US$120-m sugar factory in limbo
WESTERN BUREAU – Two years after it was first mooted, the construction of a US$120-million sugar factory in Trelawny appears to be in limbo as the government has refused to act as guarantor for investors in the proposed venture, which Agriculture Minister Roger Clarke once described as the “way forward” for the industry.
In August 2002, the All Island Jamaica Cane Farmers Association (AIJCFA) and two American companies – Arkel Sugar Inc and Inter-American Transport and Equipment – submitted a proposal for the state-of-the-art facility to the Planning Institute of Jamaica. The agriculture ministry gave tacit approval of the concept and the proposal was also presented to the finance ministry.
Since then, there has been very little said about the project, which the AIJCFA had projected would be up and running by next year if they were able to put financing in place by last May.
But it appears that investors may have hit a snag with sourcing the funding, especially with the government’s refusal to act as guarantor.
“.We don’t have a difficulty with anybody who wants to set up a state-of-the-art sugar factory here, but when it comes to the sovereign guarantee, it is not something the government will provide,” Minister Clarke told the Observer.
When the factory was first mooted, the minister had touted it as a way to bring down production costs and make the island’s sugar industry competitive. But on Wednesday, he told the Observer that the investors had not done a “real” feasibility study for the construction of the facility.
The factory, according to its proponents, would be able to produce between 60,000 and 700,000 tonnes of refined sugar per year in the initial stages. It would also produce:
. dry ice;
. vinegar; and
. methane gas, as well as facilitate the co-generation of electricity for sale to the national grid.
And while acknowledging that he would be impressed if the facility was actually built, the agriculture minister stressed that the construction would have to be “a business decision by the people who want to set it up”.
But despite the minister’s reservations, the AIJCFA’s corporate affairs consultant, Allan Rickards, was yesterday confident that the project will get off the ground.
Arkel and Inter-American Transport and Equipment, he said, are in “touch” with the minister of finance, Omar Davies.
“Several other people are also interested in the venture,” added Rickards.