Jamaica Broilers Closes Ethanol Plant03 February 2009
JAMAICA - Jamaica Broilers has temporarily closed its ethanol plant to carry out essential maintenance, according to the company's new president and CEO, Christopher Levy.
Faced with a soft energy market, Jamaica Broilers Group has ceased production at its ethanol plant, reports Jamaica Gleaner.
However, Christopher Levy, the new president and CEO, says it is a temporary measure to last less than two months.
"Being as how the markets are - the crops in Brazil and the soft market in the United States - we have stopped for a month and a half," said Mr Levy.
"This is how the operation runs; it is routine for us, and we are just using the time to do some maintenance work."
The plant will ramp up again in March, he told Jamaica Gleaner, adding that the next servicing will likely happen in December.
In the meantime, the workers remain on the payroll.
"All the workers remain employed and are still at work during this period," said Mr Levy. "No one will be affected."
He said, too, that the second ethanol plant under development will be completed this month.
Mr Levy's ascension to Jamaica Broilers' top job became effective on 1 February. He succeeds his father, Robert Levy, who in turn has replaced R. Danny Williams as chairman of the board.
The new CEO, up to his promotion, was directly in charge of the ethanol operation, JB Ethanol Limited, a responsibility now expected to be passed to brother, Stephen Levy.
JB Ethanol's 60-million gallon plant at Port Esquivel was commissioned in July 2007. It produces fuel-grade ethanol from hydrous or wet ethanol for duty-free export to the United States under the Caribbean Basin Initiative (CBI).
Ethanol in the short period has come to rival poultry as the top revenue earner in the group.
In its six-month financial period ending 1 November 2008, sales of the biofuel reached $5 billion, compared to $4.55 billion for poultry. Total sales amounted to $13 billion.
The Broilers President sidestepped questions on the impact on earnings from the temporary closure but, based on earnings to November, a six-week closure would be equivalent to more than $1.2 billion in sales, according to the Jamaica Gleaner report.
"Right now it is not suitable to sell ethanol in this market, so we will hold off on our sales," said Mr Levy. "We are working on various initiatives, but we don't want to sell right now because the market is soft."
The ethanol plant, he said, has a different maintenance schedule than other manufacturing operations whose equipment can be serviced in periods where the machinery is idle.
"It is not like an ordinary factory that stops at nights and can be maintained at that time," said Mr Levy.
"When we start again in March, we will not stop until about December," he told Jamaica Gleaner.