File
Minister of Agriculture Christopher Tufton.

John Myers Jr, Senior Reporter

Brazil's Infinity Bio-Energy Limited will pay Jamaica US$50 per hectare, or US$1.55 million per year, for cane lands that it will lease alongside the five sugar factories it has bought from the debt-ridden Sugar Company of Jamaica (SCJ).

The 31,000 hectares, said Agriculture Minister Dr Christo-pher Tufton, will be available for at least 25 years to Newco - the vehicle being used by Infinity to manage its operations in Jamaica.

The price for the cane lands appears to triple what was initially proposed.

Triple the sum

Infinity BioEnergy had earmarked US$5 million for the leasing of cane lands over a decade, but the price that Tufton said was agreed will see the Brazilian company paying over US$15.5 million instead, more than triple the sum identified in the heads of agreement, over the same period.

The full price over the 25 years would amount to US$38.75 million.

Infinity in June struck a US$25 million deal with Jamaica to acquire state-owned sugar assets, but under terms that seem to require no cash payment.

Instead, Jamaica will take a 25 per cent minority position in Newco.

Sweeten the deal

To sweeten the deal and seal the transaction, Jamaica threw in its energy asset Petrojam Ethanol Limited (PEL).

The sale price covers US$15 million for PEL, US$5 million for the lease of cane lands and the remaining US$5 million for ownership of the five factory buildings and equipment, as well as up to 100 acres of lands immediately surrounding the factories.

Jamaica will absorb the SCJ's debts of about J$20 billion, and foot the J$2 billion bill for redundacy payments to thousands of sugar workers.

Government still has not disclosed the SCJ's total land holdings, but Donovan Stanberry, permanent secretary in the Ministry of Agriculture, said the lands being leased to Infinity represented the greater portion controlled by the five sugar factories - Bernard Lodge in St Catherine, Monymusk in Clarendon, Duckenfield in St Thomas, Frome in Westmoreland, and Long Pond in Trelawny.

He said a small portion would be allocated to displaced workers either to farm sugar cane, or alternative crops, and for the development of social housing and infrastructure in the cane-growing communities.

Infinity will be using the 31,000 hectares to grow just about 50 per cent of the 2.5 million tonnes of sugar cane it needs for its business lines - sugar, molasses, ethanol - and electricity by 2013.

Of the canes produced by Newco in five years, 135,358 tonnes will be used as feedstock for ethanol production; 62,000 tonnes for sugar, down from the current 125,693 tonnes; and 26,989 tonnes for molasses, down from 63,800 tonnes.

The Brazilian company will be depending on private farmers to supply the remaining 50 per cent of canes as raw material.

john.myers@gleanerjm.com