C.G.A. Plans Spin-Off of Plant World Nursery
Almost five years ago, the Citrus Growers Association opened a four-million Belize dollar nursery for citrus plants which it sells to growers. The Plant World Nursery, located off the Southern Highway in Red Bank village, hosts as many as three hundred and fifty thousand plants and is the center of the multi-million dollar industry’s efforts to fight off HLB citrus greening disease and other pests. However, to reduce its debts and expand its capacity to help the industry grow and diversify even further, the Association proposes to spin off or divest the nursery into its own company. It will do this by means of a six million dollar bond managed by the Legacy Fund, the company which is managing efforts by the Belize City Council, St. Catherine Academy and others to raise much-needed funds. Aaron Humes attended the launch this morning at the Biltmore and has the following report.
Aaron Humes, Reporting
There comes a time when, like daughters or sons leaving the family home, it is time to spread your wings and fly. For the Citrus Growers Association, that time has come for the citrus industry’s most significant asset – the Plant World Nursery in Red Bank village, Stann Creek District.
Henry Anderson
Henry Anderson, C.E.O., Citrus Growers Association
“We are always looking to create value for membership and for the industry; so what we are doing here is to create a new investment vehicle, where growers, employees in the industry, other corporate or institutional and other Belizeans can participate in. So that’s what, essentially, we are doing. To do that, Plant World will have to be its own company. What this does it gives the growers participation from the source where they are getting their nursery plants. So, we are looking for example at introducing tolerant root stocks and varieties. When I say tolerant, it means that they can live with and give better production under HLB conditions – the citrus greening disease. Those plants have intellectual property, for example. So the cost of those would be a little bit more than what growers pay now. What this would allow growers to do, then, is to basically hedge that, because if the prices go up they will be making an investment on the other end, or a return on the other end via dividends, then it basically keeps the cost of their inputs more or less the same. For other Belizeans, what it creates is an opportunity to invest and get six percent return in an industry that is not subject to the recession which the country is facing – why? Because the citrus industry sells and does most of its business outside Belize, in markets where things are growing right now.”
While the majority of the funds will be used to reduce the debts of Plant World, some will be set aside for working capital to fund an expansion of the Nursery and increase its varieties.
Thomas Tate
Thomas Tate, Nursery Manager, Plant World
“We are planning to add to the system to improve the tree architecture, so that we have better trees or higher quality trees going out of the nursery. Also we are planning on improving the water system, to improve the quality of water that we use to irrigate the plants. One of the bigger things we are looking at, is to raise the level of the plants in the nursery; at present, we have the nursery on ground cover – with this system, the plants would be on cement slabs, twenty inches above the ground, which will improve the quality of the plants we sell as well.”
With shares to be launched in January, Legacy Fund’s Managing Director, Ervin Perez, says this bold move will help the Association take the bull by the horns and inject some much needed lifeblood into a dying productive sector.
Ervin Perez
Ervin Perez, Managing Director, Legacy Fund
“Citrus Growers (Association), you’ve heard about them – they would be the particular hundred percent owner of the new company, and then would be selling equity in that new company, taking sixty percent equity and selling the forty percent to the market. We are pricing the shares at five dollars, the par value; the minimum subscription is a hundred, and that is to ensure that even the small farmer, mom and pop, can make an investment in this new entity. Dividends is expected to commence the following December, December the first, [2017]. Everybody is talking about the economy, everybody is talking about how the sky is falling down; everybody is running in fear. But there are individuals in the industry who say, when there is challenge, let’s get to work. And this is one of the case where the C.G.A. has decided, as the lead for the small farmers and the farmers to take a very proactive approach to dealing with the challenges of the economy, and deal with the challenges of the industry.”
Aaron Humes reporting for News Five.
According to Perez, the six percent yield is comparable to Belize Electricity Limited’s debentures which sell at the same amount. His argument is that diversifying the stock portfolio into a venture such as this one does more for the productive sector than keeping the money in the bank. The C.G.A. says it is also seeking permission for possible expansion into production of lime and pineapple, expanding its value-added Caribbean Pride and Pinehill product lines.
