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#399872 - 02/09/11 03:43 PM Cane Industry At Crisis Crossroads
Marty Offline
The cane season is at a crisis crossroads tonight after Belize Sugar Industries today announced that it will have to shut down for three weeks.

The problem is a turbine that feeds the BELCOGEN co-generation plant. IT started giving trouble two weeks into the season - and has reached the point where it must be repaired.

The stoppage sells crisis for a cane season when everything has to go just right for the crop target to be met. And now something has gone very wrong right in the middle of the season.

We spoke with Alfredo Ortega, the Chairman of the Belize Sugar Cane Farmers Association about what the stoppage means:..

Alfredo Ortega, Chairman, BSCFA
"They are experiencing huge problems with the turbines in the Belcogen area, in the Belcogen plant. If this trend continues they might only be able to have operations up until Thursday. According to them they need at least 3 weeks for them to solve this problem because they have to dismantle the turbine completely."

Jules Vasquez
"How do you all recover from something like this? Are you all able to salvage the season after a three weeks stoppage?"

Alfredo Ortega, Chairman, BSCFA
"Well really Mr. Jules what we can see is that we continue experiencing good weather as we have at this point in time. This delay of three weeks means that we will be having 3 more weeks delay in the crop where we had propose that we will have a end time, but with this 3 weeks more, that means that it will throw out 3 weeks more in the end and we hope that we don't have heavy rains in that point in time. If there are heavy rains at that point in time you know that the negative effect of it will affect not only the farmers that will be harvesting at that point in time but it will affect the entire industry for this problem."

Jules Vasquez
"Mr. Ortega, are you worried?"

Alfredo Ortega, Chairman, BSCFA
"Of course yes I am worried because we are experiencing at this point that many farmers are just getting out of their canes that were left in the last crop. There are many farmers that continue to have some of these canes and that means that we will be having 3 weeks more in delays so that means that more cane will be drying up in this kind of hangover that we have and the delays will really create some economic hardship to farmers."

Jules Vasquez
"Earlier I outline a scenario if it rains you might not realize your targets, if the weather is good you will. Speaking from your gut what is your instinct?"

Alfredo Ortega, Chairman, BSCFA
"Well I do believe Mr. Jules that we will be able to reach the target."

Ortega says BSI management has informed them that the turbine problem was an unforeseeable event. For this year's cane season to be considered successful - the farmers would have to deliver 1.1 million tonnes of cane within the 30 week crop period. With the crop period shortened by three weeks, a full 10%, all players have to hope they can make it up on the bake end of the season.

Channel 7


Sugar industry at a standstill

There is late breaking news from the north; and it is not sweet for the six thousand cane farmers that depend on the sugar industry for their livelihood, even though sugar is selling at thirty-three US cents per pound on the world market and is one of the highest paid commodities. After a late start to the 2011 sugar crop, there will be another disruption in milling operations in the next few days. Milling didn’t start until mid December last year after government provided a ten million dollar bailout loan to the cash strapped BSI for the startup operations and third payments to farmers. Earlier today, an emergency meeting was held between the cane farmers and BSI factory personnel to announce a break in production for at least three weeks in the first instance. The delay is due to equipment failure at the BELCOGEN plant, which powers the BSI factory. Two of its turbines are malfunctioning and have to be taken down for urgent repairs. It puts at risk the one point one million tons of cane that are expected to be delivered for the production of one hundred and ten thousand tons of sugar. Farmers are expecting to fetch forty-five dollars and three cents per ton of cane. Alfredo Ortega, Chairman of the Committee of Management for the Belize Sugar Cane Farmers Association, explained the situation via phone today.

Via Phone: Alfredo Ortega, Chairman, Committee of Management, B.S.C.F.A.

Alfredo Ortega

“We just had a meeting with personnel from BSI and they announced to us that they are experiencing problems with the turbines from BELCOGEN. According to them, they had to close one last week and the other one that is surviving at this point in time is decreasing its power potential by about half a megawatt per day. If this trend continues they are saying that they will only be available up to Thursday. So they called an emergency meeting with us so that we can reach an agreement for a stoppage and according to them this stoppage will take around three weeks for them to get this problem sorted out.”

