Possible sale of B.S.I. to Banco Atlantida; Barrow and Briceño debate
John Briceño
A deal is being worked out with Banco Atlantida of Honduras to acquire controlling shares in Belize Sugar Industries at Tower Hill. The sale of the factory is under consideration because of its current financial woes. As it is B.S.I. is currently in the hole for some forty million dollars that it owes to both the ING Group and FirstCaribbean Bank, additional to a ten million dollar loan from government in 2010 to bailout the company and keep it operational. Prime Minister Dean Barrow was set to meet with bank officials this afternoon following the House Meeting; the details are not yet known. The Honduran bank’s interest in B.S.I., observers say, is because it wants to get hold of the Belize sugar quota to the European Union since Honduras does not have access to that market. During this morning’s sitting, Opposition Leader, John Briceño, questioned the move by the government to entertain discussions about a possible sale of majority shares in B.S.I., a move that contradicts government’s recent spirit of nationalization. Barrow admitted that while B.S.I. is majority owned by its employees trust, he had not met with the B.S.I. workers.
John Briceño, Leader of the Opposition
“For the past few weeks the Prime Minister has been going on hysterically about nationalization. In the past week my honorable colleague has been covering up himself with the Belizean flag and has been dancing up and down across this country. Dancing and singing the B.T.L. and B.E.L. song. So now Mr. Speaker, imagine our surprise when the Prime Minister appears on the media and sings a completely different tune. He’s now singing the Honduras national anthem and is wearing an Honduras flag as he tries to convince the Belizeans that there is no choice but to hand over the sugar industry to a foreign company.”
Dean Barrow
Dean Barrow
“Doesn’t the sugar industry; isn’t it comprised of various constituent elements including the factory but most importantly the farmers, the sugarcane farmers and the sugarcane farmers, you contradict your own self, the sugarcane farmers certainly can’t sell the factory because they don’t own the factory. The sugarcane farmers, I suppose it’s really a symbiosis, you can’t have one without the other but the sugarcane farmers as far as the Government of Belize is concerned are the persons that are of surpassing importance. When Banco Atlantida offered to not just make this majority purchase of the shares in the B.S.I. sugar factory I thought that because they would not make the investment unless certain things were clarified, I should have a meeting with the farmers—the farmers with whom this government has established a wonderful relationship; the farmers that this government intervened to save last year to the tune of ten million dollars.”
John Briceño
“Should Banco Atlantida take over will the workers be paid their dividends owed to them? Will the owners of B.S.I., the workers, get any monies from the sale of the company Mr. Speaker? There are lot more questions to ask, questions that need to be answered before any decision is made by the Prime Minister and the management of B.S.I. before they decide to sell out the B.S.I. workers.”
Dean Barrow
“B.S.I. belongs to, as you say, in the majority the employees trust, the workers of B.S.I. You know, do you even know what the shareholding apportionment is? You know how much they own and do you know how much Tate & Lyle own and do you know the fact that government does have a nine percent share. Did you know any of these things?”
As we said, the prime minister met with the bank and up until news time, that meeting was still ongoing. We’ll have the outcome as soon as it becomes available.
I felt that no good would come of it when BSI first announced its intention to get into the generation business. Planting cane and processing sugar is BSI’s core business and they have years of expertise in that area. Generating electricity is not their strenght but new expertise can be developed. My advise to the powers that be at that time was to begin small using cheap used equipment and after a number of years learning how to processes electricity fron bagasse a larger investment in new equipment would be prudent. A team from BSI visited a sugar plant in Guatemala that followed this model and were making mints of money seeling electricity with used equipment and low capital inventment. The response I heard from BSI at the time was that they rejected the low risk, used equipment model and would borrow and build the most modern bagasse fired plant with all new equipment. BSI violated a basic principle of business, start small and keep your risk low until the managers and staff have learnt and mastered the new business venture. the hole that BSI dug itself into is very unfortunate for Belize but history has shown that the end result was inevitable. The past cannot be undone but when are we as a people and country going to start learning from history and from the experience of others.
