The Italian Firm which was locked in negotiations with the Bruce Golding-led Government to divest the three remaining state-controlled sugar factories has frowned on the offer to take over the loss making entities.

After months of conducting feasibility studies on Frome, Moneymusk and Bernard Lodge, Eridania Suisse says it is no longer interested in taking over the entities.

The announcement was made in Gordon House on Tuesday afternoon by Agriculture Minister Dr Chris Tufton who also announced a new role for sugar divestment point-man Aubyn Hill.

The government has been waiting nervously for months for final word from Italy's Eridania Suisse and its sugar divestment due diligence for the remaining sugar factories that are up for sale.

Dr. Chris Tufton told lawmakers in Gordon House on Tuesday afternoon that Eridania Suisse is not prepared to invest over US$100 million to take over the Frome, Bernard Estate and Monymusk sugar factories.

He said the Italian companies ruled out taking over the sugar factories because they cannot produce the required 200,000 tonnes of sugar annually giving limited returns on investment and a prolonged loan repayment period.

As a result of the decision by Eridania Suisse not to take up the offer the Bruce Golding Cabinet has put in place a plan of action to continue the operations of the three factories including the appointment of Aubyn Hill as the Chief Executive Officer of the Sugar Corporation of Jamaica Holdings Limited.

"A new board of directors composed of nine persons, headed by a Mr. Erwin Gordon , a senior manager of GraceKennedy is now entrenched for the operations of SCJ Holdings. Up to this point Mr. Aubyn Hill was assured of this post but he has been replaced by Erwin Gordon,"

"Secondly Mr. Aubyn Hill has been appointed Chief Executive Officer of that entity. His principal role will be to manage the operation of SCJ Holdings to ensure continued efficiency at Monymusk, Frome and Bernard as well as accelerate the divestment of these assets," Dr. Tufton said.

Dr. Tufton also told parliament that Mr. Hill will be paid an annual salary of $7.5 million as well as a specially arranged commission of one percent of the sugar proceeds if he successfully completes the divestment of the remaining sugar assets.

Meanwhile, the Agriculture Minister has announced the appointment of a Commission of Enquiry to review the Sugar Industry's regulatory institutional and pricing arrangements.

Dr. Tufton notes that a review of the relevance of the current regulatory and pricing arrangements is part of special conditions for the release of approximately 17 million euros in grant funding in the upcoming financial year.

source: radiojamaica

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The company intends to build several plants that would process bagasse, a byproduct of sugar cane production, into small, dense pellets that can be burned for fuel.

A trio of Italian and British entrepreneurs are advancing a $114 million plan to turn the waste from Brazilian sugar cane production into pellets that can be burned in coal-fired and thermal plants.

Their São Paulo-based start-up, Brazilian Pellet, expects to finalize a $45.5 million loan syndicated by the Inter-American Development Bank that would provide two-thirds of the financing for its first burst of development, in the first quarter of 2010.

Several million dollars in seed money came from the three founders, Diego Maurizio Zannoni, Giancarlo de Filippo and David J. Instance, through their Luxembourg-based holding company.

The company intends to build several plants that would process bagasse, a byproduct of sugar cane production, into small, dense pellets that can be burned for fuel.

Mr. Zannoni, an aeronautical engineer, said he has a patent pending on the process which he developed over a two-year period, and tested successfully in a pilot project. He said that Essent Trading, a Dutch energy trading company owned by the German utility RWE, certified the pellets as meeting European Union standards for solid biofuels.

Mr. Zannoni also said that Brazilian sugar mills burn most of their own bagasse to create energy in cogeneration plants, and increasingly have been selling the excess power to the national grid. But 20 percent of the excess bagasse, or about 25 million tons, is left to waste, Mr. Zannoni said.

Brazilian Pellet plans to begin production in the third quarter of 2010 in its first plant in São Paulo, home to more than half the production of Brazil’s sugar cane industry — the world’s largest.

