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.
Life is fun sometimes. Now let me give you a download (and that’s what it is, there is just too much) about my day outside of Belmopan, visiting Santander sugar and learning about how that simple spoonful of sugar that I dump in my coffee each morning, gets to the table. From auto-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 available (almost 20,000 acres in all) and with the right work and technology could be great. Belize, also, has important trade agreements with European markets (due to our commonwealth status) and with the CARICOM 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.
Some of the team. From left to right. The CFO, the head of human resources and Edgar Hernandez, one of the directors.
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?
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.
This one “building” with the crane over it…the boiler that was purchased from India…
…is represented in this plan by the orange arrow.