Why is Land Marine being made to shoulder the task of supplying cement?
THE Ministry of Finance used to support Land Marine with foreign exchange. “Now that things have improved we will give priority to small contractors.” So said Hughes Adam, Managing Director of Land Marine, in an interview broadcast on SBC on 1st June. According to a reliable source of information11, 000 tons of cement, already bagged, was expected into the country last Sunday. A spokesperson within Land Marine is now confidently saying that the cement shortages will be no more after that shipment.This, he said, would be possible because from now on importation of cement would be constant. Recently, Land Marine was given permission by the government to charge for its services in foreign exchange. It is thought that the cement is being paid for in its entirety by Land Marine using its foreign exchange earnings without having to go to the commercial banks or the government controlled Central Bank.
In principle it is true that Land Marine was supported in the past with foreign exchange, but the facts behind this oddity, reveals an attempt some years ago by certain individuals inside or connected to the SPPF to take control of the two cement silos at the New Port.
Now check the official line. Land Marine will import cement to ration out to small contractors and the public in general. The contractors and private individuals must now place their requirements with Land Marine directly, not a shop or private distributor. If things had improved, as the government claimed, why do we need to ration cement? Why can’t the cement company be assisted with foreign exchange to import cement? They are the owners of the 2 silos with the capacity to store more than 2000 tons of cement at any one time. The cement will be bagged here and supplied in perfect condition to the retailers. Why can’t the small contractors go directly to the silos instead of through Land Marine? After all, this is what everyone used to do until a few years ago.
The truth is by buying cement from the cement company’s silos, the government and the SPPF is eating humble pie. This bit of propaganda is a major cover-up of one of the mysteries surrounding the shortage of cement in Seychelles. It begs the question why Land Marine, a company created and given a monopoly to load and unload cargo at the New Port, had suddenly become a major importer of cement in bags? It is clear that the two silos belonging to the cement company could store 2000 tons of cement, preserve it ready to be bagged when needed by customers. Moreover, the company that owns the silos is a major French multinational. It brings cement to
Until Land Marine started importing cement in bags some years ago (how time flies?) all the cement requirement of the country was provided by a local company called the Cement Company (
In 1970, when the Airport was being built, the company was contracted to supply cement for the construction of the 4000 ft runway.
The company installed two cement silos on the northern end of the of the rock armory, which formed the outer perimeter of the proposed runway, to provide sufficient cement for the construction of the concrete runway without interruption. The cement to feed the silos was brought in by the company’s own vessels which moored next to the rock armory while the cement would be pumped into the silos. When the contract for the construction of the airport terminated, the company transferred their silos to the new port reclamation where it has been ever since.
Not so long ago, all the interests of the British shareholders in the company were acquired by the French multinational Lafarge Group. That is why the company in Seychelles is now called Lafarge (Seychelles) Ltd. Land Marine is a private sector company which has been given a monopoly to load and unload all cargo arriving by sea in Seychelles. The company was created to do just that. So how did it suddenly get into the business of importing cement? The story goes back to the time of the “privatisation” of CCCL, the state-owned stone crusher company set up by the Soviet Government during the one-party state. As the foreign exchange shortage was getting worse, the cement company found that it was accumulating substantial amount of rupees in the banks in Seychelles while its parent company based in Switzerland was financing the import of cement for Seychelles without getting paid because of the shortage of foreign exchange.
The local company approached the government for an arrangement whereby they would obtain foreign exchange to repatriate some of their rupees so that they could continue to bring in cement. After all, without cement there cannot be any construction. But their requests fell on deaf ears. Instead a certain bigwig inside the SPPF hierarchy approached them with an offer to buy the silos. The bigwig claimed he would get the foreign exchange needed while the cement company would continue to wait in the queue.
The Board back in Zurich said they were not interested in selling. Then suddenly, Land Marine started importing cement in bags, and seemed to have no problem getting foreign exchange from the banks even though it was more expensive bringing in cement in bags. Meanwhile the cement company was seemingly bereft of any friends inside the SPPF government. The then Minister of Finance President Michel had no clout or perhaps intention to change the situation even though it would benefit the country.
Being a multinational with plenty of cash, the Cement Company kept to their principles and decided to sit out the official boycott. They reduced their staff to a minimum. They had plenty of rupees in the bank. Land Marine found that importing cement bags was not an easy matter. There were shipping delays, damages due to weather and bad handling. Meanwhile, the economy suffered, while the shareholders of Land Marine pocketed huge dividends, including the government which has a share in the company. The loser were naturally the Seychellois consumers. Foreign investors, given tax concessions and freedom to transact in foreign exchange paid the Cement Company in advance to bring in their cement, store it and supply them as and when they required it.
The shortage of cement has now reached a critical stage for the local consumers but not for the foreign investors. Import has dropped from 65,134 tons in 2000 to 25,631 tons in 2005 (the latest figures available) a 60% drop in volume, despite record construction projects. The shortage has created a lucrative black market with retail reaching three times the wholesale price at the port. The price is being paid by those who need to build or repair their houses. Yet, if only the Cement Company could get all the foreign exchange needed, anyone could buy cement as and when needed, and the black market would disappear overnight. No one in the SPPF, it seems care for the average Seychellois families anymore – if ever they did.
