Santander Showcases State of the Art Sugar Mill
An article by Kareem Clarke from The Amandala
VALLEY OF PEACE, Wed. Mar. 18, 2015–What started out as a modest family-based sugarcane planting venture 48 years ago is now poised to be the Santander Group’s largest agricultural development in this region, encompassing sugar cane production, harvesting, milling and bagasse co-generation via modern milling facilities with state-of- the-art equipment – with the produce being solely for export on the CARICOM and European markets.
Santander, which is the parent company of Green Tropics – a company that came into the public spotlight first when it was slapped with a record environmental fine for dredging within the Labouring Creek Jaguar Corridor Wildlife Sanctuary in June of 2012, and subsequently when its representatives allegedly destroyed about 150 to 200 acres of vegetable crops for 30 Valley of Peace farmers in March of 2014 – is in the process of planting sugarcane on a vast expanse of land in the Cayo District as part of its endeavor to enter the market of large-scale sugar production.
Today, its executives shuttled the local media to the site to examine the extensive works that are in progress, and according to Santander’s Chief Executive Officer (CEO), Jose Rodriguez, the multimillion dollar sugar production and milling enterprise is the fulfillment of a decades-old effort to bring to fruition a childhood dream and to follow in the footsteps of Jose Rodriguez Briz, the late patriarch of the Rodriguez family, who was originally from Santander, a port city situated on the north coast of Spain.
He said, “My dad emigrated from Spain to Guatemala in 1954. He started a warehouse store, but he also loved to do farming, so he started to plant sugarcane in 1967, the year I was born. We as a family grew up in the sugarcane fields and we grew
up thinking of doing a project like this all our lives, but we didn’t know that it would be in Belize. We went to Costa Rica, Nicaragua, the United States, and we also looked at doing an operation in the only place that produces sugarcane in the south of Spain, but in the end, God brought us here [to Belize], and we found a place that we loved the day we stepped here.”
How the Operation in Belize Started
The Santander group has been carrying out its operations in the country for the past 7 years.
In 2008, they began purchasing land in the Valley of Peace area through their subsidiary, Green Tropics, and 2 years ago, in 2013, went on to initiate the construction of the mill and to plant the first fields of sugarcane.
According to Rodriguez, the principals of the multinational company intend to invest a total of almost US$150M in the project, which goes on record as its most significant investment to date and also as one of the largest injections of Foreign Direct Investment (FDI) in Belize’s modern era.
“We are investing here with a round figure of about US$147 million”, he informed adding that about 65% of the project has been completed.
“In schedule, we are a little bit behind regarding issues [concerning certified workers] that we have with the construction of the sugar mill but in the end we are sure that the project will be completed on time”, Rodriguez told us.
He said that at this time, close to US$90M has already been spent on the project and now, the new players in the local sugar business are roughly 300 days (11 months) away from their first harvest, which is scheduled to take place in February 2016.
“We planted the first fields with cane two years ago and we used those seeds to plant bigger fields, in more areas that we are going to be harvesting next year”, Rodriguez mentioned.
He also noted that their monthly expenditure has grown to around BZ$1 million mainly due to the continued acquisition of labor and material.
Unlike the farmers in the north, who use traditional means to harvest their product, Santander uses machines to plant and harvest its crop to increase efficiency.
“The preference is for efficiency/productivity. We really look at our business as being one of the most efficient businesses worldwide. Right now, the most efficient way of productivity is balancing our activities through a mechanical way. Technology is a lead for this, so as long as we keep investing in technology going forward we will always look at what is the best and most efficient way to increase our productivity of sugar”, said Edgar Hernandez, who is a partner and director of the group.
As a result, advanced forms of technology such as computer-controlled tractors are used to plough the company’s fields according to precise specifications in order to hopefully give them a competitive edge in the global sugar industry.
The project includes 20,000 acres of land that will come under production, as well as a mill for processing the sugar, and a new co-generation plant from India which are presently being assembled.
Company Structure
The Santander Group consists of three branches – Santander Farms, Santander Sugar and SS Energy.
