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Since Friday we’ve been bringing you stories and interviews from the embattled Citrus belt in the Stann Creek district. And so far you’ve been hearing for the first time from the bosses at the Citrus Products of Belize, CEO Henry Canton and the Chairman Michael Duncker. We’ve also shown you inside increasingly modernized facilities at one of the plants. But the most modern operation is in a new subsidiary called Valley Manufacturing that’s producing a world class juice product. Still, is it any surprise that in this industry where there can’t seem to be agreement on anything at all – that both sides can’t agree on this gleaming new investment?

We’ll have the divergent views in the following story...but we pick up our story where we left it last night, with Chairman Michael Duncker defending his CEO – and maintaining that if his related party private contract with CPBL weren’t cost – effective – they would be terminated.

Mike Duncker, Chairman – CPBL
“If Henry Canton does not measure up or the company that he is affiliated with does not measure up they are going to go.”

And Canton says he’s got nowhere to go – because he’s growing this company in a direction approved by the board.

Dr. Henry Canton, CEO – CPBL
“And we’re in the process of aggressively moving towards taking that juice, which we sell as a commodity into the market place, whether it is Europe or US or Caribbean or Central America and putting it into a value added pack and when it leaves here the value of it is doubled or tripled.”

And the crown jewel in this effort is the Valley Manufacturing Company – a brand new hi tech packaging plant – one of three in the world they say – which packages the Pinehill Caribbean Pride juice in what is called a tetra packs – which keeps out all germs – providing for a 6 to 8 month shelf life.

It’s a completely automated, sanitary process from folding to packaging. And it’s not just Caribbean pride – a number of juices sold throughout the Caribbean are packaged here – Valley Manufacturing is contracted to pack those juices.

Dr. Henry Canton,
“We said in the last couple of years that we need to go after the value added stream in order to take the spikes out of the commodity market, we needed to have a value added chain where we could steady the flow and predict a little bit more what the growers are going to get. So last year we took on the value added line which you will see shortly and we also decided to do the feed mill which as I said takes a $2 million loss and converts it into a break even or profit. This last year we spent about $15.5 million in just new investments and between 2002 and now, we spent close to another US$12 million so we’re about US$27 million to US$28 million in property improvement to the plant over the last 7 years.”

It’s a strategic, promising and an expensive PROGRAMME OF investment – but at this point – there’s no profit on it, it’s just starting – and until there is a return the jury is still out on whether canton and his board are leading the industry from strength to strength or on a road to perdition. Squarely on the perdition side of the argument is the Citrus Growers’ Association – they weren’t convinced.

Denzil Jenkins, Citrus Grower
“While I would certainly applaud what has been done by way of development, who are the beneficiaries, not the growers. The majority shareholder have not had the opportunity of seeing the inside of that building when the minority shareholder has been intimately involved in the development of what you have seen.”

Jules Vasquez,
“But Henry you have seen inside of the building.”

Henry Anderson, CEO – Citrus Growers Association
“I have seen inside the building.”

Denzil Jenkins,
“He might have had some special peek in there but ICL as the majority shareholder and those representing ICL, they have never had the opportunity of seeing in there.”

Henry Anderson,
“One of the things that CPBL has done is it has bullishly diversified in a number of areas, taking on $30 million debt. That has increased leverage. It is easy to spend the money, the real work comes in making earnings and I am not saying it won’t make an earning. But what we are saying is that as the majority shareholder, the behaviour you see or the mentality you see these gentlemen demonstrated where they will do all of these things and you just wait and take what’s coming to you. That for this type of money, you are talking about a company with a book value of $100 million. For what it needs in terms of the sustainability of CGA knowing that it owns that $12 million you can’t just sit back and wait to see what will come. $5.2 million net income was made two years ago, it was declared. $11 million was lost, that is not something you can just blow away. And for the record we have never said everything about CPBL is bad. We think it is a good company, we are saying that the governance of CPBL and the direction of CPBL where we don’t know what is happening, that is something that needs to be changed. We own 51%, we should be setting the pace.

If you notice locally you see the product on the shelves, it is good juice but we also notice that what was the brand, Caribbean Pride, if you are into marketing you might say has been downgraded a bit to a slogan, in favour of the Pinehill brand owned by Banks Holdings. We are not sure what are the discussions around this, what are the agreements that have been made. These are the sort of issues where we need to have our five people in the room to ensure that as this unfolds and this partnership unfolds the way it should be that the growers will get the return.

What was told to the growers was that by going down to this route you will be taking your product to the Caribbean and you will gaining value add but if you look at what is playing out, it is just the opposite. It is a case where the investor Banks Holdings has vertically integrated to capture a juice source. So to the growers, you are still just a grower selling your oranges. When you look at the branding and everything which is the ultimate level of value added, it is gone. Now some may well the cost of the paper for the container but you creep before you walk and run.

At the end of the day, when people get used to something in a Pinehill box, Pinehill and go and get a product that tastes just as good also, put it in that box, and it is Pinehill and so that is the point that we are making.”

Denzil Jenkins,
“So you might look at it as an impressive structure, impressive operation but we ask who are the ones reaping the benefits.”

And there’s more to tell still. Tomorrow we’ll wrap up our series on the battle in the citrus industry by squaring off the issue on whose interests the board should represent and we’ll hear from some of the people in the middle of all of this, the employees of CPBL who aren’t sure if they are coming or going.