Delahnie Bain

“Have you all been given any idea why the equipment is giving trouble so early in the season?”

Via Phone: Alfredo Ortega

“Well according to the factory people, they didn’t anticipate that they would be experiencing this problem in this particular area of the turbine because yes, according to them, they have changed certain things like switch boxes and bearings and these stuff. But this is somewhat more internal to the machine, to the system. So what they announced before was that the equipment could have run for quite a number of years without experiencing this type of problem. But since they are testing this equipment now, they are identifying this type of problem. They are seeing that by Thursday ten o’clock in the morning they should be receiving all canes of the farmers and they will be liquidated by Thursday night to go to a full closure by Friday morning.”

Channel 5


Temporary shutdown of factory takes harvest into rainy season

Industry insiders say that the quality of cane was greatly improved in this crop and that the temporary shut-down of the factory will extend the harvest into the rainy season. That scenario is likely to compromise the quality of the cane. Ortega also says that farmers are bound to be hit in the pockets.

Via Phone: Alfredo Ortega

“Well, really it will affect in many ways. The farmers, it will affect them economically and also it will carry on the crop for three weeks more than anticipated based on this problem that they are experiencing. But most of all it will be economically because drivers, cutters and everyone will be feeling the pinch at this point in time because as you know, we started somewhat late in December and we have been running quite good at this point in time but it has not been in a way that you can say the cutters and drivers are making a lot of money. So it’s only from hand to mouth that is being done at this point in time.”

Delahnie Bain

Alfredo Ortega

“What about the overall projected production for the season? How will it affect that?”

Via Phone: Alfredo Ortega

“We’re experiencing at this time since harvesting started the effects of grasshoppers and rats and the weather had created a low yield per acre. But we are seeing that yes we might be able to comply exactly with the one point one million that we had agreed in the M.O.U. we signed with B.S.I.”

Delahnie Bain

“And this closure won’t affect that amount?”

Via Phone: Alfredo Ortega

“It will not affect in a certain way but yes it will affect if we have heavy rains coming down somewhat early. But if we continue with this type of weather that we have and the system that we have put in place at this time in regards to harvesting, it might affect so much.”

Since its installation, the BELCOGEN plant has experienced a number of mechanical problems, which caused a shortfall in sugar production in 2010. When we contacted B.S.I. for comment, we were told that we would need to speak to the factory manager, but he was in a meeting.

Channel 5


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#399975 - 02/10/11 04:08 PM Re: Cane Industry At Crisis Crossroads [Re: Marty]
Marty Offline

Temporary shutdown of Tower hill Factory is set for this Thursday

As we told you at the top of the newscast, the temporary shut-down of the Tower Hill Factory is set for this Thursday. Grinding is expected to come to a halt for three to four weeks in the first instance which is likely to extend the 2011 crop into the rainy season. Even if production targets are met, the closure will have a direct financial impact on the farmers and their families. News Five’s Marion Ali reports from Tower Hill.

Jose Rodriguez, Chairman, B.S.C.F.A., Orange Walk

Jose Rodriguez

“They should have had a back-up plan, Plan B. they have a Plan A only. They do have a plan B in itself—they have two turbines—they were depending on another turbine noh, but the other turbine is giving the same trouble. So plan A, plan B is going down.”

The Chairman of the Belize Sugar Cane Farmers Association, Orange Walk branch, Jose Rodriguez, was critical of the operational failure at the Belize Sugar Industries Limited’s BELCOGEN project – both at the mechanical and administrative levels.

The situation is that for the next three to four weeks, or more, the two new turbines that were introduced only a year or so ago, have both collapsed. To get things back to normal, it will require a total shutdown of business at Tower Hill to bring in experts to identify the problem and to correct it.

The setback will cause the 2011 sugar crop to extend well beyond its usual closing time. While the country and the market will not be short-changed in terms of revenues the crop will earn, nor in terms of the availability of that sweet stuff most of us have as a staple on dining tables, those that stand to suffer are the ones who toil in the fields.

Jose Rodriguez, Chairman

“We know the life of the farmer’s life, especially the cutters, their lives are not easy, it’s a hard job and some of them really depend on cutting. It will affect them. Part of the income they are having or salary, they won’t be having that for three weeks.”

