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Caribbean Islands Iron and Steel
Iron and steel production was the core industry in the new
heavy industry strategy of the 1970s and 1980s. Unfortunately, the
state-owned venture, Iscott, was the most unprofitable industry
located at the Point Lisas complex. Although the modern plant was
technically sound and well integrated into the energy resources and
deep harbors of the complex, it faced serious marketing and
management problems. Iscott's marketing problems were exacerbated
in 1983 when five United States steel companies filed an
antidumping suit against it. The government's deep involvement at
Point Lisas in general, especially its provision of cheap inputs to
iron and steel production, made for a difficult defense against
claims that the government subsidized the steel industry. After
paying countervailing and antidumping duties for several years, in
1987 Trinidad and Tobago signed a voluntary export restraint
agreement with the United States to limit iron and steel exports to
73,000 tons per year for a three-year period. Management problems,
particularly in the steel mill's melt shop, caused steel production
to fall for the first time in 1984 and 1985. Declining production
and large financial losses persuaded the government to hire two
West European firms to manage Iscott's operations under a two-year
contract. Production did increase in 1986, signaling the early
success of the outside management contract.
Iscott's modern facilities at Point Lisas included two direct
reduction plants with a combined capacity of 900,000 tons a year.
The US$500 million plant used imported iron ore from Brazil in
processing its steel. Iron and steel production reached 522,900
tons in 1985, marking the second year of declining production and
the first year of a fall in exports. Exports reached 143,200 tons
in 1985, only 27 percent of production, but exports were expected
to expand again in the late 1980s. Output included direct reduced
iron, steel billets, and wire rods. Direct reduced iron accounted
for 42 percent of the subsector's output, the greatest share of
iron and steel production, and 45 percent of exports. Production of
steel billets represented 33 percent of the subsector's output,
followed by wire rods with 20 percent. Over three-fourths of all
wire rods were exported, whereas under 10 percent of steel billets
were exported in the first half of the 1980s. A large portion of
iron and steel was used domestically because of Iscott's marketing
difficulty.
Data as of November 1987
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