Golding touts interest in remaining sugar factories
R. Anne Shirley, Business Writer
The Frome, Monymusk and Bernard Lodge sugar factories are still on the auction block, but Prime Minister Bruce Golding suggested Tuesday that a deal for their divestment was still possible.
Golding in his contribution to the 2010/11 Budget Debate said discussions are well advanced with a potential buyer "with strong financial credentials, which would involve "significant investment in factory capacity and the planting of additional acreage."
Jamaica has already failed twice in two years to sell the three operations. A deal with Infinity BioEnergy of Brazil fell through in 2008, and subsequent negotiations with Eridania Suisse faltered after the Italian sugar refiner completed its due diligence on the assets and found them lacking.
The Eridania plan had included developing a sugar refinery at Frome, Jamaica's largest factory.
Jamaica now has a one-year deal to supply Eridania with 79,000 tonnes of sugar this year. But Government has secured a US$46 million contract with Tate & Lyle for 100,000 tonnes in the next crop year, Golding told Parliament Tuesday.
The new two-year arrangement, under which Jamaica gets upfront payment of US$26 million in year one and US$20 million in year two, will replace the Eridania deal. Tate & Lyle made a better offer, Golding said.
The forward contract proceeds, which include a 50/50 share of profit, said Golding, is to be used as funding source for the three factories.