Business

Jamaica Ethanol shuts down plant, cuts 31 jobs

BY JULIAN RICHARDSON Assistant Business Co-ordinator richardsonj@jamaicaobserver.com

Wednesday, August 03, 2011



The Jamaica Ethanol Processing plant in Rockfort, Kingston

JAMAICA Ethanol Processing has shut down its ethanol plant and terminated 31 jobs after 26 years in the business.

The move was completed last week after three consecutive years of rising input costs helped to sever margins and drive the company out of an ethanol market in which it started operating long before the other two operators in Jamaica — Jamaica Broilers Group (JBG) and Petrojam.


"The CBI (Caribbean Basin Initiative) ethanol business has been in distress for the last three years, initiated by the volatality of the commodities market and essentially an upside down trading set-up where the primary input — hydrous ethanol feedstock — cost is higher than the product that we sell," Jamaica Ethanol Processing managing director Erwin Jones informed the Business Observer yesterday.

Jamaica Ethanol had a production capacity of 50 million gallons per annum.

Jamaica Ethanol imported hydrous ethanol from Brazil and processed it into anhydrous ethanol. But prices of the raw material have surged to record levels due to numerous supply issues, including competition from the automobiles sector which uses hydrous ethanol in its flex-fuel vehicles; high sugar prices which have diverted lots of sugar cane processing to raw sugar; and bad weather.

"Prices have gone up substantially in Brazil," noted Jones. "So what the (Brazilian) Government has done in the case of shortages there due to high demand, is to adjust back the blend ratio (ethanol-gasoline)."

What's more is that due to the US financial constraints, Jones said the industry is bracing for a fallout in the CBI, which allows CBI members — including Jamaica — to supply up to seven per cent of US ethanol on a duty-free basis.

"The trading arrangement with the US seems to have run into a problem in the face of the budget deficit issues in the US," said Jones, adding "I think we are about to see the end of the blenders' credit funds, which helps to provide a price support for ethanol, and the import tariff.

"It's a double whammy — we are losing our political support for the trading arrangement and the commodity market conspired to undermine our margin opportunity," he argued.

Jones said that his company will continue to supply sugar but that segment of the business, he said, does not employ a significant amount of persons.

"We supply a significant part of refined sugar to industrial users, so we will have some continuing operations, but the ethanol business is done for all intense and purposes," Jones regrettably told the Business Observer about the ethanol business he started in 1985.

Jamaica Broilers began its ethanol operations, JB Ethanol, in 2006 to take advantage of a price differential on Brazilian ethanol exported directly to the US and product passing through a Caribbean processing facility which benefits from the tax exemptions under the CBI. Its ethanol operations was highly profitable up to last financial year, when the price of ethanol in the US (which fluctuated between US$2.50-US$2.80 a gallon, or higher than the long-run price projected by JBG of US$2.20) was not high enough to offset production costs, primarily due to the high price of the raw material. Ironically, Jamaica Broilers executives are bullish about its ethanol business because of energy regulations in the US which they say may put a cap on conventional biofuels, such as corn-based ethanol, and leave the market open for sugar-cane ethanol, which qualifies as an advanced biofuel.

Petrojam Ethanol which began operating in 2005 was up to June searching for a new supplier of hydrous ethanol, having shut down its plant temporarily.

Read more: http://www.jamaicaobserver.com/business/Jamaica-Ethanol-shuts-down-plant--cuts-31-jobs_6748609#ixzz1TyWtxmcB

i see where you posted this , i guess as some perverted celebration of our disagreement. well, at least they did it, and it went south because of the economics involved. they did not just talk about it, make photo ops, and press releases. at least your government can benefit from something i cautioned against recently, when i heard that Infinity Bio Energy was getting involved, and i am aware of their spotty track record. if you had half a brain, and understood anything more complex than the Macy´s catalogue, you would take this as a subject lesson into your adored free trade model. sadly, you are too stupid to see what you are looking at. the Brazilians , in essence, took one of the producers down with the reneging on feedstock deliveries.

i am not going to get into the trap that you are setting, by responding to this by publishing derogatory news articles regarding the DR. i am an adult, from a decent family. you area ghetto chopo, from very low bearing, and it is plain for all to see.

