When you hear the names BSI/ASR and the BSCFA the first thing that comes to mind is the revenue negations for bagasse which is currently at a stalemate. On one side of the negotiating table you have the Belize Sugar Cane Farmers Association requesting a $10.00 payment per ton of bagasse. On the other side of the table you have BSI/ASR offering 51 cents per ton of bagasse.
The BSCFA has indicated time and time again that they will not accept that offer, hence why the negotiations are at a standstill since BSI/ASR is sticking to its guns also.
The last time both stakeholders met around the negotiating table was on June 6th but nothing came out of that meeting. And while we heard from the BSCFA, not much was said by BSI/ASR.
But today the company said a mouthful in a press release issued to the media. According to the company, so far, the BSCFA leadership has not presented a clearly articulated and reasoned proposal which supports its position and seems intent on arriving at a payment quantum by simply bargaining the price.
In the release BSI/ASR outlines the basis on which its proposal of 51 cents has been made. One: Bagasse is a residue of the sugar production process after sucrose has been extracted in the milling plant. Two: In 2009, BSI invested $130 million in the Belgogen cogeneration plant to convert the fiber into heat and steam for the sugar production process. According to BSI/ASR a large portion of the fiber is used by the sugar production leaving around 29% of the fiber for production of electricity for sale to BEL. And three: BSI has valued the percentage of fiber that is used to generate electricity for sale to BEL using a methodology that is both transparent and verifiable. Based on this methodology, BSI proposes pay a quantum which amounts to around $550,000.
If we take a look at the numbers, if BSI would pay cane farmers the $10.00 per ton of cane delivered for bagasse, based on the 2013 crop results, they requested payment would amount to BZ$11.4 million, or 97% of Belcogen’s gross revenues from sales to BEL. Based on the release we understand that BSCFA has also proposed a payment ranging from $3.00 to $6.50 per ton cane.
But again, BSI/ASR says this was done with no supporting methodology.
At the end of the release the company states that it is time to turn the page on bagasse, reach an equitable solution and work together to meet the challenges of improving industry efficiency, productivity and competitiveness which will lead to its long-term success. It’s left to be seen how the BSCFA will respond to the company’s latest release.
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