KINGSTON, Jamaica -- Earlier this month, Jamaica began loading the first shipment of clinker being sold to Venezuela under the trade compensation mechanism option of the PetroCaribe Agreement, to which the island has been a signatory since 2005.
Under the PetroCaribe agreement, Jamaica benefits from a deferred financing mechanism on petroleum products purchased from Venezuela, which makes a percentage of the value of each invoice available to the government of Jamaica as a long term concessionary loan. The agreement also includes a trade compensation mechanism that allows the Jamaica to pay a portion of the loan repayments to Venezuela with locally produced goods and services, valued at preferential rates.
This clinker deal represents the first time that Jamaica has utilized the trade compensation mechanism option.
At a brief ceremony to commemorate the first shipment, prime minister of Jamaica, Portia Simpson Miller, hailed the initiative, pointing out that PetroCaribe was not merely a gesture of goodwill from former Venezuelan president, the late Hugh Chavez, but rather a mutually beneficial opportunity to promote trade and deepen south-south cooperation.
"This particular arrangement also allows us to support la Gran Mision Vivienda Venezuela, Venezuela's laudable and ambitious housing project to provide habitat to its people," the prime minister said.
To date, Simpson Miller added, Jamaica has honoured all its debt service obligations to Venezuela.
This first shipment of approximately 20,000 tonnes will be supplied by the Caribbean Cement Company Ltd (CCL) from its plant in Kingston to the Corporación Socialista del Cemento in Venezuela. Between now and April 2014, the company expects to ship some 100,000 tonnes valued at US$8.5 million to the South American nation.
Portland cement clinker, which is produced in Jamaica by sintering ground limestone and shale in a kiln heated to some 1500 C, is an intermediate product of cement production. Clinker and a small amount of gypsum are ground to a fine powder to produce cement. Jamaican clinker has a cement content of 77 percent, which gives a cement potential of 1.2 million tonnes for the 100,000 tonnes being shipped over the period.
At the same event, Jamaica's mining minister, Phillip Paulwell, who is also Member of Parliament for East Kingston and Port Royal, where the CCL plant and pier are located, congratulated his Venezuelan counterpart Minister Raphael Ramirez and the negotiating teams from both companies and countries for their efforts in bringing the deal to fruition.
"This impact of this agreement will not only be felt on the national level, as it allows the country to save foreign exchange in meeting our debt obligations, but also on the local level, as CCL continues to be a major employer and corporate citizen. I encourage more Jamaican manufacturers to pursue this option, and to make good use of the opportunity to access the Venezuelan market," Paulwell said.