By 2015, Brazil Pellet plans to reach 520,000 tons a year of pellet production, an amount that would produce 2,420 gigawatt-hours annually.

The company plans to sell the pellets to companies in industries like textiles, dairy and brewing that generate steam to power turbines in their manufacturing process.

In Europe, it plans to initially sell the pellets to biofuel traders like Essen, which would then sell it to coal-fired plants. Such plants are increasingly employing biofuels to help them meet tightening European Union standards for carbon emissions. The E.U. has called for 20 percent of total energy consumption to come from renewable sources by 2020.

The European Biomass Association predicts that by 2020 the European Union will use 100 million tons a year of pelletized biofuels from about 13 million tons this year. Now, most European biomass pellets are made from sawdust, a byproduct of the wood processing industry, Mr. Zannoni said.

The company said its process is carbon neutral because the bagasse, if not used, would break down and release dangerous emissions.

“If you just let the bagasse decay it releases methane, and that’s 20 percent more dangerous to the ozone layer than carbon dioxide,’’ said Ivan Nuñez, a banker with the IDB arranging the financing for Brazilian Pellet. “So, burning it instead gives you carbon credits.’’

In fact, a study released last month by the U.N.E.P.’s International Panel for Sustainable Resource Management suggested that biofuels made from production residues, like bagasse, were generally considered beneficial for the environment.

“The nice thing about bagasse is that it’s just garbage,’’ said Gloria Jacobovitz, an adviser to Brazilian Pellet. “It’s different from other biomass because it’s a waste product rather than a plant grown specifically to create energy.’’

source: greeninc.blogs.nytimes

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ITALIAN company Eridania Suisse, a frontrunner in the bid to acquire the remaining three state-owned sugar estates being divested by the Jamaican Government, has inked a US$15-million interim financing deal to save the current crop.

Agriculture Minister Christopher Tufton yesterday told the House of Representatives that the financing arrangements with Eridania, which is conducting a feasibility study on the estates and also looking at the possibility of setting up a refinery at Frome, are independent of the continuing negotiations to divest the estates which are now ongoing and in which itself and Energen Development Limited are contenders.

Eridania was one of four bidders shortlisted by the Government in May as it sought to take the country's loss-making sugar industry off the public purse after an offer from Infinity Bio-Energy fell through.


Tufton said yesterday that the interim financing would allow for the necessary preparatory works for the factories as well as the field maintenance work on the three estates.

He said the Government would in return supply Eridania with 79,000 tonnes of raw sugar in the 2009/2010 crop year.

"The US$15 million is a pre-payment on the supply of this quantum of raw sugar which will be sold to Eridania at a minimum price of euro335 per tonne.
Additionally, Eridania will share with the Government of Jamaica - on a 50-50 basis - any profit made on the final sales price less agreed cost," Tufton told Parliament.

He added that the arrangement would effectively ensure the continued operation of the Frome, Monymusk and Bernard Lodge estates for the next crop year while negotiations to divest the entities are ongoing.

Last month, Tufton told Parliament that Cabinet had signed off on the divestment of the St Thomas Sugar Company to a consortium between Fred M Jones Limited and Seprod, and for the Trelawny Sugar Company to go to Everglades Farms.

At the time, he said in both instances the sugar factories and the attendant facilities, as well as the sugar cane lands were being leased for 50 years with a provision to renew the arrangement for another 25 years.

In 2007, Eridania formed a joint venture with Tate & Lyle for the marketing and sale of all sugar products in Italy. The deal was seen as a vital step in developing new sugar markets following European Union sugar reforms.

source:jamaicaobserver

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Sugar prices are moving up on higher demand

Sugar cane price could rise to Bt1,000 per tonne in the 2008/2009 harvest season, which should guarantee the unchanged supply of cane from last year's level, said Prasert Tapaneeyangkul, secretary general of the Office of Cane and Sugar Board.