Atabey, the half assed copy and paste artist, tried to give me a lecture about the benefits of free trade, some days back. here is a guy who knows less than nothing about the moving parts of international trade, but, being a presumptious sort, he thinks he does. now, he vindictively and triumphantly posts this piece, to celebrate the failure of the ethanol venture in Jamaica. if he had any sense at all, he would have looked at the REASONS for the failure, and attached them to the pitfalls of asymmetrical free trade, something i have spoken against a million times here. because of the apparent COMPARATIVE advantage that Brazil has in production of anhydrous ethanol, Jamaica sourced the feedstock from Brazil. well, when the prices of the factor inputs are dependent upon the whims of the supplier, this is what happens. they rise the price, and you get hammered. also, when you have a trade agreement with a major market, and the tariffs and protections in that market are subject to the whims of political groups, you can lose a significant portion of that market. both these dynamics took place in the case of the ethanol experiment in Jamaica. Atabey would like to believe that it was incompetence and mismanagement on the part of Jamaica, but that is only because he is a moron , who does not understand the things he seeks to pontificate upon. if he really did have legitimate academic qualifications, and not a store bought degree, this would not be so abstruse to him.

News
VIDEO: Suspects held in Lauriston beheadings


Kimmo Matthews and Rumeal Peters

Wednesday, August 03, 2011



THREE men believed to be involved in the gruesome beheadings of a mother and daughter in St Catherine more than a week ago are now in the custody of the police.

Assistant Commissioner of Police Ealan Powell made the announcement at a press conference yesterday, and said that the police had launched an islandwide hunt for more suspects.



"There are six other persons who we are presently pursuing in connection to the case," Powell told journalists at the press conference which was held at the Police Commissioner's Office in Kingston to update the media on the progress of several major investigations across the island.

The headless bodies of 40-year-old pastor, Charmaine Rattray, and her daughter Joyette Lynch, 19, were found in their Lauriston home in Spanish Town, St Catherine, on July 20. Both women appeared to have been chopped to death.

The discovery came just two days after the killing of their 18-year-old neighbour Scott Thomas, who, too, was beheaded.

Rattray's head was found days later in the Rio Cobre, while Lynch's head was found in the community on Saturday.

Yesterday, Powell told the Observer that investigators had good reasons to believe that the perpetrators of the macabre murders used either a large knife or a small machete to sever the heads of the two women

In the meantime, Powell also disclosed that two men have been held in connection with the murder of nine-year-old Shadaday Harrison and the shooting and injury of her relative in Lime Tree Grove, St Catherine two weeks ago..

Shadaday, also called 'Poochie', was killed after gunmen kicked in the door to her home and fired shots inside.

In the case of six-year-old Teona Henry, who was killed and her body dumped in Mountain View in East Kingston, Powell said investigators were still following several leads as they continue to gather scientific evidence to solve the murder.


Read more: http://www.jamaicaobserver.com/news/VIDEO--Suspects-held-in-Lauriston-beheadings_9364958#ixzz1U0Nsccmd

Atabey, the guy with the imaginary college degree in business, offers this sage bit of advice

I do wonder if by having one main supplier the firm didn't put itself into a very tight spot? Multiple suppliers and long term supply deals do come to mind

the business model was based on the most cost effective, abundant, and secure source o the raw material, Brazil. since you are such a business whiz kid, BBA and all, why don´t you tell us where else you would have sourced anhydrous ethanol for a plant in this part of the world. no need to burden us with long winded six page copy and paste articles. just the name of the country will suffice. i guess i will not expect a reply, as is your customary modus operandi.

as usual, you elect not to answer the question, but run the discussion off the track with non sequiturs and obfuscation. let me repeat it

kindly tell me of any other source of anhydrous ethanol, besides Brazil, in this region. if you do, please try to make it one which is as cost effective, and as reliable, as Brazil. i am willing to bet dollars to donuts that you have never done a feasibility study. better yet, you have never seen one. there are business models that rely on single suppliers, in case you did not know. the PEST, SWOT, and PORTERS analysis in the pre feasibility analysis sometimes have to rely on data that pertain to that supplier only. any deviations will make the numbers unworkable. why am i wasting my time trying to educate you, anyway?

Atabey, the guy who i have been informed suffers from moral nihilism, offers this remark

You'll see why your jumping to harshly accuse Dominicans demonstrates a rather disinclination TO SEE THAT YOUR OWN HOMELAND HAS PRODUCE RECENTLY MULTIPLE HORRIFIC CRIMES AGAINST THREE WOMEN Three women have recently been Beheaded in Jamaica

at no time did i use the term Dominican to assess this action. one poster attributed the action to GREED. i disagreed, and opined that it was a depraved act. incidentally, there are other posters who agreed with my finding, but you curiously did not take them to task. not that it matters, because, as i told you before, i prefer when you disagree with me. i wpould hate for people to associate me with you as far as thinking is concerned. or anything else, for that matter.