Feb 2007 Financial News

Angostura bids for Jamaica distillery

Feb 08, 2007

Angostura Ltd is one of five companies shortlisted by the Jamaica government to bid for six sugar estates which the Government plans to divest as it seeks to exit an industry that has continually drained millions of dollars of public funds.

Angostura’s group company secretary Michael Carballo, said yesterday the company is particularly interested in Hampden Estate in Trelawny.

“We have put in an expression of interest. Hamden Estate is of particular interest to us because it is a distillery and Hampden is a producer of high quality potstill rums that fetch high prices in Europe,” Carballo said.

Carballo said Angostura already owns A&E Scheer BV in Holland, a supplier of bulk rum which the company purchased in 2004/5.

“It is a major maker of high quality bulk rums in Europe,” Carballo said of Scheer, “and one of its primary sources of high quality premium rums comes from Hampden. A significant amount of inputs come from Hampden.”

He said Angostura’s interest in Hampden is to “enhance our synergies between markets on one end and production on the other end.”

Carballo said a due diligence on Hampden is yet to be done, so the company does not yet have any idea as to its worth.

He said while Angostura is interested in the production of molasses through the Hampden distillery, he doesn’t think that it will produce enough to import to Trinidad. Angostura has expressed concern about its continued supply of molasses following the announcement by the T&T Government that it plans to shut down the local sugar industry following the end of the 2007 sugarcane crop.

A French company, Compagnie Industrielle de la Matiere Vegetale, has expressed interest in acquiring the assets of the Sugar Manufacturing Company Ltd (SMCL), but Carballo said Angostura was not interested in SMCL.

“We did not submit any bid. We did submit a bid for Rum Distillers of T&T. We have had no formal response yet from the Divestment Secretariat,” Carballo said.

According to Jamaica’s Agriculture and Lands minister Roger Clarke, Angostura is in the race with Dhampur Sugar Mills of India; Coimex, a Brazilian company; and Jamaica’s Gibson Energy Ltd, which has established a joint venture with a Canadian enterprise that Clarke and sugar industry officials have declined to identify.

“We have looked at their capabilities and we have sifted out these five as the best in terms of their financial resources, their experience in the industry and their capability of bringing on board the kind of technologies that would be needed,” Clarke said.

He said the Government was now in the process of setting up a negotiating team after which the five companies will be invited to submit bids.

Clarke said last August that the Government had decided to “fast-track” the divestment of the six sugar estates after eight business entities had indicated “serious interest” in them .

“We want to do it as fast as we can,” Clarke said. “So we are hoping that the bids will be in by the end of March and after that, we will have negotiations. So by the end of July, we will have a clear picture as to where we are at.”

The Jamaican Government’s desire to divest the sugar estates has apparently sharpened in the wake of heavy public criticism over the poor performance of the state-run sugar companies. The State-owned Sugar Company of Jamaica (SCJ) lost $200 million in revenue after a dismal 2005/06 sugar crop in which overall production plunged 30,000 tonnes below forecast output.


Source:
The Trinidad Guardian
Thursday 8th February, 2007

http://www.guardian.co.tt/business1.html