And the drivers and cutters we met waiting to deliver their cane were relaxing in the shade near Tower Hill, but their minds were not at ease.

Cane Truck Driver

“We noh wah got job fi three weeks and thing wah get slow. Thing just mi di pick up and ih just wah get slow pan we like that.”

Balbino Batun, Cane Farmer

Balbino Batun

“If this wah stop fi two three weeks that wah affect we wah lot and we have to find weh part fi goh fi work fi two three weeks because we got family fi maintain.”

Candelario Guzman

Candelario Guzman, Cane Farmer

“If they stop, when the rain come, ih wah affect we because right now we deh pan the purity, we noh deh pan the ton of cane we di bring. If this affect we…when the rain come, that wah affect we because if ih rain wah, the cane draw lot of water and then ih noh wah got the amount ah purity weh ih suppose to got.”

For the meantime, cane farmers and their workers have been advised to stop cutting and burning cane for processing and only those truckloads that had already been harvested were accepted today. The sudden stoppage is not a welcomed occurrence, but Rodriguez says the Association and the members are hoping that everything goes as planned to cross this hurdle in as little time as possible.

Jose Rodriguez

“It will delay crop a lot. Let’s hope the weather keeps up with us.”

B.S.I. issued a release this evening in which it explains how the problem came about. The BELCOGEN turbines also supply power to the Belize Electricity Limited. Whether the sudden stoppage will result in power outages is another question. Marion Ali for News Five.

According to B.S.I., sugar production to date is thirty thousand, five hundred and eighty tons, which is a little less than five thousand tons ahead of target.

Channel 5


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#400065 - 02/11/11 04:02 PM Re: Cane Industry At Crisis Crossroads [Re: Marty]
Marty Offline

Sugar Industry woes

In a senate meeting in November last year, Senator Godwin Hulse projected that the sugar content in the new cane crop was possibly better than that of 2009. In his estimate the cane had a minimum sugar content of ten to one. He even went as far as to outline how the mill would be humming and production could be efficient and the country could earn over ninety eight million dollars from cane that’s out there right now in the fields. That cash crop could help the Belize Sugar Industry Factory with its international debts, however, today the sugar factory at Tower Hill shut down for repairs because of faulty turbines. Cane farmers, truckers and cutters are hoping for the best, but it will take not less than three to four weeks before the equipment can be functional for the factory to reopen. It’s another blow to the industry that went into convulsion late last year when there was a delay in the start of the crop and payment to farmers. The P.M. and the Leader of the Opposition both weighed in on the state of that industry.

Dean Barrow

Dean Barrow

“Let us hope in fact the repairs can be done in not more than four weeks and then we can get back up to full production. I believe that all of you know that until that happened, we were well on the way to having the best crop in history in terms of the quality of cane, in term of the efficiency of the delivery system. But man proposes and god disposes.”

John Briceno

John Briceño, Leader of the Opposition

“In 2009, as early as 2009, we were calling the attention of the Prime Minister that there is problems brewing in the Sugar Industry. He refused to meet the cane farmers in February 2009 and because of his refusal to meet with them, a Belizean lost his life, Atanascio Felix Gutierrez, and there is a widow with six children that do not have a father to provide for them. Because he refused to intervene at an appropriate time, 2010 has been the worst sugar crop in history from problems at B.S.I. to the quality of sugar cane being delivered—it was total chaos. It was only when B.S.I. announced that they have a cash flow problem, that they cannot meet the third payment to the farmers, that they do not have the money to be able to start the new crop [the 2010-2011 crop] that the Prime Minister decided to pay attention. And what was ironic is that when we spoke and I spoke to the Prime Minister about the issue, I promised that I was going to assist and it is through our intervention that we came up with the plan that he presented to parliament and I mean we have the evidence to show. I met with the private sector—the Belize Chamber of Commerce, the Business Bureau—I met with the Cane Farmers Association—both chairmen—I spoke to the social partners at Social Security in trying to find a compromise or trying to find a way forward as how we can get this ten million dollars for B.S.I. because I want to make it absolutely clear that it is imperative, it is important for us to keep B.S.I. operating because we need the factory just like how we need the cane farmers.”

