Ashford W. Meikle, Staff Reporter
Petrojam's Ethanol Dehydration Plant. - Photo by Phillip Lynch
The Jamaica Broilers Group (JB) says that it will spend $1.1 billion to construct an ethanol production facility which will have an annual ethanol production capacity of 60 million gallons.
In a letter to the Jamaica Stock Exchange yesterday, JBG's company secretary, Peter DePass advised the JSE "The Board of Directors of the company at a meeting held on Monday July 24, 2006 approved of the investment by the Company in the construction and operation of an Ethanol Production Facility. It is expected that this facility will be completed by May of 2007."
The letter also said that Jamaica Broilers "anticipates that the initial capital outlay for this project will be approximately US$17 million, and that same will be financed through a combination of debt and equity resources."
Yesterday, the market reacted positively to the news of the company's expansion plans, with the stock gaining forty-five cents to close at $3.45. The planned ethanol plant, according to analysts, reflected positively on the company's attempts to seek alternative energy sources, especially with the price of oil hovering at US$75 per barrel.
"Jamaica Broilers has been known for its state of the art facilities, so this new development comes at no surprise. If we look at what the company has achieved in the area of superior technology over the years the company has been front-runners in many highly technology-based projects," senior equity analyst at JMMB, Kiesa Ansine, told Wednesday Business yesterday.
Ansine noted, for example, the fact that the company has completely insulated its animal houses from external effects through the use of tunnel houses.
"These houses improve the bird's sanitary conditions and provide a highly controlled environment. So gone are the days when external shocks such as hurricanes or floods would present a noticeable challenge to the company," she said.
Recently Jamaica Broilers commissioned a cogeneration facility (which it acquired in 2004), which provides electricity, which is used in the company's manufacturing processes and also sold to the Jamaica Public Service Company Limited.
The company says that the ethanol plant will be operated completely independent from the cogeneration plant, and it is projecting that the proposed revenue to be generated from the ethanol plant is approximately half of what the company recorded for its 2005 financial year, when it posted $9.1 billion.
