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Sugar deal - Gov't approves divestment of two Sugar Company of Jamaica (SCJ) factories
Government has reached a deal for the sale of the Trelawny and St Thomas sugar companies, as a first step in divesting the country's assets in the sector.
Agriculture Minister Dr Christopher Tufton made the announcement in Parliament yesterday.
It is the first positive move to divest the assets of the debt-ridden Sugar Company of Jamaica (SCJ) since Brazilian company Infinity Bio-Energy's failure to consummate a deal with Government to purchase the five state-run factories and Petrojam Ethanol Limited earlier this year.
The factories are being sold to local private entities Fred M. Jones Estate Limited, Seprod and Everglades, for less than their commercial value.
The St Thomas factory will go to the consortium of Seprod and Fred M. Jones for US$500,000 (J$44.34 million), while Everglades will receive the Trelawny assets for US$1.5 million (J$133.02 million).
Tufton justified the value of the sale by saying that the divestment would save the Government billions of dollars.
"The divestment process, though protracted, is absolutely critical. There is no way that the Government can continue to shoulder an SCJ debt burden which exceeds $16 billion, growing by approximately $2 billion per annum, and still find capital to invest in improving factories that have been in place for over 50 years," Tufton told Parliament.
Trelawny assets
The assets being divested at the Trelawny company include the factory and other buil-dings, along with nearly 40 hectares of land and an additional 7,100 hectares, which will be leased for US$40 per hectare per annum for the first 10 years of the agreement.
The St Thomas sale includes only the factory, 10.5 acres of surrounding land, and a lease for an additional 1,127 hectares of land at US$53 per hectare per year.
Tufton says both companies havecommitted to pumping several million dollars into upgrading the factories.
Trelawny will receive a US$6.2 million (J$549.8 million) expansion over the next five years while US$2.74 million (J$242.9 million) is to be invested in the St Thomas company.
The new owners will maintain 60 per cent of the leased lands for sugar-cane production or related products for 15 years.
As part of the deal, the investors will receive tax incentives that are commensurate with investments of this scale, Tufton said.
He said he would report again to Parliament in less than two weeks on the proposals made by those bidders shortlisted for the Moneymusk, Frome and Bernard Lodge sugar companies.
Last night, Opposition Spokes-man on Agriculture Roger Clarke said the Government had placed itself in a corner after Infinity Bio-Energy backed out of the deal to purchase the sugar assets which should have been sold almost a year ago.
Clarke said that since the failure to divest the company, the factories have been deteriorating.
"It seems the two factories were virtually sold as scrap and that is the situation," he said. "My only concern is that I hope there is something in place which will see to the refurbishing of the plants in a substantial way and, as they hit the ground, they have to get moving with production in the field."
http://www.jamaica-gleaner.com/glean...ead/lead1.html
Government has reached a deal for the sale of the Trelawny and St Thomas sugar companies, as a first step in divesting the country's assets in the sector.
Agriculture Minister Dr Christopher Tufton made the announcement in Parliament yesterday.
It is the first positive move to divest the assets of the debt-ridden Sugar Company of Jamaica (SCJ) since Brazilian company Infinity Bio-Energy's failure to consummate a deal with Government to purchase the five state-run factories and Petrojam Ethanol Limited earlier this year.
The factories are being sold to local private entities Fred M. Jones Estate Limited, Seprod and Everglades, for less than their commercial value.
The St Thomas factory will go to the consortium of Seprod and Fred M. Jones for US$500,000 (J$44.34 million), while Everglades will receive the Trelawny assets for US$1.5 million (J$133.02 million).
Tufton justified the value of the sale by saying that the divestment would save the Government billions of dollars.
"The divestment process, though protracted, is absolutely critical. There is no way that the Government can continue to shoulder an SCJ debt burden which exceeds $16 billion, growing by approximately $2 billion per annum, and still find capital to invest in improving factories that have been in place for over 50 years," Tufton told Parliament.
Trelawny assets
The assets being divested at the Trelawny company include the factory and other buil-dings, along with nearly 40 hectares of land and an additional 7,100 hectares, which will be leased for US$40 per hectare per annum for the first 10 years of the agreement.
The St Thomas sale includes only the factory, 10.5 acres of surrounding land, and a lease for an additional 1,127 hectares of land at US$53 per hectare per year.
Tufton says both companies havecommitted to pumping several million dollars into upgrading the factories.
Trelawny will receive a US$6.2 million (J$549.8 million) expansion over the next five years while US$2.74 million (J$242.9 million) is to be invested in the St Thomas company.
The new owners will maintain 60 per cent of the leased lands for sugar-cane production or related products for 15 years.
As part of the deal, the investors will receive tax incentives that are commensurate with investments of this scale, Tufton said.
He said he would report again to Parliament in less than two weeks on the proposals made by those bidders shortlisted for the Moneymusk, Frome and Bernard Lodge sugar companies.
Last night, Opposition Spokes-man on Agriculture Roger Clarke said the Government had placed itself in a corner after Infinity Bio-Energy backed out of the deal to purchase the sugar assets which should have been sold almost a year ago.
Clarke said that since the failure to divest the company, the factories have been deteriorating.
"It seems the two factories were virtually sold as scrap and that is the situation," he said. "My only concern is that I hope there is something in place which will see to the refurbishing of the plants in a substantial way and, as they hit the ground, they have to get moving with production in the field."
http://www.jamaica-gleaner.com/glean...ead/lead1.html
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