Jamaica ethanol exports earn $120 million in revenues

A joint-venture ethanol project between Jamaica's state-owned oil refinery Petrojam and Brazil's Coimex Group has generated some US$120 million (J$8.16 billion) in revenues since it began operation two-years ago. The Coimex Group says the plant had exported 250,000 cubic metres or 66.05 million gallons of ethanol to the United States over the period, representing 65 per cent of total ethanol exports from Jamaica to the United States (U.S).

The Coimex Group has described the joint-venture as very successful. Manfred Wefers, head of Coimex's Alcohol Business Unit, says the Brazilian company was encouraged to consider new investments in that country. The impressive numbers have also prompted Brazil's Ministry of Foreign Affairs to invite representatives of the project to join President Lula during his biofuel diplomacy tour, currently underway in Central America.

The 150 million liter (40 million gallon) per year ethanol dehydration plant, which is run by Petrojam Ethanol Ltd. (PEL), was rehabilitated at an estimated cost of US$10 million shared between Petrojam and Coimex. The venture represents the single largest investment in the Caribbean by the Brazilian group, which trades coffee, sugar and ethanol in the European Union, Asia, Japan, U.S., Middle East, Canada and the Caribbean.

PEL exports ethanol to the USA under the Caribbean Basin Economic Recovery Act (CBERA) of 1983 which provides exemption of duty for fuel grade ethanol up to a quota of 7% of US domestic production. Exporters not falling under the CBERA are faced with an ethanol tariff of US$0.54 per gallon:
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The initial shipments to the U.S. consisted of hydrous ethanol from Brazil dehydrated at the Jamaican plant. The plan is to increase production to 250 million liters, relying on locally produced ethanol.

In 2006, Petrojam Limited and PEL also embarked on a program to introduce ethanol in gasoline for local use. The first phase of the program included a pilot study of the E10 blend (10% ethanol, 90% gasoline) in a variety of cars over a period of six months. The objective was to validate existing data on E10 blend and this was successfully completed at the end of October 2006. The second phase is to introduce the E10 in all blends of unleaded gasoline in Jamaica. Assessment of infrastructural work for the refinery, loading terminals and service stations along with the reliability of supplies are currently in progress. The outcome of this assessment will determine the actual date of roll out to the consumers.

PEL continues its effort to partner with investors in the development of the local sugar cane industry for the production of fuel ethanol to export and for local consumption.

Partnership extended
Coimex said a study being conducted in collaboration with Petrojam to double production capacity at the dehydration plant was at an advanced stage and noted that it has extended its partnership in the facility to 2011. Petrojam's managing director Winston Watson disclosed recently that the refinery was currently searching for a suitable location to build a new 60 million gallon dehydration plant to expand local ethanol production.

This, according to Petrojam, would require the planting of 9,000 additional hectares of sugar cane. "We welcome this, but we will, of course, have to wait until they actually start using local feedstock so that any further planting can begin. We are certainly anxious," said chairman of the All-Island Cane Farmers Association, Allan Rickards.

Coimex also said it was collaborating with the Government in its plan to replace 10 per cent of the MTBE in gasoline with ethanol. It said it has been facilitating the training of Jamaican technicians in the use of the technology that was developed in Brazil to blend gasoline and ethanol.

The 59-year-old Coimex Group is among the top 100 businesses in Brazil. Last year the group recorded revenues of US$1.1 billion. The company currently operates businesses in logistics, infrastructure development and foreign trade. It is presently involved in the construction of a US$500 million port - the largest privately-owned port facility in the country.

Coimex is also among the nine companies recently shortlisted by the Government to bid for the assets of the Sugar Company of Jamaica, which owns and operates the five state-owned sugar estates.

References:
Agrosoft: Coimex Trading responde por 65% das exportações de etanol da Jamaica para os Estados Unidos - s.d. (August 8, 2007)

Gazeta Mercantil: Brasil aposta na exportação de álcool via Caribe - August 8, 2007.

Jamaica Gleaner: Ethanol exports earn US$120m in revenues - August 9, 2007.

Jamaica Gleaner: Ethanol plant opened in Jamaica - Will supply an initial 150 million litres to US - November 24, 2005