Wray and Nephew put on hold

The Agriculture Ministry has back-paged a request from rum manufacturer J. Wray and Nephew Limited for access to a substantial block of state-owned cane lands, saying no deal would be struck ahead of the divestment of the Sugar Company of Jamaica.

Wray and Nephew, a subsidiary of the powerful Lascelles deMercado group of companies controlled by William McConnell, wants access to 700 hectares on which to plant additional cane for molasses.

The lands eyed by the company are in Clarendon, and currently idle.

But Agriculture Minister Dr Christopher Tufton says the company's request is on hold until the terms of the SCJ divestment have been fully agreed with sugar and ethanol producer Infinity BioEnergy of Brazil.

Those talks are expected to lead to a signed agreement by June.

Leasing cane lands Tufton said the Government could not lease any of the cane lands currently under the control of the SCJ as they were part of the divestment deal.

The Government is selling the SCJ factories, but leasing the cane lands.

"Right now we are focusing on the negotiations," Tufton said Monday.

"When those negotiations conclude, then we decide how to proceed from there because those negotiations include all current cane lands and, therefore, you can't make an alternative arrangement until you conclude them.

"J. Wray and Nephew - the island's largest manufacturer of rum - has been trying for three years to gain access to the Clarendon lands.

Molasses prices have been rising on the world market, sending Wray and Nephew's production costs higher.

The company, which produces the premium Appleton as well as the Wray and Nephew white rums currently imports 40 per cent of the 60,000 tonnes of molasses it uses annually, but hopes to cut that bill by growing more cane and producing more of its own inputs.

Its distillery is based in St Elizabeth. Additional land needed Ideally, the managing director of Wray and Nephew's production department, Paul Henriques, said the company would want an additional 2,000 hectares of land to grow sugarcane.

For every 1,000 additional hectares of cane planted, he says, the company would be able to cut back on volume molasses imports by 5,000 tonnes.

Wray and Nephew paid an average of US$175 a tonne last year for molasses, with prices fluctuating within a band of US$140 to US$190 per tonne on the international market.

Tufton has not ruled out the possibility of leasing the additional cane lands to Wray and Nephew, saying "in those negotiations there may be possibilities.

"But those possibilities would not emerge until after the negotiations are completed with Infinity, which should be finalised by June.

Source:John Myers Jr., Business Reporter john.myers@gleanerjm.comJamaica GleanerFriday April 4, 2008 http://www.jamaica-gleaner.com/gleaner/20080404/business/business7.html