Growth & Jobs | Groundbreaking bamboo investment to boost Jamaica’s economy
In what will be a game-changing achievement for Jamaica, Bamboo Bioproducts Ltd (BBP) will start construction in 2021 of the only dedicated bamboo market pulp mill in the Western Hemisphere in Frome, Westmoreland.
Frome has been selected as the site for the initial stages of the project involving the manufacturing of sustainably produced, high-quality bamboo pulp that meet the fibre characteristics and specific properties of traditional wood fibres used by global consumer tissue and personal-hygiene producers.
The project is the brainchild of international investor David Stedeford, chief executive officer of BBP, who conceived it in March 2018 at a tissue conference in Miami, Florida. It will be guided by Jamaican Private Equity and Wealth Management firm Delta Capital Partners Ltd, which will be leading a team that includes international pulp and paper experts.
“Delta Capital Partners is a key equity partner who will also play a role in project management, administration, fundraising, and mobilisation,” disclosed Zachary Harding, Delta Capital Partners’ co-founder and executive chairman.
Harding said that the ambitious operation will involve cooperation across both the private and public sectors.
“The initiative aims to transform approximately 25,000 acres of idle sugar cane lands into prosperous, sustainable bamboo farmland. This will include Government of Jamaica lands in partnership with the Sugar Corporation of Jamaica and privately owned lands to plant, farm, and harvest one million metric tonnes of green bamboo annually,” he shared.
BBP is also working with the Jamaican Forestry Department to source bamboo from small holdings by way of an organised cooperative scheme that will create cottage industries and stimulate entrepreneurships.
In addition to managing its own farmlands, BBP will enter into long-term contracts with local farmers across the island, providing support, technology, and sustainable guaranteed income to ensure that they can more efficiently manage their farms to meet the required quality and yield targets.
The potential benefits to the economy, however, go far beyond just employment. Residual twigs and branches from processing can be used to support cottage industries on the island such as producing straws and stirrers.
Furthermore, there are opportunities also for bioproducts from residual biomass to be used to produce renewable energy by way of processing the biomass into biofuel pellets. The remaining waste will be used in the production of road infill and cementation.
JAMPRO KEY PARTNER
Stedeford underscored the importance of Jamaica’s investment and export promotions agency, JAMPRO, being a key partner throughout the enterprise’s evolution. JAMPRO has been involved with the project from the initial stages of the operation and will continue to collaborate with BBP through to development and integration into the local economy as well as in the future, with the addition of new products from bamboo biomass.
“As with any other start-up, there are various challenges during the developmental stages of the project,” Stedeford stated. “We see the partnership with JAMPRO along with our local partner Delta Capital as beneficial in the provision of guidance and support to allow for the success of the business within this new space. Our relationship will continuously expand with JAMPRO as we invest more into Jamaica across other sectors such as logistics and haulage port expansion.
“BBP’s continued partnership with JAMPRO will be critical to ensure the smooth roll-out and development of an entirely new sustainable industry. The opportunity for international expansion and growth is evident as BBP’s core international market consumes approximately 40 million tonnes of market wood pulp, and the tissue industry has a target to replace traditional wood fibres with sustainable non-wood fibres where bamboo is best suited and qualified due to its inherent softness, strength, and absorbency.
“BBP’s target market is four million tonnes in line with industry demands,” Stedeford said. “BBP’s design capacity is 250,000 tonnes annually, and the plant will be the first bamboo market pulp mill outside Asia. Therefore, further expansion is planned.”
One hundred per cent of pulp production will be exported to North and South America and Europe on long-term contracts in order to secure the success of the business.
Looking further ahead, Delta Capital’s Zachary Harding revealed that the expansion of pulp production and vertical integration in the local production of tissue and hygiene products are both under consideration to create a sustainable business model.
Jamaica has a generous supply of ‘vulgaris bamboo’, the preferred bamboo species for tissue pulp, as well as good terrain and a great climate. These conditions combined with ample rain, irrigated arable land, a readily available workforce armed with key skill sets, plus established port logistics both in Montego Bay and Kingston make Jamaica ideally suited for production and growth for BBP.
“This, paired with continuous learning, will be key in the continuation of business,” the executive chairman insisted. “We foresee that improving on the overall operation and management of the project will indeed stimulate additional business development, promoting diversification of the various end products produced, leading to further business expansion.”
According to Harding, BBP is projecting to generate approximately US$1.5 billion over the first 10 years, producing a 20 per cent internal rate of return.