Santander Farms is the company branch that is responsible for the agricultural processes involved in sugar production; Santander Sugar is responsible for the production and packaging of the final product (sugar and molasses) for sale and distribution and SS Energy is scheduled to supply power to the local market through the use of bagasse.
Hernandez explained the way the business is structured, after stating why they believed it was necessary to familiarize themselves with the public at this stage.
He said, “I think that everything that you don’t know about, you always have some type of hysteria about that, so the best thing to do, is to put ourselves out there for the entire Belize to know us, and as long as we can close that gap, I think that’s the best thing we can do for the purpose of communication.”
“Our structure is not that complicated; we have all our holdings separated through the different activities – farming, milling, energy, commercial, and those are Belizean
companies, so our assets investments and economic interests are in Belize”, he continued.
Hernandez also said that the company has secured the first syndicated loan in Belize with a view to expand even more.
“We are committed to keep growing, so we are just signing a syndicated loan with local, international and multilateral banks in the next 3 weeks in order to be able to financially complement and support our business activity. The debt is structured in a way that will specifically support our sugar mill project,” he said.
So how will the new company fare off against a multinational such as American Sugar Refineries (ASR) which has, for many years, enjoyed a monopoly in the established local market and up to this point, a huge market share for sugar exportation in Belize? Hernandez told us that there will be no competition where that is concerned and said that rather the two entities would be better off working together.
“We are managing our business in a way that we are exporting our production, so we’re not competing for that sugar locally. We’re not competing with them [ASR]. One of the things that we see as a challenge is to be able to produce the proper aggregated capabilities in order to maintain a sustainable growth, so I think we need to transfer together technologies and know-how for being more efficient in the production of sugar”, he cited.
Employment Opportunities
The company has been criticized for hiring foreigners from other Central American countries as opposed to Belizeans; however Santander’s human resource manager, Consuelo Rodriguez, the older sister of Jose,
said that is not the case.
“We have hired 575 Belizeans. 80% of our work force is from Belize. The people who are coming from abroad are going to go back. They’re just on a temporary basis here. We want people from here [in Belize]. Right now, we have 144 helpers that are learning because we have an apprentice program whereby Belizeans are learning along with those skilled workers that have come from abroad, such as industrial welders, mechanics, electro-mechanics, instrumentalists and machine operators,” she explained.
We spoke to two Belizeans – Harvey Sanchez, an electrical engineer and Mary Carrillo, a chemical engineer, about their experiences working for the Santander group.
“It has been a new experience. I’ve been working with people from outside of the country as well as Belizeans learning about the outside technology that we have”, said Sanchez.
“I started here back in October. I was studying chemical engineering in Guatemala City for a couple of years, then came back looking for a job. I actually saw the report announcement in the Amandala and 2 weeks later I was called and now I’m here working”, Carrillo said.
Both employees told us that they were satisfied with the work conditions and the salary, despite claims to the contrary which were made in some quarters.
“The company’s lowest wage is $35 a day, and there are people that are earning up to $80 and $100 a day depending on their specialization and skills. Regarding administration, we also have good salaries, so it’s a matter of coming and seeking for a job. We are willing for you to come here; we encourage you to come”, Consuelo said. The company has employed about 800 persons – more than half of which are Belizeans, with the remainder being skilled workers brought in from other countries.
Energy Production
Apart from producing sugar, the company also intends to produce electricity to sell to BEL through SS Energy.
According to Santander director Edgar Hernandez, the byproduct of bagasse will be used to produce energy.
“Every time that we increase grinding capacity, that’s good for energy production because the higher the grinding capacity means more sugar cane coming to the mill and more cane coming to the mill means more bagasse, which means that we will have more raw material in order to produce energy (biomass), so what we foresee is that as long as we maintain our strategy and efficiency that we expect, we will be able to put more energy from our project to the national grid,” he said.
SS Energy, a subsidiary of the group, has been green-lighted by the Public Utilities Commission to enter negotiations with Belize Electricity Limited to provide alternative energy to the national grid and provide approximately 27% of the energy demanded by the local market.