EDITORIAL - Culture change in the Complant era

In an economy largely starved of good news, this week's formal takeover by the Chinese company, COMPLANT, of three Jamaican sugar factories - Frome, Bernard Lodge and Monymusk - is welcome.

But even more encouraging was the disclosure at the ceremony by Prime Minister Bruce Golding that COMPLANT, through its Jamaican vehicle, Pan Caribbean Sugar Company, will, over the next four years, spend $156 million to upgrade and expand the facilities, and is considering establishing a sugar refinery in Jamaica.

The capital will be in addition to the US$9-million acquisition cost of the factories and the US$20 million that Pan Caribbean Sugar's Lin Yuting said has already been spent on the facilities.

"They have done exhaustive, high-level studies," Mr Golding said. "These studies are now being reviewed and considered."

We hope that these reviews and considerations will come down on the side of establishing the refinery to exploit what Mr Golding suggested is a potentially lucrative market in CARICOM.

Heartened by investment

We are heartened by the prospects of the COMPLANT investment for several reasons, not least being the tanking of foreign direct investment (FDI) in Jamaica.

For instance, in 2008, such private-sector capital inflow for investment in Jamaica reached US$1.48 billion, but was half that the following year. In 2010, it slid further to US$201 million.

The decline in the rapid build-out of hotels by the Spanish, and the collapse of the bauxite/alumina sector, meant that not much new capital came in to support these sectors. And in a difficult global environment where the fight for FDI was more intense, Jamaica appeared not to have the creative muscle to get the better of competitors.

Significantly, much of the fallout has been in Jamaica's rural economies, the homes of the alumina refineries and of many of the construction workers during the hotel-building boom.

Sugar production is primarily a rural operation that directly employs thousands of people on farms and in factories. The COMPLANT acquisitions, as well as those of the other investors who acquired divested government sugar facilities, are, therefore, important to the country's rural economy.

Drive for efficiency

But it is important to note that sugar can no longer be viewed - as was too long the perspective of Jamaican governments - as social welfare. Or, as Mr Golding put it, we would be deluding ourselves to believe that sugar can be produced as in the past and expect the industry to be anything but marginal.

So, we expect COMPLANT to run a modern enterprise in the drive for efficiency. This will demand a culture change among many in the Jamaican industry.

COMPLANT, nonetheless, will have to remember that there are many farmers who grow sugar cane to supplement what will be produced on its own farms, and that it will derive the best results if it views them as business partners. Be tough, but be fair.

The opinions on this page, except for the above, do not necessarily reflect the views of The Gleaner. To respond to a Gleaner editorial, email us: editor@gleanerjm.com or fax: 922-6223. Responses should be no longer than 400 words. Not all responses will be published.