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#415399 - 09/03/11 09:49 AM Chamber says sugar industry failing
Marty Offline

Needs above-board reform

The Belize Sugar Industries (BSI) needs a financial bailout by the end of next month, in order to forestall foreclosure of the nation’s only sugar producer and exporter.

The Honduras-based Banco Atlántida is said to be the intended buyer, but the Belize Sugar Cane Farmers Association (BSCFA) has also been charged by its members to see whether it is able to purchase a stake in BSI, to grant them a more secure stake in the sector.

The Belize Chamber of Commerce and Industry (BCCI) issued a statement on Monday, August 29, saying that if the Government decides to sell its shares in BSI, this should be done on a commercial basis: no tax exemptions for the bank—no agreements that would squeeze farmers out the picture.

“Today, we have a failing industry requiring drastic, immediate reform, if it is to remain viable,” the Chamber said in Monday’s statement.

It said that the industry should continue to be controlled by the private sector, and it supports the government’s view that it should remain that way.

BSCFA had said that the government is willing to sell its shares in BSI, amounting to just less than a 9% stake, to farmers.

It added that, “...if those shares are to be sold to the cane farming community, in light of the lessons learned from the protracted difficulties affecting the citrus industry, the sale should be opened directly to all cane farmers, who will be granted individual ownership of those shares.” (Shares purchased for citrus growers through the Citrus Growers Association (CGA) continue to be held in trust.)

The Chamber furthermore recommends to Government that, “GOB should safeguard that the Bank’s lending to sugar cane growers is free of terms and conditions that could create an anti-competitive environment vis-à-vis other commercial banks and the Development Finance Corporation.” The bank’s proposal includes US$20 million in financing for cane farmers.

The Chamber urges that Government should “resist injecting any more public funds into the industry, as there exists funding from the European Union Accompanying Measures for Sugar, the Fair Trade Premium and commercial financing that should first be utilized for this purpose.”

It makes the point that Government should not give the Honduran bank any concession not enjoyed by the Belizean farmers.

The Chamber expressed the hope that, “...if substantive reform is undertaken, the outlook for sugar cane production and processing into sugar and other by-products could be very positive.”

It concluded by saying it stands ready to assist in this process, if required.


#415454 - 09/04/11 11:55 AM Re: Chamber says sugar industry failing [Re: Marty]
Marty Offline


Some Mayan scholars say there has been a miscalculation for the date of the Mayan Calendar, that the actual end is THIS YEAR, December, 2011. A time of new beginnings. It sure looks like the Mayan´s were right. The Belize sugar industry is going to get a big shake up, and probable modernization, new orientation to marketing.

Banco Atlantida from Honduras are the front runners in buying out BSI. For BSI investors and stockholders, the Banco Atlantida deal is the best on the table, if it can be consummated BEFORE the end of the month. Otherwise the paradigm changes. A Foreclosure means bankruptcy and shareholders will lose their shares. Forget past dividends owing. New slate for everybody. Out with the 60 / 40 split with existing Sugar Associations. A new deal will be put in place, that is a foregone conclusion. Maybe not for the immediate next crop, but that will certainly be the end. That sharing ratio has been what bankrupted BSI, along with the inability for Cane Farmers able to produce enough cane with quality using old manual methods.

Mechanization is certainly coming in and existing producers will have to buy combines, or whatever is used to harvest cane under mechanization. They can do it cooperatively. One of the delightful things to see this month, has been the QUICK response by the sugar associations to authorize and appoint a technical financial team to find financing for them, to buy the financially strapped BSI sugar factory. They have acted I think about 8 years too late. Their financial team is composed of: David Gibson, Giovanni Diaz, Oscar Alonzo, Manual Herrera. CEO of the BSI factory, Montalvo, says the growers are out of touch with reality. Growers are used to a colonial monopoly and constant government intervention financially, they now find themselves in a position were they have to do something for themselves. They are going to have to learn and learn fast. The Chamber of Commerce is against any government intervention and says Finance Minister Barrow agrees. Let the industry SHAKEOUT and modernize through market forces.
That said, their financial team is working against the clock with 3 weeks left until the ING foreclosure. ING itself is in financial trouble and must collect every penny in bad loans it can, to stave off bankruptcy itself. Montalvo says the mathematics is against the cane farmers. They can´t produce enough sugar to pay off the loans outstanding, even if they got financing, using their colonial production method mentality. A legal team is arriving this week, to aid this fledgling lately formed growers financial investment team.

