Kenneth Guscott, chairman of BDV LLC, and Winfield Murray, president of the All-Island Bee Farmers Association, sign a memorandum of understanding on the production and distribution of local honey. - Contributed
Jamaica's bee farmers have partnered with a group of ex-patriates from Massachusetts in the United States to build out a manufacturing and distribution business for local honey.
On Monday, the All-Island Bee Farmers Association (AIBFA) signed a memorandum of understanding with Boston Diaspora Ventures (BDV) LLC, a company run by Jamaicans in the United States, outlining the terms of the approximately $13 million deal.
BDV has agreed to finance at a cost of $2.3 million the renovation of a honey-bottling plant in St Catherine that AIBFA will operate.
The agreement also calls for BDV to provide an additional US$50,000 (J$3.8 million) as start-up capital for a new distribution company, Logwood Distribution Limited, to be run by the overseas group.
BDV has already advanced US$35,000 to AIBFA and is to provide a further US$100,000 (J$7.6 million) in capital loans to allow for the operation of Logwood Distribution.
Ensuring int'l conformity
In exchange, BDV will retain the right to appoint the managing director of the company for the life of the loan.
Logwood will be responsible for the efficient and profitable operation of the honey-bottling plant and is to ensure that its operation conforms to international certifications, such as HACCP.
It will also have exclusive right to market and sell, locally and overseas, all honey processed by the bottling plant, except the volumes done on behalf of the approximately 1,300 members of the association.
"Logwood shall have the discretion to establish wholesale prices for the products, determine where the products will be distributed, determine which entity or entities will distribute the products, establish the percentage of the products that will be sold locally and that which will be exported to foreign markets; and to make such other decisions that Logwood deems to be in the best interest of the Joint Venture," the MOU stated.
In meeting production targets, Logwood, through the AIBFA, is expected to produce, as well as purchase from farmers across the island to supply the estimated 104,000 gallons of the liquid sweetener needed annually by the renovated plant.
Partly financed by ministry
The St Catherine facility was established in 2006 at a cost of $15 million, $11 million of which was financed by the Ministry of Agriculture under a plan to boost honey exports to Europe where there is a strong demand for the natural sweetener.
The remaining $4 million was funded by the AIBFA. The facility can process some 700 gallons of honey per eight-hour work shift.
Based on 2005 figures provided by the Agriculture Ministry, honey production peaked at 117,000 gallons - doubling the amount produced in 2000.
However, the ministry said the export demand was more than 300,000 gallons.
Jamaican Gold honey and Pure Jamaican honey, produced by Jamaica's bee farmers.