the people of Barbados, some 300 of whom are employed at the TCL subsidiary Arawak Cement Company, but also had wide ranging implications for the entire region.”
CEMEX has recently bought out cement plants in Panama, Puerto Rico and the Dominican Republic. It wishes to remove the small competition that TCL has struggled to establish in the Caricom Market. CEMEX is the world’s third largest producer of cement. Its recent acquisition of the Dominican cement operations, the tremendous capacity that it now owns and the cheap labour that it employs ($2 [US] per day) will present it with all the obvious opportunities to close the Jamaica, Barbados and Trinidad operations and thereafter reduce us to the status of importer and distributor of the product.
TCL, after all, is not an insignificant regional corporation. It owns 100% of the Arawak Cement Company in Barbados, 75% of the Caribbean Cement Company in Jamaica, 75% of Readymix WI Limited, 80% of Trinidad Packaging Ltd. and 60% of another subsidiary TPM. TCL is therefore the major company in the cement industry in the English speaking region and while small in comparison to Cemex, has been able to obtain the kind of size that would enable to survive in the region as well as export to both the Caricom and extra-Caricom market.
Even Tim Nafziger, Chairman of “The Caribbean Investor” had this to say, “but no business decision as significant as this one that affects all of Caricom could ever be so simple as to be based only on a quick profit for the shareholders. When TCL’s track record is examines, their management has; successfully turned around Arawak in Barbados and Carib Cement in Jamaica in a short space of time, acquired Readymix that has shown excellent returns, further integrated its production processes in raw material mining and gypsum sales, added production of paper sacks and slings, and set up an effective marketing, handing and distribution network throughout the region, while fighting dumping from Thailand and Indonesia in both Trinidad and Jamaica. Maybe the company’s most critical stakeholders should have more patience and view the company’s existence in the wider context of the development of the region and its tiny economies.
If it makes sense as a result of the high cost of shipping to have cement production plants in Trinidad, Jamaica, and Barbados to serve the local markets, and there is not a large enough market in any one island to accommodate competing cement companies, then it makes sense for a significant ownership stake to be controlled by local and regional investors. In most markets that Cemex operates, there are competing cement companies, an option that will never be considered only on the basis of market forces. A strategic alliance and some shareholding with Cemex, could certainly make sense, but globalisation or not, Caribbean Investor and the CAIC Times is not prepared to support the casual surrender of total control of such a significant industry to a company outside the region.”
When TCL was privatized in 1988 and had $200m worth of debt forgiven, it could not have been and was not with the intention to once more pass it to the absolute control of the foreign private sector. It was precisely to avoid this that the then government held ‘A GOLDEN SHARE’ of some 29.5%. TCL was considered to be of strategic importance to our local and Caricom development.
TCL has grown since then, with hard work and sacrifice, into an efficient well run and enviable Caribbean enterprise providing good terms and conditions of employment for its workers and reasonable returns to its shareholders. We have worked and struggled too hard to surrender now.
WE MUST NOT CUT OFF OUR NOSES TO SPOIL OUR FACE!
WORKERS’ JOBS ARE AT STAKE!
TCL MUST BE SAVED FROM THE SHARKS!
TROJAN HORSE CEMEX MUST NOT BE ALLOWED TO DESTROY LOCAL AND REGIONAL INDUSTRIES!
SHAREHOLDERS- HOLD ON TO YOUR SHARES!
LET OUR ‘ONE CARIBBEAN, ONE COMPANY’ PHILOSOPHY BECOME A CONCRETE REALITY!
THE OWTU DEMANDS THAT THE GOVERNMENT PROTECTS THE NATIONAL INTEREST