Fresh Catch owes it to Belizeans to explain why the company was failing or fundamental problems being experienced before Belizeans should invest more of our social security money into what might very well be a bottomless pit of losses. We need to know whether they had a production capacity problem or whether its a marketting problem or a pricing problem. Borrowing millions from Social Security has effectively made Fresh Catch a publicly traded company and as such they need to publish transparent financial records and investors (all employees and employers from whom Social Security gets its funds) must have access to financial reports and to the financial Officers of the company.
There are roughly 5,000 cane farmers in the North. If each borrowed $10K (from private banks not GOB) that would give you roughly $50 million to buy BSI. Most of them own quite a bit of land and their trucks outright. First fire Montalvo for mismanaging the place, e.g. needing to fixing things twice every time, which delayed the start of the seaon. Cheaping out first with Chinese workers and then getting some qualified folks to do it right. Assembling and dismantling the core sampler. Sampling the quality of the cane once it arrives at the factory instead of sending an inspector to the fields. High salaries, free housing, vehicles, fuel, and other perks for management is probably what all the debt went to cover. Buy Goverment’s portion also so they don’t have one say about this. The cane industry doesn’t only supports the farmers and their families but the merchants whom they buy from (food, parts, gas, etc), the bankers they do business with see them through the cane season, those working on the barges in Belize City, the workers at the factory and their families. Oh and these folks spend a whole lot on Belikin also, trust me.
You stupid cane farmers wa have to answer to hondurans now when barrow sell it to them barrow no me say that all a unu stupid barrow say it dice que todos ustedes son estupidos y no le importa que les pasa que viva la revolucion.
As always this Prime Minister and his “beautiful words”… Feeding us the “poor” with his words… Que Viva El Rey…
Note: ING Bonds, in the billions of Euros were sold in south America out of Russia that ING Bank will not settle on, yet they are expecting the cane farmers of Belize to honuor their debt with their bank.
Should Banco Atlantida be allowed majority shareholder status (they want 51 percent mjority shareholding, anything less that that would not allow them to implement their scheme for total control), cane farmers should realize that the entire business model of the cane sugar industry as we know it will be forever changed at the detriment of the cane farmers. While cane farmers now enjoy a “fair price” for their sugar cane (current laws protect Cane Farmers from outsiders competing with them), once the Hondurans take over, this price structure would no longer be maintained (Banco Atlantida would immediately expand the sugar cane supply by planting themselves). Sugar cane prices paid to cane farmers would be lowered to levels paid to private cane farmers in Honduras (not very attractive when compared to prices paid to Belizean Cane Farmers). As Banco Atlantida would now be planting most of its own sugar cane (they require that the laws be changed so that they can plant sugar cane), the bargaining power of Belizean Cane Farmers would be diminished and they would need to take whatever price is given to them.
This is a serious threat to Cane Farmers and their livelihood is at stake. They should check out the price structure in Honduras as this is exactly where they will be in the event this take over by Banco Atlantida occurs.
Should Banco Atlantida be allowed majority shareholder status (they want 51 percent mjority shareholding, anything less that that would not allow them to implement their scheme for total control), cane farmers should realize that the entire business model of the cane sugar industry as we know it will be forever changed at the detriment of the cane farmers. While cane farmers now enjoy a “fair price” for their sugar cane (current laws protect Cane Farmers from outsiders competing with them), once the Hondurans take over, this price structure would no longer be maintained (Banco Atlantida would immediately expand the sugar cane supply by planting themselves). Sugar cane prices paid to cane farmers would be lowered to levels paid to private cane farmers in Honduras (not very attractive when compared to prices paid to Belizean Cane Farmers). As Banco Atlantida would now be planting most of its own sugar cane (they require that the laws be changed so that they can plant sugar cane), the bargaining power of Belizean Cane Farmers would be diminished and they would need to take whatever price is given to them.
This is a serious threat to Cane Farmers and their livelihood is at stake. They should check out the price structure in Honduras as this is exactly where they will be in the event this take over by Banco Atlantida occurs.