Duckenfield misses sugar target, blames inherited problems
Published:Friday | July 23, 2010 | 12:00 AM
Mark Titus, Business Reporter
Golden Grove Sugar Company poured a quarter of a million dollars into the retooling of newly acquired but faltering asset, Duckenfield, last year, but not enough to take the factory to the levels of efficiency needed to meet production targets.
Richard Jones, who runs the operation, said the estate fell 2,413 tonnes or 16 per cent shy of the 15,000-tonne target, and he was inclined to lay the blame on the state of the cane fields inherited from the Sugar Company of Jamaica (SCJ).
The fields, he said, were poorly planted by SCJ before the change of ownership, leading to disappointing cane yields.
Jones referred the Financial Gleaner to Golden Grove chairman Byron Thompson for official comment on this issue, but Thompson declined, saying the timing was wrong and that he was not ready to speak.
However, well-placed sources say the company estimated that it lost 15,000 tonnes of cane due to poor planting and that it could have got an additional 1,200 tonnes of sugar, had the cane quality been better.
time to probe
SCJ Holdings, in response to the charge, said the Duckenfield investors had the opportunity to do due diligience on the property prior to purchase and ought to have known its shortcomings.
"When they were buying it, they had the right to do due diligence, the right to inspect it and investigate," said a top official of the government entity.
"They had access to do all the checks necessary; it was a willing sell and a willing buy."
Duckenfield's 12,587 tonne output amounted to just over one-tenth of the 119,518 tonnes of sugar produced by Jamaica for the crop period to June 30.
Duckenfield was bought by partners Seprod Limited and FM Jones Estate for US$500,000, using Golden Grove as the acquisition vehicle. The deal included a commitment to invest in upgrades that cost the investors US$3 million (J$265 million) last year.
The Duckenfield property, based in St Thomas, has 10-12 hectares of land attached to the factory, and another 1,551 hectares leased from Government at US$53 per hectare per year.
Golden Grove has also acquired 1,700 acres at Bowden, but this surplus property is not expected to produce more than 700 tonnes of cane for the new crop.
Jones wants to improve the efficiency of the factory to 91 per cent of capacity, nearer to Worthy Park and Appleton's 96 per cent, and the expected trigger point for turning a profit.
Said an industry source: "Ninety-one per cent means profit for the factory; under that, you still have to pay the farmer as if output was at 91 per cent."
Duckenfields' capacity is about 18,000 to 20,000 tonnes, which means it performed at around 63-70 per cent of capacity, according to Financial Gleaner estimates.
Golden Golden has recommitted to another 15,000 tonne output target for the next crop, which kicks off annually in December, and is pouring fresh, but unspecified capital into upgrading factory equipment.
The consortium's shopping list includes washing equipment for the cane; an additional filter press machine; a new heater plug to process molasses at a consistency more suitable for the centrifuge; and a continuous low-grade basket.
The sugar company also wants to get 20 per cent more steam from the boilers, by improving the hydraulic pressure of the mills.