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SANTANDER GROUP PROMISES GROWTH WITH NEW SUGAR MILL IN WESTERN BELIZE

by Dorian Nunez of Ambergris Today

While Belize Sugar Industries reports that cane farmers in Belize need to produce more cane per acre to be able to cope with the projected falling earnings of 2017, Belize’s newest Sugar production mill is set to crank up operations in February of 2016. Santander Group projects that the company’s production will grow the country’s agricultural GDP by a minimum of 4%.

Santander began working on their investment to construct and operate a new sugar mill in Belize back in 2008. The investment group has brought with them over 50 years of experience in the sugar industry that includes sustainable and efficient methods. Today the construction of the mill, located on a 20,000 acre property in the Cayo District, is well underway with less than a year away from their first milling season. 

The Guatemalan-based company chose Belize for this project after looking through a list of possible sites in Nicaragua, Guatemala, Costa Rica and even Brazil. Why Belize? Legal certainty, security and fertile land were just a few of the reasons that made Belize perfectly suitable for their investment, stated Santander. Belize’s important trade agreements with European markets (because of its Commonwealth status) and wit the CARICOM countries. 

The state-of-the art operations brings new technology to the sugar cane farming and milling industry that is poised to increase the yield of production, create new jobs for Belizeans and teach them new skills. The operation in Belize is said to be Santander Group’s largest agricultural development in this region, with a foreign direct investment of USD$150 Million.

The Santander Group points out that this very large investment will undoubtedly create jobs and opportunities for Belizeans, to not only work but to be trained as part of their apprenticeship program, where the local labor force can learn specific trades from international experts. Already the company hires 575 Belizeans which represents about 80% of their workforce. Other benefits to Belize include:

* The foreign direct investment of the company injects funds into Belize’s economy and promotes growth in multiple areas.
* The increase in export will solidify Belize’s current balance of payment which directly supports the stability of the value of the Belizean dollar.
* The syndicated loan that Santander has made puts Belize in the ledgers of Banks around the world and not only allows them to take notice of the country, but also establishes a level of comfort in continuing to support investments within the country. (Santander indicates that the group has managed to secure the first-ever and biggest syndicated loan for an investment in Belize. This opens doors for Belize to be able to gain this sort of financial backing for future investments.)
* The company indicates that it brings with them a high level of social responsibility and willingness to give back to the country. Their goal is to contribute in areas of education, infrastructure and culture in the communities directly surrounding the property.

You see all these benefits to the country come because the Santander Group is a fairly large company that consists of three branches that includes Santander Farms, Santander Sugar and SS Energy. Santander Farms is the company branch responsible for the agricultural processes involved in the sugar production – the planting and harvesting of the sugar cane along with all the additional steps involved in the process. Santander Sugar is responsible for the production and packaging of the final products for sale and distribution of sugar and molasses. This branch covers the industrial aspect of milling, production and distribution. SS Energy, which was recently selected by the Public Utilities Commission as one of the companies that will supply power to the local market, utilizes the bagasse, which is a by-product of sugar, to produce clean energy that can provide approximately 27% of the energy demanded by the local market.

According to BSI’s data, Belize’s sugarcane yield per acre ranks among the lowest in the world, a reality which can cost the country millions of dollars in lost revenue once the European Union discontinues giving preferential prices for sugar in 2017. The data shows that Belize only produces 17 tons of cane per acre, while Mexico produces closer to 30 tons. Guatemala, which has the largest production in the region, produces some 41 tons per acre.

After touring the property of Santander Group and learning all the positive aspects the new sugar company will have on the Belizean economy, the job market and the impact on social aspects of communities directly and indirectly impacted by the company, we can only look towards a positive impact on the sugar industry of Belize and benefits to its people.

SAN PEDRO BLOGGER TOURS OUR FACILITIES

Santander Sugar: The Largest Private Foreign Investment in Belize To Date & One Super Interesting Tour

By Rebecca Coutant of The San Pedro Scoop 

Earlier this week, I received an invitation. And then just a few days later I was dressed like this and packed with information about Belize’s sugar industry, world sugar production, Belize infrastructure (and our needs in that department) – standing in a huge GORGEOUS dead flat field in Belize, chawing on a piece of sugar cane. let me give you a download (and that’s what it is, there is just too much) about my day spoonful of sugar that I dump in my coffee each morning, gets to the table. From auto- Life is fun sometimes. Now outside of Belmopan, visiting Santander sugar and learning about how that simple pilot GPS guided tractors to syndicated loans from international banks, the modern sugar industry is no longer just a man, his field and a machete.

The sugar industry in Belize is an important one and rules the economy of the north – the Orange Walk and Corozal districts. The sugar cane farmers are often in the news – disputes and disagreements with the government, crop delays, foreign investment and cooperative problems. But, for many, it is absolutely a way of life. A “sugar cane culture”. Orange Walk is regularly referred to as “Suga City”. But a new player came to Belize in 2007, looking for a way to expand their sugar cane production (they currently grow in Guatemala) and to open their first mill and power generation facility. They are Santander Sugar – my hosts for this media day.

You might ask...why does a sugar company need a press day – hosted by a public relations company? And why did every media house in Belize from the Amandala to Channels 5 and 7 to the SanPedroScoop, come all the way out this vast acreage about 10 miles outside of Belmopan to get red noses & necks and talk sugar?

As you can imagine, this new operation is not without debate. A Guatemalan based parent company producing one of Belize’s oldest crops. Guatemala! Aren’t they trying to annex Belize!?!
And additional controversy has been in the news over the past few years. Santander’s building of deep drainage canals across critical wildlife corridors (they’ve since apologized and corrected). Also, the alleged spraying of farmers’ crops who had been squatting on Santanders’ land for years even before they purchased it from private owners. (Santander has since relocated these farmers and given them titles for their own land.)

