And from sugar roads to sugar cane...
Tonight, the full pause on the sugar industry in the north continues. That's because the Sugar Industry Control Board has not followed through on the legally required steps to publish the start and end date of the grinding season in the Government Gazette.
If the SICB had completed those steps, today would have been Day 2 of the new season, and by its end, the mill would have received approximately 7 thousand tonnes of cane. The leadership of the Progressive Sugar Cane Producers Association told us yesterday that they and their membership are being penalized and forced to lose earnings, simply because their sister association, the Belize Sugar Cane Farmers, cannot reach an agreement with the millers.
Progressive is one of the 3 smaller associations that have entered signed contracts with BSI/ASR. They are ready to deliver, but because of the impasse they cannot start delivering their cane to the factory.
This evening, we spoke via telephone with Vladimir Puck, the chairman of the Corozal Sugar Cane Producers Association. He told us that if the SICB does not remove its blockade of the industry, he expects that very soon, that farmers will start to get calls of concern from their creditors. They have loans which they must start to pay back with earnings from their cane deliveries.
We turn now to the commercial dispute between the BSCFA and ASR/BSI, which forms part of the industry shutdown. Tonight, we explore their complaints that the factory has failed to meet their minimum standards of efficiency. They insist that due to this lack of efficiency and improvement in milling rates, their members are losing their investment in improving the quality of their sugar cane.
Here's how CEO Oscar Alonzo explained it:
Oscar Alonzo - CEO, BSCFA
"The other issue had to do with the 7,000 tons of cane that we wanted them to grind in a 24 hour period."
"When ASR came to Belize, they had indicated by the year 2017, they would have been milling 335 tonnes of cane per hour. In the last crop, we could count the number of days when they actually milled 300 tonnes of cane. So, year in, year out, they have been saying that they have the capacity to mill it, but they've never been able to do it. And our farmers have suffered because of that. During the dry, they do all their efforts to improve the quality of the cane that they deliver to the factory, only to have that quality substantially eroded when the crop is extended during the months of June when the rains are occurring. And there, that then takes away the benefits that they receive from the quality that they have and affects the price that is paid to them. And bearing in mind that, we need to see how we can obtain a better price during a shorter crop, this is why we proposed to negotiate that element within our agreement."
Over the last few days, we've been pressing BSI/ASR to provide a response to these complaints, and they recently provided us with a detailed analysis of the mill's performance.
And according to BSI/ASR, they have strengthened the mill's performance in all the benchmarks that they can measure. As seen here, in this image, ASR's investment allowed the mill to increase the amount of cane milled by 26%. In the Pre-ASR years, the mill would arrive at around a million tonnes of cane annually, but since 2014, the total cane milled has increased to 1.26 million.
The average daily milling rate was 4,803 tonnes of cane, but after ASR arrived, that rate has increased by 37% to a little over 6,500 tonnes.
But there are also circumstances that force that number to be lower. Those include lost time due to issues like the none-delivery of cane, and issues at the mill that force them to stop for maintenance and repairs. One of the problems is the volume of mud that farmers deliver with their cane.
They point out that for the 2019 and 2020 crop years, farmers were delivering cane with high volumes of mud.
The company says that they have invested 190 million dollars to modernize the factory and improve efficiency.
So, from the perspective of ASR/BSI, they have invested heavily in improving their operations, and yesterday "Mac" McLachlan discussed that with the press:
Reporter
"How much of a priority is it for the mill to actually invest in expanding its capacity?"
Malcolm "Mac" McLachlan - VP, International Relations, ASR/BSI
"Well, Paul, allow me - surely, you appreciate at a time like this, the thought of investing more money in Belize is the furthest thing from our minds. We would not consider further investments until we have a much better relationship with the association, and we're not beholden to the kind of interventions that we're seeing at the moment. We need to be in a position that is a constructive position, and one where investors can feel confident about their future in the country. That would be the same for any business, not just ours. But, to your point - and I'm afraid that the people who mention these things have very short memories because for the 5 years before ASR's arrival, BSI milled, on average, about a million tonnes of sugar cane. For the 5 years after our arrival, the average is 1.266 million tonnes. So, that is a major improvement on the throughput of cane. We continue to - and have continued to invest in improving the mill. We've our extraction rates, and the farmers get paid on sugar extracted from the cane - are higher than they've ever been in the past."
