10 July 2014
Brazil: The leaders of the rapidly growing BRIC economy countries, which include Brazil, Russia, India, China and now South Africa, will launch their own development bank at a summit in Brazil in 14-18 July 2014. The BRIC nations are also working on proposals to set up a 'mini International Monetary Fund (IMF),' according to the Russian finance minister Anton Siluanov.
The plan for Brazil, Russia, India, China and South Africa to set up a bank to finance infrastructure projects began in 2012 and the group agreed on the project's outline in 2013 after seeing investors divert money from emerging economies, hurting their currencies. Disagreements over funding, management and where to locate the headquarters of the new entity held up progress, but Siluanov said that the leaders themselves would decide whether it should be based in Shanghai or Delhi when they meet in Fortaleza, Brazil in 14-18 July 2014.
The New Development Bank will be able to start lending in 2016. It will focus chiefly on infrastructure projects and will be available to other members of the United Nations. The five nations will put up an initial US$2bn each in financing with a further US$40bn in guarantees. The financing will eventually build up to US$100bn. Siluanov added that the five leaders would also sign a blueprint agreement on the group's other signature project, a US$100bn fund to steady the currency markets.
"We have reached an agreement that, in the current conditions of capital volatility, it is important for our countries to have this buffer in addition to the IMF," said Siluanov. The mini IMF would act as an emergency fund for members facing currency devaluation or which were hit by sudden currency flight. China will contribute US$41bn, while Brazil, India and Russia will each give US$18bn and South Africa US$5bn.
Barbados: Some 18 major shareholders of Trinidad Cement Limited's (TCL) Arawak cement plant are manoeuvring to force out the current board of directors and install its own directors.
The shareholders pushing to get rid of the board include Republic Bank Limited, the Trinidad National Insurance Board, Trinidad and Tobago Unit Trust and a Barbados' Bourne Investment Inc. Holding 54.7% of the shares of TCL, the aggrieved shareholders are not happy with the way TCL has been managed in recent years.
The Caribbean's only cement producer has faced deep financial problems, despite the favourable competitive position it holds in most Caribbean Community Secretariat (CARICOM) countries. In Barbados the Arawak cement plant is the sole cement provider. TCL also operates Caribbean Cement Ltd in Jamaica, while its biggest operation is in Trinidad and Tobago.
The board members that the upset shareholders want removed include TCL's CEO Rollin Bertrand, who once ran the Arawak Plant, Leonard Nurse, Andy Bhajan, Bevon Francis and Brian Young. In addition to seeking a compulsory meeting of the shareholders of TCL to remove the board forthwith, the group provided their own list of directors to immediately take control of TCL until the close of the first annual meeting following their election.
Canada: Ottawa's Competition Bureau has announced that it will look into the US$40bn merger between Lafarge and Holcim, both of which have extensive operations in Canada. Competition Bureau spokeswoman Mélanie Beauchesne reportedly confirmed the news.
In Canada the regulations require that the Competition Bureau must be given advanced notice of a merger if the Canadian assets generate more than US$82m in revenues and when the assets exceed US$400m. In a joint statement earlier in July 2014 Lafarge and Holcim announced plans to sell all of Holcim's assets in Canada to address potential competition regulations in order to merge their businesses.
Lafarge has operations in Quebec, Nova Scotia, Ontario and Western Canada, while Holcim has plants mostly in Quebec and Ontario. Together, Holcim and Lafarge employ some 9000 people in Canada. The divestment of Holcim's Canadian assets will likely have no effect on industry operations, at least in the short term, according to Regan Watts, Lafarge Canada's spokesman.
"It's impossible to say what will happen exactly," said Colacem Canada's CFO, François Gervais. "We simply don't know what's going to happen. There are too many imponderables. But it's business as usual for us." Regarding Holcim's cement plant in Joliette, Quebec, he added, "Would the plant close? That would be very surprising. Will somebody buy it? Most likely. What will be the impact on the market? Well, who can say? I'm not clairvoyant."