OCHO RIOS, St Ann -- The Sugar Company of Jamaica (SCJ) is negotiating a loan of US$30 million (approx J$1.5 billion) with a Japanese group to significantly upgrade government sugar factories, Derrick Heaven, the SCJ's chief executive officer said yesterday.

Heaven said that guarantees for the loan for the factory upgrading were still to be settled.

"We still have a number of things to iron out, such as guarantees, the terms of the loan, the length of time of the loan so these issues are now being discussed," Heaven told the Observer.

Just last December, the government announced that it was putting another $4 billion in the ailing sugar industry, through a debt-guarantee to the Bank of Nova Scotia. From that amount, $3.52 billion was expected to be used for debt payment, leaving the SCJ with approximately half a billion dollars for working capital. And between 1999 and 2001, the government had pumped $5.7 billion in the industry.

Heaven, speaking yesterday at the annual conference of the Jamaica Association of Sugar Technologists (JAST) at the Renaissance Jamaica Grande Resort here, also announced that the SCJ was considering a sugar refinery as the "money spinner" of the factory upgrading programme.

But Heaven and the agriculture minister, Roger Clarke, both made it clear yesterday that at least 300,000 tonnes of sugar would have to be produced by the six government-run estates -- Frome, Monymusk, Bernard Lodge, Long Pond, Hampden and Tropicana -- if the refinery is to be viable. Last year the factories produced just 175,252 tonnes, the lowest in 57 years.

Jamaica does not produce enough sugar to meet its European quota of 126,000 tonnes a year, and the local requirement of 150,000 tonnes, a small amount for the United States and to have some for sale on the world market.

The SCJ boss said that the setting up of a refinery as part of the factory upgrading programme, would make the project more viable.

"We feel that to inform a programme like this, it should be driven by something on the manufacturing side that is going to be the money spinner," Heaven said.

"The refinery would produce 60,000 tonnes of sugar but we are looking at its viability, if we could get sugar production up to a certain level to enable us to export within Caricom," he said.

And the agriculture minister told the conference that a proposal was made for a sugar refinery to be set up in Trelawny -- between Hampden and Long Pond. Clarke told the Observer that the proposal had come from two US companies, Arkel and Inter American.

Heaven said, also, that the money to be spent by SCJ on upgrading would only be justified if the factories are able to get adequate supplies of cane.

But Clarke was sceptical about industry forecasts that sugar production in 2004 would be 230,000 tonnes. "I'll bet you can't make 230,000 tonnes," he said.

Tarrus Riley shoots video for Start Anew

Naomi Campbell to open retrospective photo show

A pleasant evening of music and much more