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Tropical Sugar Company Limited, backed by investors from Trinidad & Tobago, Guyana, India, Ghana, and Jamaica, expects the factory its is developing in Clarendon to pay back the investment in five years.
The group is pouring US$40 million into the factory, according the environmental impact assessment report on the project.
In the first year, Tropical Sugar expects to chalk up a loss, but by year two it forecasts a 26-per-cent return on revenue, with even stronger performance in subsequent years.
“That is a significant return, but it’s based on the various markets we will enter and the prices we are securing,” said shareholder Noel McLean in an interview with The Financial Gleaner.
“We are targeting the Caricom for brown sugar, the local market for refined sugar, and the USA and Asia for jaggery, unrefined crystallised sugar,” he said.
McLean, an industry insider who worked at Monymusk and Seprod, recalled that his shift from employee to investor happened after several farmers urged him to revive the Monymusk operation following its closure in 2018 by its Chinese owner, Pan Caribbean Sugar Company Limited. Seprod once operated the Golden Grove Sugar Factory in St Thomas but shuttered it after sustaining big losses.
“I called good friends of mine, and they said yes” to taking a shot at acquiring the Monymusk factory, McLean recounted.
“That’s how we got the team together,” he said.
But the proposal to purchase the factory from Pan Caribbean Sugar was rejected, prompting the team to lease nearby lands from government, instead.
The partners are now going through the approval process for approvals, including production of an environmental impact assessment report that will form the basis for public consultations on the development.
According to Companies Office of Jamaica records, Tropical Sugar Company’s shareholders include Devesh Persaud and Ragindra Persaud both from Guyana, and each with 1,000 shares; Srinivasa Kadem of Trinidad & Tobago, 1,000 shares; Vipul Kulkarni of India, 900 shares; Alfred Adagbedu of Ghana, 150 shares; Noel McLean of Jamaica, 250 shares; and Horace Charoo of Jamaica, 100 shares.
The board has appointed Indian national Anil Jami as CEO, bringing international industry knowledge to the venture, McLean said.
At Tropical, all cane planting and harvesting will be mechanised to address declining cane labour availability, he said.
Tropical will begin with five cane varieties and later introduce a high-yield strain from India capable of producing 150 to 200 tonnes per hectare.
Compared to Jamaica’s average of 65 tonnes, “it’s a game changer,” McLean said.
Tropical will cultivate sugarcane on 12,800 acres of government-leased land and also purchase cane from private farmers in the Clarendon region. The factory, to be located near the former Monymusk estate, is expected to employ 200 direct workers and 500 indirect labourers. Filings indicate that 90 per cent of all workers will be locals.
Tropical is also expected to install a 12.5MW co-generation plant powered by bagasse to serve its energy needs. The plant will feature an electrostatic precipitator to control particulate emissions from the bagasse boiler, and the company is committing to green cane harvesting, and doing away with the practice of sugarcane burning that’s commonly associated with pollution.
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