GOVERNMENT IS TO close the cash-strapped Hampden Sugar Factory in Trelawny, resulting in the loss of some 200 jobs, Roger Clarke, Minister of Agriculture, told The House of Representatives yesterday.
This was decided, after an assessment team determined that it would not be economically feasible for Government to invest between $370 million and $400 million, the amount it would require for the factory to operate at minimum levels of efficiency.
Two hundred workers will be affected by the decision to close the factory, a move that will cost the Government $66 million.
"I must emphasise that all analyses show that the decision to close the Hampden factory and to mill all the cane in the area at the Long Pond factory is in the best interest of the people of Trelawny and in particular the cane farmers in the parish," Clarke said. He remained confident about the future of sugar in the parish.
The Minister said the Long Pond factory was being extensively repaired to ensure it was in the best condition possible, before the start of the 2002/2003 crop. He explained that Long Pond had the capacity to mill over 300,000 tonnes of cane, whereas available cane in the Trelawny area was estimated at only 170,000 tonnes.
According to the Minister, the Hampden operations had been under review and analysis for several months. He said the situation had been particularly bad over the past five to 10 years, culminating in the estate being placed in receivership two years ago. During this time, the field and factory operations have been in decline.
Between 1997 and 2002, the factory sustained losses of over $450 million. With a capacity to produce 15,000 tonnes of sugar, only 5,000 tonnes were produced during the 2001/2002 season. Among the other reasons given for the closure are:
The factory had been producing sugar at cost of up to US$0.38 cents per pound, the highest in the Sugar Company of Jamaica (SCJ) group.
It had been losing between $6,321 and $21,776 on each ton of sugar produced over the past six years.
Only 46 per cent of 1,284 available hectares are under cultivation.
While the factory will be closed, there are plans to increase the utilisation of the distillery and the cane lands, Mr. Clarke said. He explained that the estate will be restructured and reorganised to concentrate on rum production and cane-farming. Some 1,000 hectares will be planted in cane over the next two years.
Farmers who will be affected by the closure will be compensated for the increased transportation cost to move their cane to Long Pond. The cost will be absorbed by the Trelawny Sugar Company for three years, beginning with the 2002/2003 cropping period.