Channel 5


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#400140 - 02/12/11 04:08 PM Re: Cane Industry At Crisis Crossroads [Re: Marty]
Marty Offline

Cane and confusion!

Belize Sugar Industries (BSI) is reporting that it will be forced to temporarily close down operations at the Tower Hill processing factory for “up to four weeks” after two steam turbines generating about 25 megawatts worth of electric power to supply the sugar mill, as well as power for Belize Electricity Limited (BEL), developed serious problems in the past few days.

The closedown threatens to throw a spanner in the works of the plans developed last November in the wake of Government’s $10-million bailout of the company after former international banking partners ING of the Netherlands, First Caribbean International of Barbados and a consortium of development banks, including the Caribbean Development Bank (CDB), called in more than $124 million in loans and cut off their overdraft facility, which delayed the final payment to cane farmers for the 2009-10 season by several weeks.

In a Memorandum of Understanding signed in Belmopan on November 23, 2010, BSI and the Belize Sugar Cane Farmers Association (BSCFA) had agreed to deliver and grind 1.1 million tons of quality cane to Tower Hill and produce 115,000 tons of sugar in 30 weeks, among other things.

To date, BSI has produced 30,580 tons of sugar from 275,376 tons of cane delivered, about a ratio of 9 to 1, putting them ahead of the expected target. Due to dry weather, BSI has reduced its estimate of cane to be delivered to 1,050,000 tons, leaving 775,000 tons remaining to be ground within 19 weeks, which they hope means that the crop will be finished within the 30 weeks assigned and the 115,000-ton output, the largest since 2004, will still be achieved.

But there is still the problem of the back-pressure steam turbine, or Turbine A, and the extraction condensing steam turbine, Turbine B.

Turbine A suddenly developed internal problems around January 20, which caused it to deliver less power. According to BSI/Belcogen, “there had been no previous indication of reduced output and the machine had been operating normally…normal routine maintenance procedures carried out during the off-crop season did not reveal any abnormal conditions.”

More recently, Turbine B began showing similar problems and it was recommended that it too be taken out of service. Both machines will be cleaned at a service facility in Guatemala, with assistance from a qualified Mexican specialist engineer who will inspect the machines and an American engineer who will supervise their dismantling.

BSI/Belcogen assures that their equipment has not been damaged, and maintains that they can meet their quotas for the European Union (EU) and the United States, only recently renewed after a succession of poor seasons, but maintains that this was their “only viable option” and the “shortest possible route to the early resumption of normal operations.”

For BSI chief exec Joey Montalvo, it represents an “opportunity lost” to ship sugar earlier. Montalvo estimates that for the four weeks or so that the turbines will be down, the company will be paying out some $250,000 to $300,000 in wages to its employees per week, “to do almost nothing.”

In terms of revenue from sugar production and power generation and sales of electricity to Belize Electricity Limited (BEL), Montalvo told us that the actual loss would be “difficult to determine” because it represents mainly potential earnings. He estimates that some 16,000 tons of sugar would have been ground per week.

As for what caused the machines to become soiled, an inspection by an expert from Mexico and a subsequent chemical analysis prior to the cleaning in Guatemala will help BSI get to the bottom of that.

As of this evening, there are no trucks in line at Tower Hill, and all outstanding deliveries were completed earlier in the day. BSI will undertake a comprehensive review of its other machinery to ensure that no further problems develop.

And while BSI waits, they also continue to grapple with their financial situation. Montalvo told us that he knows nothing “formally” of any plans by foreign investors to buy out the Tower Hill operations; he did confirm, as was hinted at last November, that representatives of Honduras’ Banco Atlántida (parent company of Belize’s Atlantic Bank Limited) made a visit to Belize and after some meetings, indicated interest in being part of any future lending consortium that would replace ING and FCIB.

While BSI says that it has spoken with both the BSCFA and Sugar Industry Control Board (SICB) and assured that it would do its part to minimize “any possible overall effects on sugar production,” the BSCFA remains concerned.