Enter the new interested parties. The MEXICANS now modernizing the old Libertad Factory up in Orange Walk are interested in the BSI deal. The MEXICANS want to use the sugar and molasses to produce ETHANOL for the 100 million population MEXICAN MARKET. Local people, myself included decided that with the current laws of Belize, it would not be practical to produce ETHANOL under an interfering government system, that exploits permits and licenses to steal businesses. The Mexicans however can export their sugar across the border and process it into ETHANOL there, close by. One way to avoid Belize political shennanigans in business affairs.

The SUGAR GAME is heating up. The only question remaining, is it more advantageous financially to let BSI go bankrupt and into receivership and be bought back for much less than the debts. Or go ahead and take over BSI and buy it under current functioning conditions? Only the bean counters know that solution. That´s why they call it DUE DILIGENCE.

It is said, TATE & LYLE which is now owned by an American conglomerate is interested also. 3 weeks to go and then we see what will play out?


Ray Auxillou of Western Belize Happenings!

#415491 - 09/05/11 08:58 AM Re: Chamber says sugar industry failing [Re: Marty]
Marty Offline

"Ludicrous!" declares BSI’s GM Montalvo

BSCFA Chairman Alfredo Ortega
Consultant David Gibson

The Belize Sugar Cane Farmers Association has announced its intention to purchase a controlling interest in the Belize Sugar Industries in a press release on Monday, August 29.

But BSI Chief Executive Officer Joey Montalvo told The Reporter that Banco Atlantida is proceeding on schedule with its due diligence assessment of BSI, and he viewed the cane farmers’ offer as ludicrous.

The BSCFA release said they have informed Prime Minister Dean Barrow of its intention to put together a workable plan to keep the industry in Belizean hands and expand ownership of BSI to include the 6,000 cane farmers of Corozal and Orange Walk districts.

The BSCFA Committee of Management has been working toward this goal ever since they were given a mandate by a resolution passed at the General Assembly meeting on June 12 this year.

The farmers had another emergency meeting on August 14, at which the members of the association passed a resolution to hire a Technical Advisory and Negotiating Team to do a preliminary study of what the farmers would need to be able to acquire majority shares and ownership of BSI and Belcogen, “without prejudice to the processes of the Grupo Atlantida proposal now underway.”

This team is led by consultant David Gibson, who has sat on the Sugar Industry Advisory Board for a number of years, Giovanni Diaz as the engineering and co-generation consultant, BSCFA Chief Executive Officer Oscar Alonzo who is also an economist, and a financial specialist - Manuel Herrera, who would develop the proposal to be put to the BSI management.

BSI’s CEO Montalvo says the farmers’ proposal is really a pipe dream and out of synch with reality, as both BSI management and the majority shareholder, BSI Employees Holdings Trust, would first have to agree to sell shares to the farmers.

Aside from the 81.29% shares, which the BEH Trust owns, the Government of Belize owns 8.71% of BSI and Tate & Lyle, through its subsidiary, Booker Tate, owns the remaining 10%.

Cane farmers do not have the proven track record of successful cane deliveries, meaning they will not be able to meet the loan payments, even if they were to obtain financing, Montalvo suggests

Cane farmers, on the other hand, take courage from this year’s performance when they achieved the amazing record ratio of 8.5 tonnes cane to make a tonne of sugar (T.C.T.S.)

They did this by finally agreeing to implement a system of cane delivery by appointment, which the BSI management had tried unsuccessfully for years to get them to do.

It was only last year when Government had to advance BSI $10 million to make the final third payment to farmers that the farmers finally appreciated that the industry had its back to the wall and agreed to delivery by appointment.

But while the factory produced 98,488 tones of sugar from 843,786 tonnes of cane delivered this year, sugar production over the past five years has averaged only 90,869 tonnes per year, with the factory grinding more cane and with sugar ratios bordering on 10 Tcts.

Poor cane quality continued to plague the factory, with some truck-loads testing to a ratio of 16Tstc. These had to be turned away.

In 1985, the last year that the Libertad Sugar Factory also operated, BSI produced 102,000 tonnes of sugar. From 1986 to 1994, during the 10 year period when the BEH Trust was putting its earnings towards paying Tate & Lyle for the 81.21 % shares, the factory produced on average 96,300 tones of sugar per year.

Yet from 1996 to 2006, the factory produced on average 112,250 tonnes per year, showing the farmers had delivered close to or more than a million tonnes of cane.

Belcogen was designed on the premise of the factory grinding 1.5 million tonnes of cane, but even with the $30 million that the farmers have earned over the past six years through the European Commission’s Fair Trade program the farmers have not come close to meeting this target.

