BSI/ASR proposes new strategy for industry sustainability

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Updated: July 10, 2017

And as the factory performs its best yet, it comes at a trying time for the industry. This year in October, Belize loses its preferential prices on the EU market and sugar prices continue to plummet on the world market. The changes on the EU market however are not a surprise; it is something that the industry stakeholders have been preparing for over the last few years. BSI, for its part, has been looking at new strategies to ensure the industry’s international competitiveness and sustainability. BSI has introduced a mechanical harvesting project and also proposes a Direct Consumption Sugar (DCS) expansion project during the off crop.

Mac McLachlan – Vice President, International Relations ASR Group
“We are in this thing together and we need to look at solution together on how we are going to move things forward not from isolated positions from one side or the other. That is why we recently made a proposal which is part of a strategy we have developed to manage these fall in prices and it’s a strategy to move this mill a little further away from making just raw sugar where there is a very limited return as I have been explaining to make a higher quantity of what we call direct consumption sugar, these are food quality, food grade sugars that are exported and then don’t need to go through a refining process they can be sold directly into the market. We at BSI, I believe make the best quality sugar in the Caribbean and we have quite a track record for a number of years or producing specialty sugars like these the point there is that these sugars attract a higher price than raw sugar so the more of those sugars we can make the more the revenue will be coming back and that revenue is shared between ourselves and cane farmers and we have recently put a proposal to farmers that we would like to invest in the next 18 months another $ 22 million Belizean dollars to increase the production of direct consumption sugars from around about 30,000 tons to 50,000 tons in the next year or two. The purpose there is simply that we are adapting ourselves to the market, it comes back to the point where we can only deal with what is in our own control so for us it’s about the type of sugar we make, for farmers it’s the cost of producing that sugar cane which can be looked at from both the perspective of more cane on less land and also how to reduce the cost of harvesting and delivering that cane to the mills so there is a very clear process and program ahead of us that is looking at these issues.

But the proposal is not being fully embraced by all three associations. According to McLachlan, two of the smaller associations including the Corozal Sugar Cane Producers and the Progressive Sugar Cane Producers have signed onto the project. The Belize Sugar Cane Farmers Association however is still at odds with the idea.

Mac McLachlan – Vice President, International Relations ASR Group
“In order for us to make that investment any investor needs to be secure that there is going to be cane supplied over a period of a return on that investment and also that there won’t be any other uncertainties within the commercial cane purchase agreement that exists so we have asked BSCFA to consider taking that agreement that was agreed two and half years ago to its full seven year term which would be up to January 2022 that gives us all certainty on how we can move forward and as a result we would then make this investment which would be a help and a win to farmers. We are waiting for a response from directors to that. We had agreed that we would go on a series of outreach missions to different districts on the understanding that we would go collectively with the BSCFA leadership to help explain the benefits of this project to cane farmers we’ve had one such session and unfortunately it didn’t quite work out that way instead of us working together to explain the benefits we actually were presented with a counterproposal from the BSCFA talking about reopening a lot of the old issues that were difficult for this industry in recent years such as the issue of bagasse, the issue of ownership of cane, fundamental revisions of the commercial agreement coming at a time when we are confronted with these falling prices with our very genuine efforts at what we can do to try to overcome these issues and so we were frankly a little disappointed with that and we are still in communication with directors to try to see how we can move this process forward.