Jamaica's Only Fuel Ethanol Plant and Export Port Terminal to be Sold

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Researched by Industrial Info Resources (Sugar Land, Texas)--Jamaica Broilers Group of Companies (McCooks Pen, St. Catherine, Jamaica) and subsidiary ethanol-related business JB Terminal Limited (Port Esquivel, St. Catherine) have announced a deal to sell their ethanol related businesses to ship fuel bunkering company West Indies Petroleum Limited (Kingston, Jamaica).

The fuel ethanol plant was built in 2007 and went into operation with a capacity of 54 million gallons per year. In the height of the U.S, ethanol boom, $15 million was spent to expand the plant to its current capacity of 120 million gallons per year.

Jamaica Broilers Group is yet to fully recover the $42 million the company poured into its ethanol-related operations over the last eight years. The sale is said to be for $4 million in cash and for West Indies Petroleum to assume liabilities of $18.5 million. The deal is not expected to be finalized until April of 2017.

The asset was said to be costing the company around $100,000 per month to maintain. The deal includes a 120 million gallon-per-year ethanol dehydration facility and rail siding, the 25 million-gallon capacity tank farm terminal and the 650-foot ship loading dock.

Changing market conditions, rises in input costs and low margins in 2011, plus the mitigated fulfilment of previously established tolling contracts, had challenged the processing of ethanol for the overseas market and led to the closure of the plant in August of that year.

Failure by the U.S. to renew the duty-free ethanol tariff under the Caribbean Basin Initiative in 2012 led to Jamaica Broilers exit from the ethanol market completely in May of 2015. The U.S. also took issue with Jamaica's use of child labor and sexual exploitation as well at the country's involvement as one of the largest Caribbean suppliers of marijuana to the United States. Jamaica was also a transit point for cocaine to the U.S. from Central and South American countries.

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