BSCFA Chairman Alfredo Ortega travelled to Panama this week in search of financing, but the Reporter has been unable to contact him since his return to find out how successful his efforts were.

The release on Monday declared that the Association has met various interested parties from Chicago, Mexico City and Panama to find a way to pay the US$20 million owed to the International Netherlands Group (ING) and the US$10 Million which BSI owes the first Caribbean Investment Bank.

The release said the Association will obtain syndicated financing, and that legal counsel for the financing group would be arriving this week to do due diligence

As the Directors of the BEH Trust stated in a press release, they have already agreed to Banco Atlantida’s proposal, even though it means a dilution of their shares, because the Trust does not have the investment capital that BSI needs to begin next year’s crop, or to pay off the $20 million ING debt. They have the same priorities which existed when the Trust was established in 1995: to ensure the long term job security for all employees; long term prosperity of the entire sugar industry and further expansion of the industry.

They also look forward to the payment of outstanding dividends, which BSI has been unable to pay for the past seven years.

The Reporter

#415568 - 09/06/11 09:12 AM Re: Chamber says sugar industry failing [Re: Marty]
Marty Offline

Sugar Cane Association get financial backing from Mexican Group

The Belize Sugar Industries (B.S.I.) has until the end of September to pay at least thirty million dollars in debt that matures with the ING and FirstCaribbean Banks. Time is running out and a strategic investor has still not been secured to prevent insolvency. The Prime Minister is on record to say that the ninety million dollar proposal from Honduran Banco Atlantida is the only deal in town to acquire majority shares in B.S.I. But as soon as that was uttered, the Belize Sugar Cane Farmers Association (B.S.C.F.A.) announced that it also had an interest in acquiring majority control in B.S.I. to keep the industry in Belizean hands. The industry did not reach the production target this past season but the quality and efficiency had improved. And this morning, the farmers’ representatives said that they have been able to secure financing. According to the B.S.C.F.A., representatives from the Sterling Group from Mexico have done their due diligence and they are willing to back the B.S.C.F.A.’s buyout of the factory.

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

Alfredo Ortega

“About two weeks ago we sent a delegation to Mexico seeking finances for the farmers acquiring majority shares in B.S.I. We have been successful in that we had a visit of two members of the Sterling Group from Mexico who came to do their due diligence so that they can see how the position is and if it is viable for them to invest that money on the farmers in granting us that loan to get majority shareholders.”

Delahnie Bain

“And would this loan cover the debt owed by B.S.I. plus the purchase of the shares? How would it work?”

Alfredo Ortega

“The amount that we are seeking at this point in time is the twenty million that is owed to ING, the three point four million US dollars that is owed to the workers in dividends plus the rest amounting to thirty-five million dollars for working capital. So it’s in the vicinity of ten to twelve million dollars in working capital that we are trying to manage.”

Delahnie Bain

“Can you tell us a bit more about the Sterling Group?”

Alfredo Ortega

“The Sterling Group is a group that works finding financiers and they develop—they have worked in different groups. This group has developed finance for Bancomer and Nissan in Mexico and other groups that have been developed here. So they are coming here with us based on the visit by our delegation and that have seen that the industry in Belize is very viable.”

Delahnie Bain

“How would you say your—what you have been able to work out with the Sterling Group, how would you say that compares to the proposal from Banco Atlantida?”

Alfredo Ortega

“The proposal from Banco Atlantida is that they want to invest but they want to become producers also. There are certain changes that they want in the Sugar Industry Act to be done that will favor them. Versus us, what we are seeking for is the industry to remain in Belizean hands; not only in the farmers hands but in the workers hands so that we can have a viable and a benefit within in the industry.”

Channel 5

#415635 - 09/07/11 09:07 AM Re: Chamber says sugar industry failing [Re: Marty]
Marty Offline

Cabinet says several entities want to buy B.S.I.

The Belize sugar Cane Farmers on Monday disclosed that they had secured financing to acquire the controlling shares in the Belize Sugar Industries Limited. They also said that B.S.I. had not provided them with the pertinent documentation to complete the buyout package and they asked government to intervene. The issue was discussed in today’s Cabinet meeting. A government release says that there are now five expressions of interest in a buyout. And in respect of the request for government intervention, Cabinet says that it is the Employees Trust, which owns majority shares that will decide which proposal to accept. Government also said that it has already offered to transfer its small shareholding in B.S.I. to the farmers. The release further states that “If it is the desire of the majority of the farmers to own B.S.I. outright, that would be laudable.” But GOB says it’s objective is to encourage the best proposal, which should fund B.S.I.’s debts liquidation as well as expansion of the factory.

Channel 5


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