My Thoughts on Technology and Jamaica: Red Stripe and Agro-Investment Corporation signs lease Agreement on 36 acres of Land - Farmers benefit from Cassava’s Day in the Sun as we catch up with Africa's by September 2014

Monday, January 13, 2014

Red Stripe and Agro-Investment Corporation signs lease Agreement on 36 acres of Land - Farmers benefit from Cassava’s Day in the Sun as we catch up with Africa's by September 2014

“The traditional crisp taste of the Red Stripe line of Beers ... will remain on par despite this substitution. We are putting our money where our mouth is”

Managing Director at Red Stripe, Cedric Blair, commenting on Lease Agreement with Agro Investment Corporation for 36 acres of land for Cassava farm Tuesday, January 7, 2014

After much bickering and negotiation with the Ministry of Agriculture, Red Stripe has finally secured the land needed to sustainably grow Cassava to be used in Beer production as stated in the article “Red Stripe secures land for cassava farm”, Published Wednesday January 8, 2014, The Jamaica Gleaner and “Red Stripe leases land at Bernard Lodge to grow cassava”, published Tuesday, January 07, 2014 8:22 PM, The Jamaica Observer

This as they signed an agreement on Tuesday, January 7th, 2014 with Agro-Investment Corporation to lease 36 acres of land at Bernard Lodge in St Catherine to grow the first crop for the first brew anticipated in September 2014!

This is Big news gentle people, as the potential for employment and re-invigoration of the Cassava Industry in Jamaica, to quote Red Stripe’s Chairman, Richard Byles: “We hope this is the beginning of a project that will lead to many jobs for Jamaicans and to the saving of millions of dollars (foreign exchange)”.  

The possibility of other Cassava based products had got the Minister of Agriculture Roger Clarke Dancing yet again as noted in “Big Boost for Cassava Production”, published January 8, 2014 By Douglas McIntosh, The Jamaica Information Service.

The excitement for what the future hold is easily felt from the words of Minister of Agriculture, Roger Clark, commenting post-signing, quote: “Thirty-six acres might seem small. But what you intend to do is employ best practices and you are going to be moving cassava production to the level (where) farmers can make (a livelihood) out of growing cassava”.

Finally Jamaica will be catching up with Africa. Note I said Africa, not America; SABMiller and Diageo, Red Stripe’s parent company, have already been pioneering Cassava production for Beer Production and even making Cassava Beer to supply the local markets in places a diverse as Ghana and Nigeria!

Cassava has come a long way – Government Delays held up the project since 2012

This idea has certainly come a long way. A very long way, dear reader, almost as long as the time it took me to dig up all this info!

In fact, it’s part of Red Stripe’s US$14 million (J$1,484 billion) Three Year Program of modernization stated as far back as August 2012 as per the articles “Red Stripe targets local cassava, sorghum to brew Beer”, published August 10 2012, by Christopher Serju, Star Writer, The Jamaica Star and “Red Stripe Plans 3-Yr Transformation Of Beer Plant”, Published Sunday October 28, 2012, The Jamaica Gleaner.

The First US$7 million ($742 million) spend over three years, Red Stripe will be Building a new ultra-modern Brewery, both brewery house and the vessels, that occupies only 3 to 4 acres of land. The new Plant is being built while the old one remains to produce Beer.

It'll be done over a period of three years and no all at once, as Red Strip Beer has to be continuously made, to quote Managing Director at Red Stripe, Cedric Blair: “We will use a fraction of the size of the facility for the new plant. We will be able to put this new updated brewery in about three to four acres - both the brewery house and the vessels. So we will knock down the old building, sell most of the tank and use the space for further redevelopment or storage of empty bottles. We can't just knock the whole thing and go from scratch because we still have to produce Beer. So we will put in the new vessel while also taking down some sections of the building”.

They’ll also be producing their own Electricity via an investment of US$7 million ($742 million) in the construction of a Co-Generation Plant, slated for completion in October 2013. This Co-Generation Plant might possibly be using LNG Generators using Bio-Gas produced from leftover waste from Beer Production or even Solar/Wind Turbines from Windstream Technologies as noted in my blog article entitled “JPS Co and EWI forge deal to build 360-MW LNG Plant together - The Wolf of Wall Street makes an American Hustle to Energise Jamaica's Energy Future”.

