Major Investment by Cement Company to Boost Construction Sector

• Minister of Industry, Investment and Commerce, Hon. Audley Shaw has said recently that the Caribbean Cement Company Limited’s (CCC) planned investment of another $1.75Bn will contribute to the continued development of the construction sector.
• The current plan is for the company to invest this sum of money over the next three years with the aim of improving its efficiencies and continuing to increase its capacity. This investment will bolster the continued growth in the construction sector as it has proven to be one of the few sectors that have shown consistent growth during the phase of the pandemic.
• The Minister had pointed out that the company has invested approximately $12.5Bn between 2016 and 2020 to expand its capacity and to increase production. This has resulted in CCC boosting its production capacity to 1.32Mn metric tonnes of cement per annum, the highest amount of cement it has produced in Jamaica. This activity in the construction sector will provide an opportunity for growth through investment in other areas such as housing.
• Supported by planned infrastructure and construction projects in 2021, we expect cement consumption to exceed last year’s figures. Additionally, at 14.4%, the potential upside on our current fair value estimate of $98.48 is marginally above the cost of equity of 14.1%. Therefore, NCBCM Research is now changing its recommendation on CCC from a HOLD to a BUY.

(Source: JIS & NCBCM Research)