Association Chairman Alfredo Ortega told us that the shutdown will “create hardship for farmers,” though he understands and accepts that no one could have foreseen this scenario. The Association’s primary concern is that their cane will be left in the fields at peak time of maturity for harvesting, which risks a loss of valuable sucrose content, and also that an extension of the season would conflict with the rainy season and potentially hamper the targets set last November.

Ortega pointed out that the farmers had been cooperating in the new quality improvement system implemented last year, and as a result had significantly improved on last year’s dismal performance.

The Association intends to closely monitor the situation and yesterday began to distribute herbicide to cañeros for use in the fields, aiming to prevent any losses that could be incurred in the three to four weeks they will be waiting.

This is not good for us, but we have no other option than to ride with the program and hope things work out,” Ortega said.

The Government is also monitoring the impact the closedown will have on national finances. Hugo Patt, the chair of the SICB, told Amandala this evening that they expect to see negative effects on the economy in terms of the delay of foreign exchange caused by the close-down, but had not yet quantified that loss; he said they would have some estimates next week after obtaining and sorting out the necessary information.

Apart from the blow to the farmers, the general impact is expected to be less than originally thought, partially because the dry weather has reduced the crop forecast.

Senator for Business, Godwin Hulse, told us this evening that in terms of quantifying how much Belize loses per day during the time period that the factory is idle, we should not expect to lose money from our sugar sales, and farmers are expected to be paid on time as normal. There is a cost in terms of paying employees of the factory and other issues, but nothing significant, he said.

Amandala


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#400834 - 02/23/11 03:30 PM Re: Cane Industry At Crisis Crossroads [Re: Marty]
Marty Offline

OPERATIONS AT BSI TO RESUME EARLY NEXT WEEK

Two weeks ago BSI suspended its milling operations due to equipment failure at the BELCOGEN plant. Belcogen supplies power to the factory and when the turbines began to fail there was no other option than to decommission those and close down operations. Yesterday, one of those turbines which was sent to Guatemala for servicing was returned and the crop will likely resume early next week. We spoke with BSI’s managing director, Joey Montalvo.

 Joey Montalvo – Managing Director, BSI

“The back pressure turbine which is referred to as the turbine A that has just arrived back on site. We will recommence reassembly of the turbine right away, in fact it is currently in progress and based on our current estimates we would expect to be in position to undertake the commissioning test over this weekend. If all goes according to plan it should be possible to resume cane milling around next Tuesday, March 1st or 2nd. We will review this estimate and we will fine tune it as we progress with the reassembly and with the testing and again hopefully by weekend we should be in a position to provide the required 48 hours of notice to the Cane Farmers Association in relation to resumption in delivery.”

Last year there were numerous disruptions in milling caused by the linkage between BELCOGEN and BSI this time Chairman of the Committee of Management for the Belize Sugar Cane Farmers Association Alfredo Ortega says it is taking its toll.

Alfredo Ortega – Chairman, Committee of Management, BSCFA

"It is bad for us to be out of harvesting at this time but I do believe that the quicker we can start it will ease the burden that farmers are facing at this time. As you know financial burden is one of the biggest because at this point in time is when you put forward the chain of harvesting, the cutters, the drivers, any financial due to not having a crop going at this point in time. Thank God we were able to manage to get the rest of the herbicide to distribute to the farmers so that has kept some of the farmers doing some work at their farm where they have harvested already at the beginning of this crop."

But the farmers are not the only ones with financial burdens. Late last year the Government of Belize provided a ten million dollar bailout to BSI when it could not secure the finances to begin the crop and pay the farmers their third payment. Montalvo sets the record straight as to BSI’s financial situation at this point.

Joey Montalvo – Managing Director, BSI

“We heard the leader of the Opposition saying that BSI will require $30 million by the end of March and that we were hoping to obtain this from Tate and Lyle otherwise we would again be facing a financial crisis. I want to dismiss that it is simply not true; there is no such situation ahead. I would see it as counterproductive to our efforts and I might add here that CCE, the Corporacion Internacional para el financiamiento de infrainstructura who was given by us a mandate to secure substitute loan financing, they have submitted their information memorandum and it is all very positive. I would like to give assurances that we are confident of being able to secure fresh financing by September 2011. I would like to discard any speculation in that regard.”

LOVEFM


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