By Howard Walker, Staff ReporterTHE SUGAR Company of Jamaica (SCJ) has spent $120 million over the last year on the Frome factory in Westmoreland as part of its long-term rehabilitation programme.
In the face of threats posed to its overseas market arrangements, there is an urgent need to reduce unit production costs of sugar to levels that will better enable the 60-year-old Frome factory to compete with overseas producers.
"This is part of a direct strategy to significantly increase production efficiencies and achieve profitability," said, SCJ's vice-president in charge of finance, Mr Aston Smith.
"We are continuing to build a modern, professional institution through the use of modern technology throughout the enterprise," Smith added.
According to Smith, the $120 million was spent wisely to replace antiquated equipment which failed all too often.
Equipment bought or upgraded are:
Two excavators, to clean the massive drainage
Two harvestors
Upgrading of the generators;
Major upgrading of the two mills
Rehabiliatation of the boilers
According to Mr. Smith, the plan is to take Frome current production of 53,000 tonnes of sugar to 55,000 at the end of this year's crop and to 80,000 by 2006/07.
"As we grow the cane supply, we rehabilitate the factory so it can handle the high volume of production that is expected," said Smith, also operations manager at Frome.
The retooling of the factory has not only improved efficiency but has lifted the morale of the workers, said Mr. Smith. "There has been a dramatic transformation in the factory. The factory morale area is phenomenal."
Over $3 million has been spent to upgrade the sleeping facilities for the workers and the meals provided every day.
It is expected that Frome will make an operational profit of $450 million as a result of the retooling that took place.
Frome, the largest sugar estate in Jamaica, has produced 9,450 tonnes of sugar since its December start in comparison to 8,180 tonnes for the same period last year.
According to Mr Smith, the efficiency of the factory has improved.
"Last year it took 13,000 tonnes of cane to make a ton of sugar, while this year it took 11,000," Smith said of the company's efficiency.
The SCJ is optimistic amidst reports of illicit fires and untethered cattle damaging the cane. However, one of the biggest challenges facing the SCJ over the years is the problem of cash flow.
"We are having some cash flow challenges right now. Operationally we believe there will be a reasonable profit this year.
Mr. Smith, taking an overview of Frome's operations, said: "The economic conditions are challenging, some creditors can't afford to give the level of credit that they use to before. Those who are less able to afford credit, we deal with them upfront.
"We are not awash with cash. By and large, those who had credit agreements with us are still working with us. They understand the nature of the business."
The Sugar Company of Jamaica Limited was formed in November 1993 by a consortium made up of J. Wray and Nephew, manufactu-rers Investments Ltd. and Booker Tate Ltd.
The three companies each hold a 17 per cent equity stake in SCJ, with the remaining 49 per cent being held by the Government of Jamaica.
SCJ was established to purchase the assets of Frome, Monymusk and Bernard Lodge sugar estates and factories that represent approximately 65 per cent of the sugar industry's capacity.
In 1998, the Government became sole shareholder of SCJ by acquiring the interests of the members of the consortium.
Currently, SCJ owns 80 per cent of the market and employs more than 6,000 workers. In the last financial year the SCJ reported an operational loss of $452 million, and for the last three years a combined loss total of $1.7 billion.
