JCPS selling Jamaica Gold sugar brand
Jamaica Cane Products Sales Limited, JCPS, is selling the Jamaica Gold brand under which it retailed sugar, one of the assets it is liquidating to pay off debt as the company winds up its operation.
JCPS once had a monopoly over the marketing of sugar produced in Jamaica under government ownership of the sector, but the company began losing business as the market decentralised under private ownership over the past seven years.
The marketing company lost its last two contracts last year, Worthy Park Estates and J. Wray and Nephew Limited, when they too were granted permits to market their own sugar by the Sugar Industry Authority. JCPS began winding up its operation in January, laying off 30 staff in the process.
Chairman Karl James said on Wednesday that the redundancies cost the company $94 million, and that six workers have been retained on new contracts while JCPS disposes of its remaining assets.
The sugar marketer has already shuttered operations at leased premises on Marcus Garvey Drive in Kingston and at Bernard Lodge in St Catherine, and is selling its equipment.
Arrangements are being made for the payment of bank debt, which now stands at just over $100 million, coming from around $1 billion, James said.
“We are getting the money to pay it off. Government owes us plenty money. TAJ owes us. We are working with them for them to start paying. That will be used to pay off our bank loans,” the chairman said.
James noted that JCPS is owed more than $200 million in tax refunds by Tax Administration Jamaica, TAJ. Asked for confirmation of the figure, the tax agency said it is constrained by law and cannot comment on matters relating to individual taxpayers.
As for the Jamaica Gold brand, James said negotiations for its sale were ongoing, but declined to name the interested party.
JCPS was the first to package brown sugar locally for retail distribution. Its most recent manufacturing partner was Caribbean Depot Limited. In recent years, several distributors have entered the retail market, including Seprod, which packages under the Golden Grove and Eve brands, Worthy Park Estate under the Worthy Park brand, and different proprietary and store brands, such as Hi-Lo supermarket.
James noted that Jamaicans now consume about 65,000 tonnes of brown sugar; and another 80,000 tonnes of imported refined sugar, which is used mostly in manufacturing.
He is also cautioning that Caribbean’s brown sugar markets are under threat from imports.
“A report out of Caricom showed that there are entities bringing in brown sugar. All of that affects the survival of the industry. They are bringing brown sugar from Columbia, Honduras and Guatemala into the Caribbean,” he said.
JCPS was the sole marketer of sugar for nearly three decades up to 2012, when the Jamaican Government killed its monopoly. A marketing permit was issued that year to Chinese producers Pan Caribbean Sugar Company. Another was granted in 2015 to the Seprod-owned Golden Grove Estate, followed by permits to Worthy Park and Wray & Nephew in 2018.
The internal changes were made at a time when Caricom sugar producers were losing preferential access to European markets. James says producers are still allowed access for up to 533,000 tonnes by the European Union, but at a price of US$350 per tonne, which he said was too cheap for local producers.
He also said that if producers focused on a better grade of sugar, this would attract US$600 per tonne from the European market.
Otherwise, he added, the industry’s best foreign market now is the United States, which assigns annual quotas at negotiated prices and currently buys at US$539 per tonne.
Jamaica Cane Products is owned by the Sugar Manufacturers’ Association of Jamaica and the All-Island Cane Farmers’ Association of Jamaica.The company’s board will meet in September to review progress on the wind-up, which is expected to wrap up by the end of October.