After a full day tour...and a very tasty late lunch after..I was bursting with information delivered by this extremely smart, extremely driven, lovely team of Santander executives and employees. Let me just give you so of what I learned. Sugar. Huh. Who knew it was SO interesting?

Why Belize? 

Santander was growing sugar in Guatemala but wanted to expand operations. They looked at Costa Rica, Nicaragua and Belize and picked...Belize. The large pieces of land were availablewith European markets (due to our commonwealth status) and with the CARICOM (almost 20,000 acres in all) and with the right work and technology could be great. Belize, also, has important trade agreements countries. That really was the deciding factor. Low barriers to entry and a market for the sugar...

Where the bulk sugar will be kept – this MASSIVE, heavily re-enforced warehouse. I asked if I could come slide down the mountain of unfinished sugar on a piece of cardboard when things were up in running first quarter 2016. Answer? YES!
Sugar (to me) seems SO labor intensive and the milling and power generation SO capitally intensive and yet sugar is SO cheap in the stores...how can you make money? The world LOVES sugar. In developed countries, people consume 100lbs of sugar a year. And in developing countries around the world, many like India and places in Africa who grow sugar, people aren’t even close to that 100lb mark...yet. Demand is there.

The answer, like in any industry really, is efficiency and increasing output. Technology in milling really hasn’t changed much in the past few decades.....you are basically crunching and pressing cane through giant gears. But it’s the FARMING side that has seen huge JUMPS in innovation. It’s “filling the gap with technology”. 80% of the profit can be accounted for on the farming side. (WHO KNEW?) Using these “turbo” tractors that run 24 hours a day to flatten the land (using GPS and laser leveling when needed) to almost a zero slope. So that drainage and erosion are very carefully controlled. Using the best variety of cane. Using new seed every 5 years (after that the old stuff starts to diminish). This is not simple.

Aside from the capital invested in Belize, is Santander hiring Belizean labor? Right

now about 575 of the 800 employees are Belizean. As you can see, the processing  areas, the mill and the energy generation areas are still FULLY under construction. Certified welders and engineers are needed and they have had a bit of trouble filling ALL of those positions with qualified Belizeans. This area of the country doesn’t have, yet, a “cane culture”...and much of the labor pool is not trained for this type of labor. Santander has an apprentice program and hopes to get Belizeans in most of the positions at the facility as soon as possible. They are hiring!

Let’s talk Energy... Once sugar cane is pressed 5 times through GIANT heavy steel pressers, the fiber that is left over is called bagasse. And with the proper equipment, can be used to generate electricity. Belize used 90 mega watts of electricity per day. When up in running, in the next year or so, Santander energy will produce 18 MWs additional ... BUT they will use 9 themselves to run these facilities. 10% of what the entire country is using today! They will soon go into negotiations with BEL about price and how they are going to get this additional power “on the grid”. I asked if the price (HIGH) of electricity was at all a factor in coming to Belize and the answer was no. They are primarily about sugar.

How is all this being paid for? Much of it is being paid for by a syndicated loan – 7 banks that have come together to loan Santander sugar about $90 million US. At 7%...not bad. The banks include Banco Columbia, three Belizean banks and one multi-lateral bank (CAF – the Development Bank of Latin America) that will be keeping on top of the environmental impacts of this project. It took Santander 3 years to broker this deal with some banks visiting Belize and the site up to FIFTY TIMES! I asked them what the banks’ biggest concerns about Belize were...was it the fact that the country defaulted on it’s own billion + Super Bond just a few years ago? No...it was “country risk” but the banks were most concerned (as was Lord Ashcroft) about the 2009 government appropriation of Belize Telecom Limited. Would the Belize government just step in and decide that this sugar mill was now government property? To secure the loan from the banks, Santander had to buy insurance for this “country risk” from Lloyd’s of London. Interesting to me! As a precedent, this can, perhaps, pave the way for more foreign investment in Belize.

You guys are pretty excited about the potential for Belize and the “industrialization” of the country. But...but...but...I’m from Ambergris Caye and I see tourism as the way of the future. Not only do those two not mix...they collide. No one wants to see a smoke stack on the horizon when they are cave tubing! Santander agrees. But there is room for both. Tourism is not going to touch areas like this – Valley of Peace outside of Belmopan. It will be up to the government of Belize to cordon off and manage the country so that these two different interests are kept appropriately separate...and that there are more jobs for everyone.

Just “out of curiosity” interesting facts to me:

Columbia is the gold standard for cane farming. Belize has 4 months a year to harvest (the rest is considered rainy season), areas of Columbia have 11 months of harvest season. The company thinks maybe a refinery and a distillery (RUM!) are in the future – they are considering the economics. Santander will be sending the sugar south to the deep water port of Big Creek for transportation (in Independence, Belize). OMG. Does this mean a fleet of giant sugar trucks will be barreling over the twists and turns of the Hummingbird Highway? No. The transportation of about 400 tons of sugar can be done with just 6 trucks making two trips a day. They are also looking at using the old Coastal Highway (and making improvements there)...there they would be able to use double trucks...pulling two loads and cut their trips in half.

I had to ask...joking of course...”Is this all a secret plan to annex Belize to Guatemala?” – the answer was NO. Obviously. In fact, with the electricity being generated in Belize, in a renewable way, by Belizeans, this will move our country further towards autonomy. Right now we are buying power from Mexico. As this facility expands (and the plans are set up for room for much expansion), we could be producing all of our own energy in Belize. As well as diversifying sources.