This afternoon, we finally got an opportunity to ask the management of BSI/ASR about the shift in bulk sugar exports, and why it was necessary. They asserted to us that this change makes the best business sense, in order to cut freight costs and increase efficiency in the sugar exportation process. Here's how they explained why:
Malcolm McLachlan - V.P. International Relations, BSI/ASR
"We had to take a business decision for the future of the industry. Now, some 18 months ago, I believe, the dredging of Big Creek Port was concluded, which meant that Big Creek could now bring in large vessels to load directly from the Caye side, and that makes a big difference to the efficiency of exporting raw sugar. As you may be aware, we have been - for decades now - sending our sugar in barges and tugs 122 miles up the New River and down the coast, where it's loaded in a very inefficient way into bulk cargo vessels, using the ships' grabs to do that directly from the barges. Now, a year or so back, obviously seeing this development at Big Creek, we undertook a trial run, trucking some sugar to Big Creek, and loading it there. We evaluated that, and this is purely a business decision that we looked at an investment at Big Creek to put in a loading facility for our raw sugar. We confirmed that. There was no secret behind this. We had alerted Port of Belize City and indeed copied that to correspondence to the stevedores. This is purely a business decision."
Shawn Chavarria - Director of Finance, BSI/ASR
"In order for the industry here in the north to be more competitive from a logistics standpoint, it has to ship from a deep water port. Since 2019, Big Creek is now the only deep water port in Belize. And really, that's the main driver for the decision to move to Big Creek. You can cut down the time that a ship is in the harbour in Belize City from 6 weeks to 5-6 days, and that has significant savings in terms of ocean freight, which is a cost that is shared with the farmers here. So, really that is the key driver, and it's not something that occurred overnight. We had trials that were done. After we concluded the trial, we sat down with PBL and said that we're doing the feasibility to determine what investment would we require to do this. The CWU was invited as well to participate in that information sharing session."
But, while the stevedores and their union are anticipating that their earnings will be hit hard by this shift in bulk exports of raw sugar, the leadership of BSI/ASR are insisting that the Port of Belize will still play a major role in the Sugar Industry. They argue that while raw sugar will be exported through the Port of Big Creek, 50% of the sugar business for this crop will remain at the Belize City port in the form of direct consumption sugars. They have been insisting that the future of this industry depends on the shift in the production of direct consumption sugar. Today, they said that while only 50% of this year's exports will be DC sugar, subsequent years will see a gradual increase:
Malcolm McLachlan
"As we mentioned earlier, we are increasing the amount of direct consumption sugar that we're producing. Now, that direct consumption sugar is containerized. It's bagged sugar, containerized. And as I said, this crop is about 50/50 between raw sugar and bagged sugar. And I would make the point that all that bagged sugar goes out through the port of Belize City. And as we increase that obviously, there will be more and more use of the port of Belize City to export those direct consumption sugars. So, as far as we were concerned, look, this was simply a business case to improve the efficiency of the industry. Every sugar industry has to be looking at continual improvement in its efficiency, in order to stay ahead of the game. The other benefit for this, of course, is that we were taking our assets out of the New River. We're aware that the river has been stressed in recent years. It seemed appropriate to look at unblocking the bottleneck that existed with our exports of raw sugar system."
As you heard, the leadership of ASR/BSI is insisting that this change was no secret and that all relevant parties - including the Christian Workers Union -were duly informed of their intent to make this major shift.
