Financial analyst Karen Fitz-Ritson urged govt to consider ethanol production

FINANCIAL analyst Karen Fitz-Ritson is urging Government to place priority on ethanol production as one pillar that could boost the productive sector and earn foreign exchange as traditional sources dry up.

"Jamaica Broilers is doing it successfully, their ethanol does not stay here," Fitz-Ritson commented.

Broilers, the island's leading chicken meat provider, entered ethanol production three years ago and exports the fuel to the US.

"We need to look at the growth of engines that can stimulate productivity," Fitz-Ritson declared.

According to Fitz-Ritson, Jamaica has the capacity to tap into alternative energy sources of hydro, wind, solar and especially ethanol to reduce the country's horrendous annual oil bill.

"We can't sit down and say our sugar industry has failed because we are not productive in sugar manufacturing," Fitz-Ritson remarked. "Why don't we take three of those factories and retool them to make ethanol," she said in reference to Government's effort to divest state-owned sugar factories.

Fitz-Ritson was speaking at the Observer's Monday Exchange meeting this week, attended by several prominent financial experts called to analyse the nation's economic future against a background of pending assistance from the International Monetary Fund (IMF) .

In a wide-ranging discussion, analysts questioned Jamaica's capacity to repay given its shrinking economy, lack of productivity and debilitating social problems.

Fitz-Ritson, who operates a financial consultancy, is adamant that the sugar industry as it now stands is underproductive and ethanol export would widen the sectors providing substantial hard currency earnings for the country.

Government already operates an ethanol plant at its Marcus Garvey Petrojam refinery in Kingston but Fitz-Ritson is advocating that state-owned sugar factories also be retooled to process ethanol using locally grown cane.

This approach, she argues, could take full advantage of opportunities opened through the Caribbean Basin initiative (CBI) for the export of the fuel to the US.

Fitz-Ritson's suggestion has gained some resonance from Petrojam's general manager Winston Watson who says that he supports such an approach.

"It is something practical and feasible," Watson told the Observer in an interview on Tuesday.

Watson agreed that using local sugar cane for feedstock would reduce foreign exchange expenditure saying that at least US$44 million would immediately be saved annually through import substitution.

Jamaica currently imports feedstock from Brazil which it converts to anhydrous ethanol for local consumption and export.

According to Watson, the Petrojam ethanol plant, with its capacity of 40 million gallons annually, can supply the 17 million needed for local consumption leaving a substantial amount for export.

Under the CBI agreement Jamaica can sell all its ethanol duty free to the US if it is produced using local sugar cane.

Ethanol produced from Brazilian feedstock attracts a cap of approximately 700 million gallons, but even with the limitation Jamaica is currently unable to capitalise on the opportunity, Watson said.

"Jamaica is nowhere near that 700 million figure," he remarked.

source: jamaicaobserver