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Cemex
acquisition of Trinidad Cement a battle brewing |
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By John Collins (1)
National
pride results in counter offer by local business people develops and unions,
Barbados government oppose Mexican move.
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PORT
OF SPAIN, Trinidad – The move by Cemex, the giant Mexican producer,
to acquire the Trinidad Cement Ltd. (TCL) (CB July 4), has led to a battle royal
in the twin-island nation of Trinidad & Tobago T&T) as well as in the
region.
While
there are strong of elements of support for the Cemex acquisition in the
country’s private sector, it has also resulted in a nationalistic backlash in
the young nation which only became independent of Great Britain in 1962. The
cement company, originally set up by Portland Cement under British rule, later
became wholly owned by local interests.
 Opponents
of the Cemex acquisition fear the Mexican giant wants to purchase TCL to
eliminate it as a competitor and expand its domination of the cement market
throughout the Caribbean following earlier acquisitions in the Dominican
Republic, Panama, Puerto Rico and Venezuela.
Some view TCL almost as national patrimony and the union, representing its 300
workers, worry they’ll be out of jobs if their plants are closed.
Supporters
of the Mexican move view it as a step in the right direction for T&T as it
adjusts to globalization and a world of fast trade. T government supports the
Mexican acquisition although it is expected to become a big campaign issue in
the forthcoming general elections which must be called by October. The
country’s private sector is divided. The situation is further complicated by
the fact that TCL controls subsidiary plants in Barbados and Jamaica and a
distribution center in Anguilla.
 “The
government has no basis for intervening to stop the sale,” said T&T Prime
Minister Patrick Manning.
A
consortium of prominent local businesspeople have made a counteroffer to rival
Cemex’s takeover bid. Among them is Harricrete Ltd. Which was involved in a
bitter trade war with TCL a few years ago.
Cemex
insists it will not close any of the three TCL plants nor let go any of the 300
workers.
“Cemex
has a history of buying up entities and then shutting them down,” announced
the president of the union representing the TCL workers. “We are not going to
take the lip service they are giving today about job security and talking to the
unions.”
Barbados
plant also involved
In
neighboring Barbados a consortium of businesspeople are also trying to prevent
the acquisition because they want Arawak Cement in Barbados, a TCL subsidiary,
from falling into the hands of Cemex.
TCL also
owns Carib Cement in Jamaica. This is the second attempt by Cemex to takeover
TCL after an earlier attempt in February.
Another
complicating factor is the fact that T&T law requires 25% of a firm to be
locally owned. T&T Trade & Industry Minister Kenneth Valley said the
government was not opposed to the Cemex move and that the government would not
stand in its way. Later he said if he had TCL stock he “would be selling them
all right now.”
Major TCL
stockholders, like the Guardian Holdings and Neal & Massy groups, then
stepped into the picture, criticizing the TCL management for “focusing on
resisting the Cemex move.” They are concerned with the rights of 6,000
shareholders and want them to decide whether to entertain the bid and at what
price.Then the TCL Board removed prominent businessman Arthur Lok Jack as a
director and then another director Steve Bideshi, resigned.
The TCL
Board has now retained JP Morgan Securities to advise them on the proposed Cemex
buyout. A vote by the shareholders on the question is scheduled by July 29.
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1)
Other articles by the well known Caribbean author John Collins can be read
at:
www.pymesdominicanas.com
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July
16, 2002
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