Tue | Sep 25, 2018

Axed! - More than 200 jobs cut as J. Wray & Nephew shuts down sugar operations in St Bess

Published:Thursday | August 23, 2018 | 12:00 AMChristopher Serju/ Gleaner Writer
Clement 'Jimmy' Lawrence, chairman of J. Wray & Nephew Limited.

Some 226 workers lost their jobs as a result of yesterday's closure of J. Wray & Nephew Limited's operations at its Holland Estate and Casa Marantha in St Elizabeth, a decision the company said was a result of ongoing economic losses caused by the combined effect of escalating operational costs and the declining cost of sugar.

"This doesn't in any way, shape, or form signal any exiting from sugar. We're simply dealing with this area, which is least productive, most costly, most challenging and difficult for us when we did a broad-scale analysis to make that change to cauterise the losses. That, simply, is it," chairman Clement 'Jimmy' Lawrence told The Gleaner.

He explained that the company remained committed to the sugar cane industry as evidenced by its recent multimillion-dollar upgrade of the Joy Spence Appleton Estate Rum Experience in St Elizabeth.

"The Appleton Estate is part of our brand story, so that is a given, but we were forced to make these adjustments just simply because of the challenging economic realities," said Lawrence.

He said that the company's commitment extends to the welfare of the affected workers who served J. Wray & Nephew Limited well and did everything that was asked of them to improve operational efficiencies at both locations.

Lawrence explained: "We had a very good meeting with the staff and the union. It went very well. We outlined all of the support we are giving to our employees, and I think it was very well received. We really went out there to make sure that we treat our people well because they have really done our bidding in terms of programmes, the activities, and changes that we made to try to improve on our efficiency and operations. It was the very least that we could do, and we are very pleased that it was well received."

 

GLOBAL SUGAR CRISIS

 

The chairman pointed out some of the difficulties that resulted in the ongoing economic losses.

"We were forced into this situation simply because of the difficulties there. Just to elaborate a little, Holland is below sea level. You have to pump water off the land. It takes electricity to operate those huge Farbus pumps, and so you can see right at the outset, it's challenging. And even areas that we have to irrigate, you don't irrigate with the same level of cost as it is to pump water off the land. So that really is the fundamental story surrounding our actions," he noted.

The issue was compounded by the global situation with sugar, with Jamaica suffering a major setback with the loss of a guaranteed sugar quota to the European Union last year October. With Jamaica's sugar production costs much higher than most other competing countries, the loss of its main market has been a serious blow.

The J. Wray & Nephew Limited chairman summed up the impact this way: "The production of sugar cane has declined, and global purchasers have been able to purchase sugar at far lower prices than Jamaica has been able to support."

Add to that the fact that local sugar production, which peaked during the 1960s when more than 500,000 tonnes of sugar was produced and exported in 1965, has been grappling with decades of losses, the most recent being a J$1.9 billion loss in 2017.

christopher.serju@gleanerjm.com