The president of a group representing makers of a vital commodity, whose prices are rising and capacity is constrained, offers measures to help boost output:

Increased capacity at existing or new sites would help increase the supply of domestically-manufactured products … An important condition to allow new capacity additions is the prospect of an appropriate economic return for investments. One key factor is the need to eliminate uncertainty about timing and providing regulatory certainty. Action to streamline permitting should improve regulatory process predictability and help encourage investment.

Portland Cement Association's Jay Gleason? No, the comments came late last month from his National Petrochemical and Refiners Association counterpart, Bob Slaughter, in reference to Bush Administration proposals aimed at increasing U.S. petroleum refining capacity. Such moves could help temper the type of gasoline and diesel price spikes consumers and businesses have seen in the past year.

Slaughter's observations on refinery permitting have strong parallels in the cement industry, where domestic capacity constraints — partly driven by lengthy lead times on building new mills — are contributing to a tightening supply of higher priced powder. Two days before Slaughter praised White House policies, St. Lawrence Cement pulled the plug on developing a 2.3 million-ton-per-year plant in Greenport, N.Y. The move followed New York Department of State officials' rejection of a permit application for the $353 million project. The agency contended that the plant, slated for a 2,000-acre site on the Hudson River's east bank, was inconsistent with state Coastal Zone Policies. In addition to NYDOS blessing, construction hinged on issuance of 16 other federal, state and local permits.

“In light of this decision and cement shortages in many states, we are taking a number of steps to reinforce supply lines,” noted St. Lawrence CEO Philippe Arto in an April 24 announcement. “This includes a $10 million investment program at our [nearby] Catskill plant to improve reliability and performance. We will also strengthen our network of distribution terminals and long-term contracts with [parent company subsidiary] Holcim Trading to secure sufficient imported cement to meet needs in excess of domestic production.”

The Catskill plant is located on the west side of the Hudson River about 100 miles upstream of New York City, and has 720,000 tpy of capacity using the dated, wet process method of cement clinker milling. Ignoring the new plant's positive economic impact, including more than 1,500 construction jobs and at least $800,000 in annual tax revenue, local environmental and community groups drew battle lines shortly after St. Lawrence outlined the Greenport plan in 1998. Responding to the company's retreat, the leader of one group, the 4,000-member Friends of Hudson, crowed: “Residents downwind of the Catskill plant can count on opponents to take as much interest [there] as we have in Greenport.”

As the group plots strategy around St. Lawrence's Catskill modernization, and the price of cement/ton inches toward the three-digit range, it's encouraging to see that an even more ambitious project than Greenport — a $600 million, 3-million tpy plant in Ste. Genevieve County, Mo., under St. Lawrence's majority shareholder, Holcim (US) Inc. — is set to break ground later this year.

Back in New York, we have to question state officials responsible for economic growth. Are they only interested in assisting subsidy-seeking owners of “nice” businesses? Do they feel any obligation to a deep-pocketed, long-term investor like St. Lawrence, whose plant has employed New Yorkers for nearly a century? In Greenport and Catskill, meanwhile, Friends of Hudson can look for $50/ton cement and $1/gallon gas about the same time as a new employer adding millions to their tax base and Rip Van Winkle shopping alarm clocks.

e-mail: dmarsh@primediabusiness.com