Agro Investment Corporation Gateway to Leasing Government Lands

Jamaica Information Service Feature Published March 9, 2019

GraceKennedy Goes Into Farming – Targets 50% More Supplies From Agro Park

GraceKennedy Limited, a large buyer of agricultural crops as inputs for its food manufacturing operations, is taking a more direct interest in farming under a new partnership with the Jamaican Government to supply its St Elizabeth factory.

Previously, the conglomerate provided technical support to farmers in its supply chain. Now, it will be more involved as an agro park investor, utilising lands leased in the parish.

On Tuesday, Group CEO Don Wehby told the Financial Gleaner that Grace Agro-Processors, a division of GK Foods & Services Limited, is partnering with the Ministry of Industry, Commerce, Agriculture and Fisheries, MICAF, to establish the agro park on 110 acres at Ridge Pen in proximity to its processing plant in the neighbouring district of Hounslow.

GraceKennedy is not expected to till the soil itself. Instead, it will sublease plots on the property to different farmers, who will have GK as a guaranteed buyer for their output.

The company expects planting of crops to begin in November of this year and for reaping to begin in May 2019.

“GK has entered into a lease with private owners to secure the land, which it will sublease to members of its supply chain to facilitate an expansion of their crop production. In addition to land, GK will facilitate access to specialised equipment to mechanise the land preparation and planting processes, making the participating farmers’ operation substantially more efficient,” Wehby explained.

The GraceKennedy conglomerate is heavily invested in food and financial services. Food trading brings in the majority of revenue, and is highly profitable for the conglomerate, but its money and financial services segments has a better track record on net margins, that is, the proportion of revenue that flows to the bottom line.

That trend was borne out again in the first quarter ending March when food trading accounted for $20 billion, or 80 per cent, of the $24.91 billion in revenue for the period, but less than half, or $841 million, of the $1.86 billion of pretax profit, before inter-segment eliminations, reported by the conglomerate. The financial division contributed 20 per cent of revenue while accounting for $1.02 billion in pretax profit.

For the group, revenue grew five per cent, while net profit spiked by nearly 15 per cent to $1.3 billion for the March quarter.

Ridge Pen key

GraceKennedy opened its Hounslow facility in 2011 after investing $43 million in the facility to produce pepper mash, and package fresh vegetables. The company contracts farmers to supply about 45,000 pounds of West Indian red and Jamaican Scotch bonnet peppers to be processed as mash for sauces, as well as carrots, cabbage, lettuce, callaloo and onions.

The facility is equipped to produce, process and distribute fresh produce to the retail and hotel trades, and to export pepper mash.

Wehby said Grace Agro-Processors will assist participating farmers in its Ridge Pen Agro Park with access to financing for the inputs required to implement best practices; share the results of its research on its supply chain, including “a custom-made nutrition programme and improved planting material”; and provide guidance on achieving Global GAP certification for farms.

MICAF will handle the infrastructure works for irrigation, roadways and drainage, and assist with the procurement of additional lands for future expansion, he said.

However, Wehby said he was not at liberty to disclose the investment in the overall project, citing “deference to the partnerships,” while noting that it was substantial and projected to grow output along GK’s supply chain by more than 50 per cent.

Plans for a ‘mother farm’

Wehby also expects Ridge Pen to eventually become the “mother farm”, whose practices will be copied by the various farmers within GK’s supply chain.

“The intention is for the mother farm to act as a commercial-size tutorial example of all the best practices at work,” he said. It will include experimental plots to test the efficacy of new methods, technologies and crop varieties, as well as a seed bank to be developed “from true to type, healthy, high-yielding plants at the mother farm to facilitate access to quality planting material for the rest of the supply chain,” he said.

“The mother farm will also act as a central collecting point for smaller farmers nearby to meet the delivery trucks transporting produce to the factory,” Wehby noted.

