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Oct 23, 2017

Cane Farmers’ Association Settles with A.S.R./B.S.I.

While it may have gone under the radar during the news last week, News Five has confirmed that the Belize Sugar Cane Farmers’ Association and American Sugar Refining/Belize Sugar Industries Limited have signed an agreement on amendments to their commercial agreement.  Back on September eighteenth, A.S.R./B.S.I. broke ground for an upgrade to the Tower Hill sugar mill that will allow for the increased production of what is called direct consumption sugar.  It proposes to increase its production from thirty to fifty thousand tones over the next eighteen months at a cost of twenty-two million Belize dollars.  A.S.R/B.S.I. had two of the three standing caneros’ associations agree to provide an uninterrupted supply of sugar cane for the next three years. But the largest of the three, the B.S.C.F.A., had asked for a review of the existing seven-year commercial agreement with the Millers before they latched on to the investment in black and white. According to B.S.C.F.A. C.E.O. Oscar Alonzo, B.S.I. has provided in writing the assurance that the investment will be carried out and has provided a timeline and promised to provide reports on its progress, among other things.

 

Oscar Alonzo

On the Phone: Oscar Alonzo, C.E.O., B.S.C.F.A.

“There was a fear that there would have been protracted negotiations regarding this matter that would affect next year’s crop; that was far from the intentions of the B.S.C.F.A., which was to try to conclude this process as quickly as possible, and we have successfully done it last week Thursday with the signing of the amendments. Now as you will recall, B.S.I. had proposed to invest twenty-two million dollars, and we had indicated to them that we needed to consult our membership on this matter; in those consultations, our members had indicated full support for the investment that B.S.I. was proposing to undertake; however, they had indicated that it was necessary for us to negotiate the proposed amendments that it was making as conditions for the investment. The issue with the bagasse also – what we were simply asking for is for them to provide the relevant financial information, for us to determine whether BELCOGEN was making a profit or not, to see whether there were any grounds for negotiation for a change in the payment of the bagasse. This information was provided to us and we looked at it, and indeed, we are seeing that at this point it would not be wise or prudent to proceed with any sort of negotiations for a payment in the bagasse. It would be best to see how it continues to performs over the remaining period of the agreement, so that when that agreement expires, we can see how we can proceed with the matter of the bagasse. So based on the information provided by B.S.I. which we were requesting as a means of seeing whether we accept the amendment to this clause; that was done, so we have agreed to amend this clause in the agreement. The other issue was in relation to discussions and participation in any investment in any future product; that, more or less, we didn’t see any problem with that, that seemed fine with us and we accepted that amendment. And the final one was in relation to the inclusion of the manufacturing allowance in the agreement because it didn’t exist – the manufacturing allowance would be charged for the production of the direct consumption sugar; this is something that was already being charged on the existing consumption sugar. We got information on why this was going to be charged on the expanded volume of consumption sugar; we more or less got satisfactory information that allowed us to agree to that amendment.”

 

The crop season is projected to begin in early December. The industry is coming off one of its most productive seasons for years, with more than one hundred and forty thousand tons of sugar produced from slightly less cane than the previous season.

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