PAN-Caribbean Sugar posted a $36 million net income for the seven months to July 31.

The Chinese-owned company, which took over three sugar estates and two factories in Jamaica in August last year, turned a profit following a $709-million loss in 2011.

The positive bottom line was largely due to a $492 million increase in the fair value of growing cane, but the company also posted a $200-million gross profit during the review period, compared to a $72-million gross loss for all of 2011.

“The gross profit was mainly due to the increased production volume of raw sugar and molasses to approximately 56,775 tonnes and 29,946 tonnes, respectively,” said China National Complete Plant Import Export Corporation’s (Complant’s) subsidiary, Hua Lien International, in its filing to the Hong Kong Stock Exchange. “(Sugar and molasses) had lower per unit costs benefiting from the economies of scale and the use of co-generation which reduced diesel fuel cost.”

Pan-Caribbean reduced the average cost of production of sugar and molasses from $77,000 per tonne and $10,000 per tonne, respectively, in 2011, to $66,800 per tonne and $7,600 per tonne, for the seven months ended July 31.

The company’s average selling price for sugar also increased from $60,000 a tonne last year to $70,000 a tonne.

During 2011/12 crushing season, which ran from December to June, Pan-Caribbean produced 60,600 tonnes of sugar in 2011/2012 crop season, which was about 46 per cent of total sugar production of the year in Jamaica.

Since a Government quota, that limits the sale of raw sugar to the domestic market, is set at 60,000 tonnes and assigned to manufacturers proportionally, Pan-Caribbean should be allowed to sell 27,600 tonnes of its self-produced sugar locally this production period, which began in late November.

Pan Caribbean has sale contracts with T Geddes Grant (Distributors) Limited, A&L Distributors Limited, Raachaa Traders Limited and Supreme Quality Export for them to supply the whole of Jamaica and the range of customers includes wholesalers and all kinds of food and beverage manufacturers in Jamaica.

However, it also signed a contract with France-based Sucres et Denrees, in September, to supply approximately 40,000 tonnes of raw sugar to be produced during 2012/13 crushing season.

The local sugar company is projecting that it will produce 70,000 tonnes of raw sugar this year.

Pan-Caribbean Sugar has a three-year commitment to revive the industrial and agricultural production plant and facilities of Frome, in Westmoreland, and Monymusk, in Clarendon, by mid-August 2014.

It also aims to completely change out its rolling stock within two years.

Upon completion of technical modification and upgrade it will be able to produce 154,000 tonnes of sugar annually, accounting for nearly 70 per cent of the total sugar output in Jamaica, and will become a dominant sugar manufacturer in Jamaica.