By converting 110 acres of idle lands “and putting it into the hands of skilled farmers eager to expand production, GK’s intention is to create a reusable model for supply chain capacity improvement, through the establishment of a well-utilised, efficiently operated agro park facilitated by public-private partnership which, in the medium term, will increase production, reduce imports and increase exports,” he said.

http://jamaica-gleaner.com/article/business/20180518/gracekennedy-goes-farming-targets-50-more-supplies-agro-park

Growth & Jobs | Farmers To Participate In Agro-Economic Zone

A total of 224 farmers have already registered to participate in the agro-economic zone being established at Holland Estate, St Elizabeth.

Minister without Portfolio in the Ministry of Industry, Commerce, Agriculture and Fisheries, JC Hutchinson said the crops to be cultivated along with other needs have been identified under the project, which is being implemented by the Agro Investment Corporation (AIC).

He noted that the AIC will be meeting with all the farmers within another three weeks “to outline how they are going to be moving forward with the project.”

He said that the property is expected to be handed over at the end of June, once the outgoing owners have completed the reaping of crops.

The 2,400-acre agro-economic zone will comprise farms as well as packaging and processing facilities. The project is expected to provide jobs for over 900 persons.

Produce, when reaped, will be graded and distributed, with Grade ‘A’ produce to go to hotels and the export market; Grade ‘B’ to the local market; while Grade ‘C’ produce will be used for purées, juices and other value-added items.

“We have an investor, who is looking to set up a complex to do the full grading, packaging, processing and marketing,” Hutchinson said.

He noted that the property will be secure. “The entire property will be fenced and current gaps in fencing will be repaired. Also, for every exit and entrance, AIC is going to be putting up (security) cameras and on top of that, we will be having a drone that will be monitoring the place,” he noted.

http://jamaica-gleaner.com/article/news/20190205/growth-jobs-farmers-participate-agro-economic-zone

Agro-Parks Designed To Facilitate Investments By Wide Cross-Section Of Stakeholders – Food Industry Interests And Suppliers Targeted

Chief Executive Officer of the Agro-Investment Corporation, Sylburn Thomas, is urging Jamaicans to exploit the investment opportunities now available at the Government’s agro-parks islandwide.

He was of the view that Jamaican’s should invest in the agro-parks, as he believed that if they can consolidate the entire value chain in a physical location, risks can be minimized and more can be done from synergy and knowledge sharing and do more from efficiencies and scale economics.

Mr. Thomas said the agro-parks concept is designed to facilitate investments by a wide cross-section of stakeholders, with food industry interests and suppliers among those targeted.

Mr. Thomas said agro-parks which are currently available for additional investments include: Spring Plain with 943 acres of arable land, and Ebony Park which has 1,197 acres, both of which are situated in Clarendon; and Elim, St. Elizabeth, which has 2,000 acres for aquaculture.

He was speaking at an agricultural information forum hosted by Jamaica Promotions Corporation (JAMPRO), at the Terra Nova Hotel in St. Andrew last week.

http://jamaica-gleaner.com/article/news/20190205/growth-jobs-farmers-participate-agro-economic-zone

Agro Invest to expand farming acreage, divest AMC Complex

THE AGRO-INVESTMENT Corporation (Agro Invest), a business facilitation unit with the Ministry of Agriculture which handles several multi-acre agroparks across the island, indicates that it is set to significantly increase acreage for farming in the next 36 months, even as it increases its call to the private sector to invest in the sector.

Speaking last week in Kingston at a forum staged by Jampro, Chief Executive Officer of Agro-Invest Sylburn Thomas said new parks under planning include greenhouse and livestock agroparks, both based on a clustering and sharing economy.

Agro Invest is also planning an organic agriculture and nutraceutical agro-park with isolation and quality management systems attached. Thomas described neutraceuticals as a growing market valued at US$248 billion in 2017. Of this amount, 60 per cent accounts for dietary supplements and 40 per cent comprising functional foods and beverages.