"This is the golden year for the sugar cane and sugar industry. From total cane production of 66.5 million tonnes in the harvest season, we can produce 7.1 million tonnes of sugar. But due to lower outputs globally, many countries have demanded higher sugar imports like India, Europe, Pakistan and China, which should boost the sugar prices," he said.

The cane output is below the target of 71.80 million tonnes.

Involving 190,000 farming families and over 1 million jobs, the sugar industry earns Bt80 billion a year, including export revenue. Last year, Thailand's sugar exports totalled Bt47 billion.

To promote the industry, the government has worked with farmers and 47 sugar mills in growing high-yield and high-sugar-content cane. Over Bt10 billion of loans has been allocated to farmers, while the government is considering the proposed Bt1 billion scheme for sugar cane-harvesting truck purchases.

"Sugar prices have risen despite economic slowdown, as many countries like India, China and Europe suffer from natural disasters which led to lower cane production. The primary cane price for the 2009/2010 harvest year should stay above Bt800 per tonne," said Thai Sugar Miller Ltd's chief executive officer Vibul Panitvong.

The previous harvest year's primary price was Bt850 per tonne.

He also believed that due to the high prices, farmers would grow more sugar canes in the next harvest season.

source:nationmultimedia

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France may be the biggest country beneficiary of generous EU farm subsidies, but the most individual multi-million-euro hand-outs go to companies in Italy and Spain, according to a study last week.

The three biggest pay-outs last year went to two Italian sugar companies and a low-profile Milan-based banking group, the first in-depth analysis of recently released data showed.

Sugar group Italia Zuccheri got 139.8 million euros (190 million dollars) last year and another, Eridania Sadam, 125 million euros, the study by the Farmsubsidy.org campaign group found.

Italian bank Istituto Centrale delle Banche Popolari Italiane came third with a payout of 96 million euros although adding together the four other handouts it got over the course of 2008 its total came to 276.4 million euros. Meanwhile, another Italian sugar producer, Societa Fondiaria Industriale Romagnola, Irish pre-prepared foods group Greencore and French poultry company Doux were not far behind with multi-million-euro hand-outs.

Such data on the beneficiaries of EU farm subsidies were one of the most closely guarded secrets in the 27-nation bloc until April 30, when European governments had to publish the data.

Germany, for one, is still holding out while the country's courts weigh a case brought by German farmers who argue that publishing the data amounts to a violation of their privacy.

With the data available so far, Farmsubsidy.org sought to shine light on Europe's "farm subsidy millionaires" -- the 710 beneficiaries of EU farm subsidies that pocketed over one million euros last year.

The elite group received 3.2 billion euros in total last year, or slightly less than 10 percent of the 35.81 billion euros in subsidies Farmsubsidy.org was able to account for.

The Common Agricultural Policy's total budget last year was 55 billion euros, but Germany has not revealed its share and other countries such as Poland, the Netherlands and Slovakia have published only incomplete figures.

Although European farming power France is the biggest overall beneficiary of the farm handouts, the country with the most subsidy millionaires is Italy with 180 or 18 percent of the total.

After Italy, Spain is home to the most subsidy millionaires with 165, followed by France with 142, the Netherlands with 47, Belgium 22 and Ireland with six.

Across Europe, sugar companies figure high on the list of the biggest beneficiaries of subsidies as a result of reform that rewards them with handouts for reducing overcapacity.

Since Italy has gone the farthest in restructuring its sugar industry, its sugar producers have received the most aid.

"It's the sign of a reform that's underway and not a fundamental problem," senior European Commission official Kristian Schmidt said.

Despite the recent progress in shedding light on the payouts, campaigners in favour of more transparency believe there is still more to be done.

"European citizens have the right to know what their taxes are being used for. That can only help farmers put an end to suspicion," said Jana Mittermaier with campaign group Transparency International.

SOURCE: eubusiness

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