For the past 3 weeks, we’ve been telling you about the financial hardship that the cane farmers in the north are facing. This is after the second payment from the mill for their sugarcane was particularly low this year.
It’s a direct consequence of the world market price for sugar which is substantially lower than previous years. The world market for sugar is over-saturated with supply, and the European market has also shifted for several months now. All the sugar producing nations who sell sugar on the EU must do so in direct competition with European sugar farmers who are more efficient at producing sugar at a lower cost.
Some Belizean farmers are asserting that this year’s earnings from their cane are far too low to maintain their loan commitments to their banks, and they may have to abandon the industry altogether.
But, ASR/BSI has decided to double down on its commercial interest in Belize. They announced today that they are making a 40 million dollar investment to improve the Tower Hill sugar mill over the next 18 months. Once the investment is complete, they intend to produce 50,000 tons of direct consumption sugars. The plan is that these direct consumption sugars will attract a far higher price than the raw sugar that has been exported to the EU, and which is currently those yielding low revenues, and causing pain to farmers all around.
This new 40 million dollar investment is in addition to that 22 million dollar investment that was first announced in September of last year.
This evening, at an impromptu press conference, Mac MacLachlan, the Vice President of International Relations for the ASR Group, told the press that the company’s shareholders hope that this new investment will demonstrate to the farmers and to the citizens of Belize that ASR/BSI is serious about Belize’s sugar industry:
Mac MacLachlan - VP, Int’l Relations, ASR Group
"We are proud announce today that we're about to put in our next major investment into Belize's sugar industry - 40 million Belize dollars over the next 18 months and the purpose of that investment is to ensure that we're building stability for our business moving forward. I think everybody's aware that it's a tough time to be in the sugar business right now, we have extremely low sugar prices and it’s important that we have the confidence and the faith to keep moving forward as an industry in order to provide greater efficiency in sugar production and also to continue to expand the amount of direct consumption food grade sugars we can produce at BSI which are added value products compared to raw sugar."
Daniel Ortiz
"Explain to us what the 40 million dollar investment goes towards - purchasing in terms of equipment, what exactly does it do for the millers and the mill?"
Mac MacLachlan
"Well most of it is invested actually in the factory, so capacity in the boiling house, we'll be building new warehouse for storage and packaging of sugar and basically we'll be improving efficiency in the mill. So we will have a slightly higher throughput of cane and we will be able to have more versatility to respond to market demands."
Daniel Ortiz
"Was this a difficult decision for BSI/ASR to make; specifically given as you said the low cane prices and sugar prices on the world market?"
Mac MacLachlan
"Let's put it this way, I suspect there are not too many sugar business investing at this time but as I said I think it shows the real commitment that BSI has, that our shareholders have to this business - the fact that we're prepared to put that investment in at this time. What we're really hoping is that with this investment we'll galvanize the whole of the industry to come together and to put in place the investments necessary to improve productivity not only at the mill but also at a farm level that helps make this while industry sustainable moving forward. This is a major step of confidence in this business provided by the shareholders of the company but I also hope that it's seen as a clear signal of our role in ensuring this remains the sustainable profitable business for all. I would also remind everybody that one this is a big issue for the whole of Belize not just for the north, it's not just for a miller and cane farmers. A lot of hard currency for this country, all this investment is going in directly to Belize and it's a big boost I think for the national economy so we're proud to make that announcement. We are going to continue to work hard in this business in order to make it long term sustainable and profitable."
In addition to this 40 million-dollar-investment, and the 22 million dollars from last year, ASR/BSI is spending another 10 million dollars for repairs and improvements to the mill and power plant, to prepare for the next grinding season.
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