Complant gets expansion cash

BY CAMILO THAME Business co-ordinator

Wednesday, August 08, 2012    

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Pan Caribbean Sugar’s parent, Complant, has inked a deal that will see a sister company put up 70 per cent of the cash to be used in its expansion in Jamaica.

China National Complete Plant Import Export Corporation (Complant) and its subsidiary Hua Lien International agreed to inject US$38 million and US$89 million, respectively, into a joint venture that will purchase Pan Caribbean Sugar, last Friday.

The joint venture company will also repay outstanding short-term payables US$11 million, which was previously advanced by Complant.

Over US$21 million of the cash injection will go towards working capital. In a filing to the Hong Kong Stock Exchange, Hua Lien showed that Pan Caribbean Sugar’s liabilities exceeded its assets by $455 million.

But most of the funds relates to a US$127 million, three-year commitment, which requires Pan Caribbean Sugar to revive the industrial and agricultural production plant and facilities of Frome, in Westmoreland, and Monymusk, in Clarendon, by mid-August 2014.

The revival plan includes pushing production of raw sugar to 150,000 tonnes — the company made just over 60,000 tonnes of sugar during the crop year that ended May — and increasing its power supply to the national grid.

The company already announced plans to build a US$150-million factory at Monymusk starting next year, upgrade Frome, completely changeout its rolling stock within two years, and plant out cane over a further 6,700 hectares of land (adding to the existing 10,600 hectares), as well as change out all of its cane by 2017, as part of its goal to get better crop yields.

The new factory will also bring online a co-generation plant, which will turn waste material, called bagasse, into 50 megawatts of electricity — more than enough to eliminate the US$1 million-amonth electricity expense at its operations at Monymusk and Bernard Lodge during sugar production (typically December to July).

But the business plan that was laid down last year also includes prospects for the construction of two new alcohol plants to produce rum alcohol at Frome and Monymusk. It also spoke to encouraging and supporting farmers to “grow cassava in a large scale at proper time so as to increase the production of alcohol by using cassava as feed stock”.

In its filing to the Hong Kong Stock Exchange, Hua Lien said that expanding its business in the Jamaica sugar industry would be strategically beneficial “taking into account the Group’s current business of providing supporting services to sweetener and ethanol businesses in African and other countries”.

“Upon completion of the revival plans of the sugar estates (in Jamaica), the group may, subject to the results of the feasibility studies, be initiated to build a dehydration factory at one of the sugar estates to produce fuel ethanol,” the company wrote to the exchange.





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