Brazilian Ambassador to Jamaica, Desouza Amaral, has confirmed a joint bid by Coimex and Petrojam for Jamaica's two largest sugar factories. - File
Brazilian ethanol firm, Coimex, has joined Petrojam in a joint bid for government's two largest and most efficient sugar factories, Frome and Monymusk, which together account for 65 per cent of output.
If government signs off on the bid, it will form the basis for the partners, who have already acquired land for the development of a second ethanol plant at a cost of US$16 million, to make ethanol feedstock locally.
It is estimated that the transformation cost of the factories and sugar lands will carry a US$100 million ($6.6 billion) price tag.
Yesterday, Brazilian ambassador Cezar Augusto de Souza Lima Amaral, confirmed reports from a reliable Financial Gleaner source that the Brazilians were eyeing the two plants and had entered into discussions with Government over the possible take-over of the factories.
"Coimex will make a bid together with Petrojam on the two factories," Amaral told the Financial Gleaner.
According to Amaral, the project would involve full replanting of the sugar lands to significantly improve cane yields and productivity.
This, along with modernisation of the plant, would cost in the region of US$100 million, according to the Brazilian's estimate.
Frome, located in Westmoreland, and Monymusk in Clarendon together produce 65 per cent of the government's sugar output, and possess far better conversion rates than the other three state-owned factories - Duckenfield, Bernard Lodge, and Long Pond.
In fact, Monymusk came closest to the government's conversion rate target of 11 tonnes of sugar to one tonne of cane during the sugar crop year ending in July of this year - at 11.13 TC/TS.
Although, the transformation of the factories and land will still focus on the production of sugar, which Amaral believes is still a profitable business, an important element of the project will involve the production of hydrous or wet ethanol locally which could then be dehydrated at the plant located on Marcus Garvey Drive along the city's harbour.
Last September, the Petrojam/Coimex joint venture, Petrojam Ethanol Limited (PEL), started production from its 40 million gallon plant located on Petrojam's existing premises.
That investment cost about US$12 million and has since yielded an estimated J$246 million in profit from J$2.25 billion in revenue from 70 million litres (19 million gallon), up to the end of March 2006.
The partnership, over the next few months, plans to move into the next development phase in which it will build a 60 million gallon plant at a cost of US$16 million, having already secured the land on which it will be sited further along the Marcus Garvey Drive strip, a location which ensures access to the Kingston harbour.
Amaral says that the team is currently finalising the financial arrangements, but have not yet determined a start date for the construction of that plant.
- camilo.thame@gleanerjm.com:
