JWN divests sugar lands, assets to farm managers
Following its exit from sugar production in the wake of substantial losses, J. Wray...
Following its exit from sugar production in the wake of substantial losses, J. Wray & Nephew Limited, JWN, has transferred control and management of its sugar cane lands and related assets to CIG Agricultural Holdings Limited, a company led by three farm managers previously employed to the rum maker.
The lease agreement includes farm lands, select housing and office buildings. It’s also said to include a medium-term lease of cane cultivation equipment and farm vehicles.
Formed last year by former JWN Agriculture Division CEO Ian Maxwell and ex-farm managers Carlton Spencer and Gary Simpson, CIG Agricultural Holdings took control and management of sugar cane cultivation at Appleton Estate in St Elizabeth and New Yarmouth in Clarendon in November 2020.
The specific terms of the lease were not disclosed but CIG is expected to make payments utilising the proceeds from sale of sugar cane and other crops to be grown on the land.
JWN this week confirmed the transaction and in a written response to the Financial Gleaner, Managing Director Jean-Philippe Beyer said the divestment is consistent with the decision of the company to exit the farming side of the business and to focus on the continued growth and expansion of the JWN world-class rum brands, including the premium line of Appleton Estate Jamaica, Wray & Nephew White Overproof and Kingston 62 rums.
“The expectation is that with time, they will diversify from sugar cane only and create a mix of more viable agricultural crops with better economic returns,” Beyer said of the agreement with CIG.
“Through this divestment, J. Wray & Nephew Limited is demonstrating our continued commitment to Jamaica’s agricultural sector, and to the encouragement of entrepreneurship, employment creation, economic growth and national development,” he said.
JWN shuttered its sugar factory at Siloah in St Elizabeth last year and two years earlier had stopped growing sugar cane at its Holland and Marantha estates in the parish. The moves came after the company was said to have lost approximately US$12 million, or nearly $1.8 billion, annually over some 12 years.
Managing director of CIG Agricultural Holdings, Ian Maxwell, in an interview, said the reaping and selling of sugar cane has started. Cane is now being sold to Frome sugar factory in Westmoreland from the sugar St Elizabeth lands with canes from New Yarmouth being sold to Worthy Park sugar factory in St Catherine. CIG expects, he said, to reap about 90,000 tonnes of cane for the current crop year.
As a condition of the deal, CIG will continue some sugar cane cultivation but will quickly move to other types of farming activities to ensure maximum economic returns and the long-term viability of the venture.
Maxwell declined to disclose the amount of money CIG was investing in the venture or the source of the financing. He said that some of the financing arrangements are governed by confidentiality clauses that precluded him for making the disclosure.
He said several options are under consideration for the best use of the lands, including cash crops, livestock rearing and the subletting of portions of the 3,200 hectares (approximately 8,000 acres). Only about 20 per cent of the land is expected to remain under sugar cane cultivation.
“Part of our operational plan will be the sale of sugar cane juice to the distilleries of J. Wray & Nephew and to continue cultivation of sugar cane on lands close to the Joy Spence Appleton Experience in St Elizabeth,” Maxwell said.
The sale of cane juice to the JWN distilleries, he noted, would not start for another year while a mill for the crushing of the cane is installed to extract the juice to supply JWN’s rum-making activity.
He noted that the CIG team is committed to the new business and prudent management of the sugar cane farm assets.
“The principals of CIG welcome this opportunity to own the business and to pursue various commercial farming activities in an environmentally sound way as part of our contribution to Jamaica’s economic growth and the engagement of some full-time and seasonal workers, who will be able to continue making a living from the farming operations,” Maxwell added.
CIG has 30 full-time employees and expects to hire up to 150 seasonal workers.