Finally Red Stripe will be embarking on growing Cassava and Sorghum to replace the importation of Hops from Barley and Wheat and HMCS (High Maltose Corn Syrup), the focus of Project Grow. Guess it’s not just the Russians with those plans to grow Sorghum as I’d originally reported in my blog article entitled “Russians see potential in Ethanol Fuel Plant in Jamaica – From Russia With Love for sorghum”; Red Stripe may also have the Cassava Farmers growing Sorghum as well!

Red Stripe’s Feasibility Study - Jamaica Producers the go-to Guys to manage a 7000 acre Cassava Farm

To support this view, Red Stripe conducted a feasibility Study, which ended in February 2013 as stated in “Red Stripe cassava feasibility study ends in Feb”, published Wednesday, January 30, 2013, The Jamaica Observer

This indicated that 7,000 acres of land under Cassava here in Jamaica would be needed to make up for the 20% of imported inputs, that being Hops from Wheat and Barley and HMCS (High Maltose Corn Syrup). An islandwide project growing Cassava year round would be needed.
Based on these findings, Project Grow was born.

Also, a partnership with Jamaica Producers to manage the Farm for Red Stripe using their years of farming Expertise was forged as reported in “Red Stripe, Jamaica Producers Partner On Cassava Project”, Published Wednesday February 13, 2013, The Jamaica Gleaner and “Red Stripe, Producers partner on cassava”, published Wednesday, February 13, 2013, The Jamaica Observer.

Then at Red Stripe's AGM (Annual General Meeting) in November, they assured shareholders that their Modernization project was bang on target and that their “experiment” with Cassava wouldn't affect the taste of the favourite brew as reported in “A Red Stripe By Any Other Input Is Still 'Top-Tasting' Beer - Brewery Says Cassava Won't Affect Flavour”, Published Sunday November 3, 2013, The Jamaica Gleaner.  

However, later that month, Red Stripe’s Chairman, Richard Byles complained at the PSOJ (Private Sector Organization of Jamaica)’s PSOJ/JMMB Annual Economic Forum held on September 19th 2013 at 8:00am - 11:30am at the Jamaica Pegasus Hotel about the slow pace of Ministry of Agriculture process for acquiring land in Bernard Lodge in order to do a Test Pilot growing Cassava as noted in “Red Stripe Cassava Project Experiences Hiccups”, Published Friday November 29, 2013, The Jamaica Gleaner.

That may have been the tipping point. He made mention of Red Stripe’s problems at the PSOJ/JMMB Annual Economic Forum at which Red Stripe’s Chairman, Richard Byles was the guest speaker – and I was in attendance. In speaking of the which was basically a public forum put on by the PSOJ to discuss the way forward, I also heard him make the now much publicized comment relating to the effect of Government Bureaucracy on Private Sector companies doing business in Jamaica, quote: “We can't get the lease, which is really crazy”.

This all brings us to the present day, where the GOJ and the Ministry of Agriculture has finally agreed to loan Red Stripe 36 acres of land just to test out the idea. What a ride!

Cassava’s Day in the Sun – Farmers and the Land to benefit from Training as Thousands Employed

So here we are with an agreement on Tuesday, January 7th, 2014 for the Agro-Investment Corporation to lease 36 acres of land at Bernard Lodge in St Catherine to grow the first crop for the first brew anticipated in September 2014! Jamaica Producers are to be the managers of the Farm. It’s also in keeping with Red Stripe’s US$14 million plus expenditure to modernize and wean themselves of JPS Co (Jamaica Power Service Company). 

This despite assurance of a 30% decline in Electricity rates now that EWI (Energy World International) has signed what amount to Pact to jointly build the 360 MW LNG (Liquid Natural Gas) Power Plant as noted in my blog article entitled “JPS Co and EWI forge deal to build 360-MW LNG Plant together - The Wolf of Wall Street makes an American Hustle to Energise Jamaica's Energy Future”.