Jamaica’s agro-parks’ initiative was implemented in 2012 out of the need to increase agricultural production and i mprove the quality of produce for the domestic and international markets. There are currently nine agro -parks established across the island. Jampro said that an additional 21 are planned for establishment by 2020.

Thomas said that Agro Invest will also be spearheading the divestment of the AMC Complex, which houses its offices, processing and warehousing facilities for several ventures on Spanish Town Road in Kingston.

New projects slated for execution in the next 36 months also include the Essex Valley agroeconomic zone in St Elizabeth comprising 1,700 acres.

Thomas said that Agro Invest is also planning an agriculture economic zone in south Clarendon and south St Catherine comprising 4,160 acres. He said Agro Invest is currently seeking public-private partnerships for the construction and operations of packing and processing facilities

In total, he said, 500 acres of agro-park will be developed in 2018, 2,000 acres in 2019 and another 2,500 acres by 2020.

TARGET IMPORT SUBSTITUTION

The Agro Invest CEO is encouraging private-sector members to target i mport substitution in light of Jamaica’s food import bill which, he noted, “has moved from close to hitting the US$1-billion mark in 2014 to just under US$850 million in 2017.”

He said investors will benefit from support services in the agropark business, which is “an area of intensive agricultural production which seeks to integrate all facets of the agricultural value chain. These are pre-production, production, harvesting, postharvesting and marketing”.

Thomas said the parks feature irrigation and drainage infrastructure, quality management systems, farm layout and road networks, technical onsite support, business facilitation and market linkages support.

The parks are a sharing economy, including farm equipment, minimal processing facilities, security and insurance.

Thomas said there was also land available in existing parks for investment. This includes Spring Plains agro-park in Clarendon comprising 943 acres of arable land, with 100 acres earmarked for Youth in Agriculture and 168 acres currently available for lease.

At Ebony Park, St Catherine, the agro-park comprises 1,197 acres of arable land and there are 310 acres currently available for lease. At Amity Hall, also located in St Catherine, there are 2,340 acres of arable land, and 2,019 acres are now available for lease.

At Plantain Gardens River in St Thomas, the agro-park comprises 253 acres of arable land and of that amount, 70 acres are currently available for lease, Thomas said.

The aim of the parks is both for import substitution and internal market focus, he said, noting that farmers were being encouraged to grow onions, Irish potato, raise livestock (small ruminants), as well as cultivate cassava, fruits and vegetables, tomatoes (for paste), and peas and beans.

For products which can be produced in, and exported from, the agro-parks, he listed sweet potatoes, peppers (Scotch bonnet), yams (using minisett technology), pumpkins, dasheen, herbs and spices, neutraceuticals, fruit tree crops (mangoes, avocados, graviola) and Irish potatoes.

The Agro Invest head noted that in 2016, Irish potato imports were valued at more than J$1 billion. As for sweet potato production, Thomas said there was a high demand internationally, with the United Kingdom importing US$114 million worth of the tubers in 2016. Sweet potatoes, he said,

can also be processed to make flour, fries, chips and pastry.

Thomas said yams also had high export potential, with “consistent high international demand and processing potential.” Total US imports of yams totalled 47,430 metric tonnes in 2016, of which Jamaica accounted for 15,686 metric tonnes or 33 per cent.

The Agro Invest CEO said that for produce and fruits, there is also a lucrative market locally for fresh produce and many processing options exist.

As outlined by the Government, the objective of the agro-parks is to bring underutilised rural land and labour into a more efficient agricultural production system. Crops should be produced at competitive prices to facilitate import substitution, enhance the agricultural supply chain, deepen industrial linkages, and increase food security.

The Jamaica Information Service indicated in September 2017 that more than 3.5 million kilograms of produce had been harvested as at that date from the parks. Crops included onions, peppers, vegetables, potatoes, yams, melons and pineapples.