Jamaica closer to sugar industry divestment

KINGSTON, Jamaica, June 30, 2008 – Jamaica is closer to privatising its sugar industry, with the signing of an agreement with a Brazilian firm, Infinity Bio-Energy (IBE), for divestment of the government’s assets.

Government-owned sugar factories have racked up debts of J$20 billion (US$) and the Heads of Agreement signed by the two parties sets the stage for divestment on September 30. It is aimed at converting a loss-making venture of the government into a successful one, with spin-offs for the energy sector as well as for the diversification of the industry.

Prime Minister Bruce Golding hailed the agreement as the beginning of the process which will lead to the modernisation of the industry and an increase in its value added contribution to the economy.

“What we are moving into is a cane-growing industry that is modernised and efficient and one that gives the best prospects for our workers,” he said.

Mr Golding added that the partnership with Infinity will strengthen Jamaica’s energy sector through co-generation and ethanol production.

“This government will make sure that this partnership with Infinity works in the best interest of the Jamaican farmers, stakeholders and the Jamaican people,” he assured.

Under the agreement, the Sugar Company of Jamaica (SCJ) will still manage the government’s assets at the six sugar factories, and the workers’ status will not change before the final transfer of assets. After the transfer of assets to Infinity, the government will retain a 25 per cent stake in the company for at least three years.

Chairman of the All-Island Cane Farmers Association, Allan Rickards, said he had been “watching the courtship closely”, adding that he was pleased that Infinity was the partner which the Government had chosen.

For his part, the Chief Executive Officer of Infinity Bio-Energy, Sergio Thompson-Flores, said the company would do everything to make the marriage successful.

“We want to make this into a complete success story,” he said.

Minister of Agriculture Dr. Christopher Tufton is expected to make a statement on the divestment process in Parliament tomorrow.