This is a big boost for Cassava farmers, who currently sell Cassava for JA$$18 and $25 per pound. This varies from parish to parish, with an average price of JA$20, according to RADA (Rural Agriculture Development Authority). As Minister of Agriculture Roger Clarke pointed out, quote: “You are going to move it to a level where farmers can make money from cassava. The spin-offs will be fantastic because small farmers will get on board”.

To take advantage of this opportunity presented by Red Stripe's demand for locally grown Cassava, farmers will have to ramp up production from the current levels of 10 to 15 tonnes per hectare to about 60 tonnes per hectare. This would match Diageo’s, Red Stripe's parent and SABMiller counterparts in Africa, Brazil and the Philippines, who already supply them with Cassava.

A Jamaican venture to replace Hops from Wheat and Barley and HMCS with Cassava would require some 7,000 acres of land here in Jamaica to displace some 20% of imported inputs. To achieve this economy-of-scale to make the project worthwhile, all Cassava Farmer in Jamaica both large and small will have to be brought up to standard in order to reliably supply Red Stripe with the required amount of Cassava year round.  

The initiative to use Cassava in Red Strip Beer production won't change the taste of the Great Jamaican Beer. Rather, it's a part of Red Stripe's Project Grow where they plan to replace imported inputs in Beer Production with locally available substitutes. 36 acres at Bernard Lodge in St Catherine marks the start of Red Stripe venture into using Cassava in this innovative way, with the first brew anticipated in September 2014 and full production in 2016.

In this case, Cassava can be used to replace Hops from Barley as well as the importation of HFCS (High Fructose Corn Syrup). Their percentage contribution to Red Stripe's Importation Bill relating to Red Strip Beer Production is as follows:

1.      40% HFCS
2.      60% Hops from Barley and Wheat

If Project Grow succeeds in replacing the above using Cassava, it'll put Red Stripe on a path to replace 20% of Brewing Material that's imported by 2016. In the process it'll also put up some fantastic employment numbers, which may be the real reason why the Ministry of Agriculture is supporting this venture with this Private Sector company:

1.      40 persons employed
2.      2,600 Cassava Farmers islandwide directly
3.      3,750 Cassava Farm Workers indirectly
4.      300 Acres under cultivation initially
5.      2,400 Acres under cultivation in five Years

To achieve these lofty long term aims, Red Stripe intends to expand the Cassava Project islandwide by training farmers. Red Stripe will utilize their ‘Diageo Learning for Life’ programme to bring Cassava farmers up to scratch with regards to the proper techniques related to growing, tending and reaping Cassava. This will mainly involve the use of Modern farming techniques as described in my Geezam blog article entitled “Solar Powered Organic Farming – Sustainable Agricultural Development and Jamaica’s Food Security”.

That means a structured coordinated regimen of Crop Rotation every three or four years with crops such as ginger and red peas to allow the crop to regain phosphates and Nitrates, saving on the use of imported Fertilizer inputs. Drip Irrigation and the use of Greenhouses may be in the mix as well, as the cost of inputs needs to be controlled to increase yield with minimum fossil fuel related inputs.

Cassava Products for Export – Potatoes and Cassava Revival of Jamaica’s Agriculture Export Sector

So aside from helping Red Stripe make cheaper Beer, what other products can Cassava make?

1.      Cassava Flour
2.      Cassava Biscuits e.g. Chips
3.      Cassava Wine
4.      Cassava Beer (apparently it’s a big thing in Africa!)

5.      Sweeteners for Biscuit manufacturing to replace imported Sugar

With an excess production of Cassava on the horizon in the next five years, other VAS (Value Added Products) that are export oriented should be a goal of the Pilot Project by Red Stripe. This as it’ll afford the Farmers additional Foreign Exchange income from Repackaging and Export of VAS during lull periods in Cassava production that are projected for every three to four years. 

Red Stripe Project Grow to cultivate Cassava on a large Scale may mean cheaper Beer and a revival of Export oriented Agriculture. If this works then in five year’s Time I’ll be singing Rihanna’s Cheers I’ll Drink to that!

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