KINGSTON, Jamaica – The Jamaica Broilers Group (JB) announced today that it has entered into an agreement with West Indies Petroleum Limited for the sale of subsidiary JB Terminal Limited at Port Esquivel (formerly JB Ethanol Ltd) and its shares in ERI Services Ltd (St Lucia) for cash of US$4 million (J$505 million) and assumed liabilities of US$18.5 million (J$2.4 billion) due to Jamaica Broilers Group Ltd.

ERI Services Ltd is the holding company for JB Ethanol, now JB Terminal (Port Esquivel) Ltd.

The transaction is expected to be completed during the first quarter of the company`s financial year, JB said.

Alongside a 120 million-gallon plant, JB Ethanol also managed a 25 million-gallon storage facility at Port Esquivel, St Catherine.

Ian Parsard, senior vice president of finance at JB told OBSERVER ONLINE today that the liabilities owed by the companies being sold will be transferred as debts owed.

“They will now be treated as external debt to be paid by the new owner.”

He said that the terms of payment were confidential.

Buyer West Indies Petroleum is a ship bunkering company based in Kingston.

The planned sale brings to a close an eight-year-old project which ended in losses for JB, whose core business is poultry rearing. JB Ethanol produced fuel-grade ethanol from wet ethanol sourced from Brazil, but increasingly less so over time.

“Shifts in market forces mitigated the fulfilment of previously established tolling contracts and challenged the processing of ethanol for the overseas market,” JB explained its annual report.

Previously, under the Caribbean Basin Initiative (CBI), the country had duty-free access to the United States market, while countries like Brazil were subject to tariff. The situation changed in 2012 when the US did not renew the ethanol tariff on non-CBI countries.

The dehydration plant, operated through subsidiary JB Ethanol Ltd, has largely been idle for two or more years as tolling contracts lessened.

JB’s 2014/15 report commented, “The ethanol dehydration model has been challenged as a result of inconsistent and erratic global trends in ethanol production and trade.”

It noted, however, that the facility had attracted significant attention as a fuel terminal with the interest culminated in one such organisation leasing the facility as a bulk liquid fuel terminal for several months during the year.

In preparation for third party management or new ownership, JB executed a change in the name of the company.

Parsard said that the availability of cash from the sale, if and when the deal is concluded, will allow JB to continue to focus on its strategic plan.

“What it does is allow a full alignment with the strategic plan which focuses on our integrated poultry business.”

JB, he said, is working on growing its poultry operations in Jamaica, the United States and Haiti.

Avia Collinder