Complant takes hold of sugar estates

Prime Minister Bruce Golding will today sign over ownership of the remaining state-owned factories - Frome, Bernard Lodge and Monymusk estates - to Chinese firm COMPLANT International Sugar Industry Company Limited, which could mean the employment of more than 4,000 workers over time, reliable sources say.

COMPLANT, a state-backed operation, will be signing a sale and purchase deal worth US$9 million, or J$774 million; a memorandum of understanding for the construction of a 200,000-tonne sugar refinery and ethanol plant, at a cost of US$221 million, depending on a feasibility study, as well as a memorandum which will give the new operators ownership of 25-50 acres of the land immediately surrounding each facility.

Renewable lease

The Chinese firm will also lease some 30,000 hectares of cane lands for US$35 (J$3,010) per hectare per annum for a period of 50 years, renewable for another 25 years, and another US$11 billion is set aside for the rehabilitation of the fields.

The new owners will not take immediate control of the facilities but will instead defer this for June 2011 in order for SCJ Holdings, the Government's management firm, to complete a US$26-million current year-supply contract with British sugar refiner, Tate & Lyle. COMPLANT will, however, have full access to look around and make plans going forward.

The two-year pre-financing deal with the British refiner called for the supply of 100,000 tonnes of sugar annually, in exchange for US$26 million for the 2010-2011 crops, and US$20 million the following year.

Opt-out window

But the arrangement had a window for Jamaica opting out of the second-year pact should the factories be sold by then.

The Chinese company, under the Economic Partnership Agreement with Europe, can sell its sugar to Tate & Lyle to refine in England, and will have access to the United States and CARICOM's 15 markets, Jamaica included, but will start off with brown sugar for the next couple of years until the refinery is constructed.

Three other state-owned factories - Duckenfield, Hampden and Long Pond - were sold last year to Jamaican investors.

The Gleaner understands, however, that lands which sugar workers now occupy, as well as public buildings, will not be included in the arrangement.

mark.titus@gleanerjm.com