Email

Print

Jules Vasquez reporting
Like a smoke signal from the factory to the fields, this plume of steam means the Tower Hill factory is operational - and it's the first day of the cane season.

Jose Novelo - Chairman, Sugar Cane Production Committee
"As an industry we had no choice but to try to start as early as possible because of all the stand over plant cane that was left in the field. All the stand over ratoon - all the new cane fields that are starting to come. We have to bring this industry back to its normal cycle where we start milling either in late November or early December."

Gabriel Martinez, Chairman - Sugar Industry Control Board
"I guess we are all so happy to start today, because the idea is to start on time, so that we can finish on time."

They might be ahead of time. And that showed in the cane we saw delivered today - it was wet and dirty - and only partially burnt - far from ideal, but typical of the start of a season especially in the rain:

Jose Novelo - Chairman, Sugar Cane Production Committee
"It is a function of the wet period. Even the cane fields are soak with water, so all those contribute to having a slow start, so to speak, in terms of delivery. But we expect that this will improved."

And what is also improving is the efficiency of the offloading process. This year the cane trucks hauling in their load will have it easier. There's one additional dumping table - an additional hydraulic lift that will make deliveries faster.

For the media, getting close to it meant donning hard hats and protective eyewear. This is the man who controls the dumping tables, with these joysticks. Kind of like the ultimate video game console - but this one's for a 40 tonne piece of hydraulic equipment.

This is the old way of doing it - using a crane that picks up the cane form the trailers:

Shawn Chavarria, Financial Controller - BSI
"It has been a long request of farmers to add an additional truck dumper, because the original one which handles roughly 60% of the cane. It was seen that more trucks - it showed the old method of hooking trucks to trailers, using the cranes to unload is quite inefficient and it takes a long time to turn around. But with truck dumpers we will see an improvement in the turnaround time for cane."

This Caneyard Cabin are over a million dollars in investment.

Shawn Chavarria, Financial Controller - BSI
"We feel that there will be a lot of benefit to the industry from this investment and it was something that has been requested for some time. So look forward to the improvements we expect to see. From handling cane in a much more efficient manner."

But while there is efficiency in the caneyard, inside the mill there has been no expansion - and with more cane in the field than this mill can grind - but that's not so straightforward

Gabriel Martinez, Chairman - Sugar Industry Control Board
"As you rightly mentioned. Farmers have done their part. They have planted, they have taken advice and they had done what they were told to do to plant more cane and now we are faced with the issue of capacity. It is a big concern."

Shawn Chavarria, Financial Controller - BSI
"From our end it is yes our vision to expand the mill, but we need certain things in place. We need commitment from growers to improve on harvesting and delivery, trying to cut costs. As you know the market is changing. And with decline in prices we have to look at cost. So, we can't say we will expand if we aren't able to compete at a lower price. So that is a priority for us. Because if we expand to 1.8 and you find that farmers cannot cope with lower prices, then you have a mill that's under-utilized, because production will start to decline."

Reporter
"But has cane farmers not proven that they can actually produce more cane? BSI asked for more cane to be produced, production to increase and there is 1.7 million tons of cane out there estimated."

Shawn Chavarria, Financial Controller - BSI
"One thing is the production and as I said, the other key to that is your costs. If you have the cane but you cannot produce and deliver it at a lower cost, then at some point you will find yourself struggling."

Jules Vasquez
"No risk, no reward, isn't it a matter of confidence and trust that you all have to have confidence in your fellow industry stakeholders, namely the growers. In order to say well we will take the risks, we will expand."

Shawn Chavarria, Financial Controller - BSI
"As you say, it will be a very big risk. But we feel that that risk can be mitigated by having a plan. If we have a plan that commits all stakeholders, we feel much better as from a miller stand point to make that investment. But without a clear vision for this industry of how you will tackle the challenges, then its really a leap of faith."

A leap of faith ASR/BSI isn't ready to make right now - without a strategic development plan.

Jose Novelo - Chairman, Sugar Cane Production Committee
"We have no choice. It is a plan that all of us have to agree to. It is not a one-sided plan. Remember that what is most important here is that we are talking, we are discussing, and we are negotiating the viability of the sugar industry where the majority of the stakeholders have to agree on how we move forward."

Gabriel Martinez, Chairman - Sugar Industry Control Board
"With the low prices of sugar we don't know whether farmers will be motivated and encourage to plant more. We don't know how many will drawback. So I must say that in itself gives us some uncertainty as to how we move on from here."

So, the future is cloudy and the present is tense - and in 2016 the farmers and the factor have to figure out how to make time for all the cane in the field to get into this mill:

Jose Novelo - Chairman, Sugar Cane Production Committee
"They will deliver approximately 80% of the quota that was allocated to them. Bearing in mind that the PE is at about 1.6 - 1.9 million tons and the factory can only take 1.3. But we made some adjustments last week where we are now saying that the factory will grind 1.3 - 1.9 million tons. Based on 27 week crop and what we are saying is that if we start early enough, which we have now and towards the end, if we have good weather conditions we expect that the factory will be grinding even more, so that whatever amount of cane is left in the fields are as little as possible."

The schedule for cane deliveries is set by the Sugar Cane Production Committee in concert with the factory and the various associations. Notably, since the retirement of long time BSI CEO Joey Montalvo, ASR Vice President Celestino Ruiz is now in charge of operations in Belize.