Andrew Wildes, Gleaner Writer
HENRIQUES
DESPITE A 36 per cent cut in the price for sugar on the European Union (EU) market, the primary selling ground for sugar coming from Jamaica and other African, Caribbean and Pacific (ACP) countries, Appleton Estate has embarked on an aggressive drive to find more lands to expand sugar cane production.
Appleton Estate, one of two privately-owned sugar factories in Jamaica, wants to acquire at least another 2,000 hectares of land in Clarendon to increase sugar production by 15,000 tonnes per year. The estate currently produces between 25,000 and 26,000 tonnes of sugar per year on 3,500 hectares of land.
"Appleton has a factory capacity that is substantially higher than the land on which we have to grow cane. We have discussed with the Government the attainment of additional lands, which right now are either not in cane or are inefficiently being caned," Robert Henriques, managing director of Lascelles de Mercado, the parent company of Appleton Estate, disclosed in an interview with The Gleaner.
A SIGNIFICANT AMOUNT
Mr. Henriques was unable to say exactly how much it would cost to acquire the additional lands, only that it would be "a substantial amount ranging in many millions of dollars." He said "New equipment will be purchased and the entire land will have to be ploughed and treated as fresh land, which will all cost a significant amount. After the land is purchased, its preparation and development is likely to take around four years."
But Mr. Henriques said the process was frustrating as the Sugar Company of Jamaica (SCJ) is yet to complete the necessary paper work for the lands to be sold to his company. "They (the Government) have said to us that we can get the land, but we're waiting on Sugar Company of Jamaica to look at this land and to claim the land," he said.
According to Mr. Henriques, "What we lack right now to bring our cost down is more cane, and that's why we're asking for more land and the Government has agreed to give us the land. The Prime Minister has agreed that we'll get it and the Minister of Agriculture has agreed that we should get it, (but) we're just waiting on Sugar Company of Jamaica to get it."
INCREASING CAPACITY
He said acquiring the additional lands to expand production and bring production costs down are part of the company's strategy to cushion the fallout from the EU price cut. "Appleton is willing to start on this right away and to develop these lands and create employment and also create more production. It is important that Appleton get these lands because they will help to increase our capacity, make it more efficient, and bring our cost down," Mr. Henriques pointed out.
When contacted, president and chief executive officer of the SCJ Livingstone Morrison dismissed Mr. Henriques' claim. According to him "Mr. Henriques could not have said that because the issue is much more complex than that." He asserted: "That is a total oversimplification of the issue."
Given the time it will take to prepare these additional lands to produce the required yield, the Lascelles boss empha-sised that it was critical that the acquisition process move faster. He cautioned that the viability of Appleton is threatened each day the process dragged on.
EXPANDING PRODUCTION
"If you get more land, then you can get more cane, and if you get more cane then you can get more sugar coming through the factory. If we get more sugar then it will bring our cost down, on a per tonne basis," he explained. "The returns to us is to help us to stay in sugar, because if we don't bring our cost down, we'll lose and lose and lose and we can't go on like that forever."
As it relates diversification, Mr. Henriques said Appleton was in no hurry to move into other value-added production such as ethanol production and electricity generation at this time. He said the company's focus now is to expand sugar production and reduce operation costs. "What we're looking at is to bring our sugar operations into efficiency and to be able to produce more molasses so that we'll be able to produce rum."
He added: "Right now Jamaica has to be able to supply the EU the U.S. market and the local market so right now the first objective as I think the Prime Minister said is to build up to 200,000 tonnes of sugar."
Mr. Henriques, however, said electricity generation and ethanol production was a part of the company's long term development plan.
