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Woes Of Poultry And Sugarcane Industries Continued In 2002


December 26, 2002
Copyright © 2002 CARIBBEAN BUSINESS. All Rights Reserved.

After Productores Avicolas de Puerto Rico Inc. (Papri) shut down because of financial problems in 2001, the local Agriculture Department insisted that it needed to be revived in order to stabilize the industry by increasing production at Aibonito’s To-Ricos and Coamo’s Empresas Picu plant and sending all excess to Papri to be developed into chicken foodstuffs.

The majority of Papri’s 42 farmers were integrated into the Picu operations. Agriculture Secretary Luis Rivero Cubano has said the government is analyzing the possibility of purchasing Picu or reopening Papri.

Picu was forced to shut down three times in less than six months in 2002 because of alleged health and safety violations. The three plant shutdowns have negatively affected not only Picu’s finances but also its brand image. Picu was worth about $20 million and listed long-term debt of $17.9 million in fiscal 2001. Through debt restructuring, the company was able to report a net income of $1.5 million that year.

The U.S. Department of Agriculture’s Food Safety & Inspection Service (FSIS) division said the shutdowns were a result of inadequate sanitation standard operating procedures. Since Aug. 2, 2002, the FSIS had been keeping a close eye on Picu. Placing it under a "suspension of inspection in abeyance" status allowed Picu to operate as long as it corrected the various operational and safety violations that had been detected earlier in the year. The special monitoring ended Nov. 19. Picu is now working on regaining the clients it lost because of the shutdowns.

The troubles in Puerto Rico’s sugar industry also carried through 2002. In October 2001, former Agriculture Secretary Fernando Toledo and the 60 sugarcane farmers on the island signed up Dominican entrepreneur Abraham Selman as an investor in Ponce’s Mercedita Refinery. In exchange for a 50% stake in the business, Selman vowed to invest $15 million in 2002 and $35 million more through 2006.

However, things haven’t gone quite as planned.

Sugarcane farmers last year harvested 17,000 tons of sugar, which yielded 1,020 tons of refined sugar. Production was slightly better in 2002, with 39,000 tons of sugarcane harvested and 1,169 tons refined, according to statistics from the Agriculture Department. That represents only about 2% of the 50,000 tons of sugar consumed in Puerto Rico each year.

Mercedita was idle for several months and the Snow White brand was off supermarket shelves for most of 2002. It wasn’t until November that the refinery began packaging a shipment of sugar imported by Guaynabo’s Tropical Distributors. The product is sold under the Snow White brand.

What’s more, Selman has refused to relinquish his interest in the operation of the Sugar Co., which was created when the government privatized the sugar industry about two years ago.

This Caribbean Business article appears courtesy of Casiano Communications.
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