BELIZE CITY, Wed. Dec. 21, 2016–A whopping 6 million Belizean dollars—that is how much the Citrus Growers Association (CGA) says it needs to rebound and improve citrus production, which would counter some of Belize’s economic challenges by bolstering growth and building the country’s foreign reserves.
Hard-hit in recent years by citrus greening, a devastating disease, growers want to plant new trees and replace old ones, and they will start to seek investors early next year to help finance the project.
Henry Anderson, CGA’s chief executive officer, said that the sector is well-positioned to contribute to major export earnings. He told the media today that citrus prices are at an all-time high, with a box of oranges fetching up to BZ$16 on the market.
He projected that within the next three to five years, prices will soar even higher and as prices continue to increase, Belize can benefit exponentially.
According to Anderson, Belize’s major citrus-producing competitors in the hemisphere have lately seen a decline in their production. Brazil, the largest producer, has seen a reduction of 18%, while the State of Florida has seen a drastic reduction in sales from $225 million to only $70 million.
However, for Belize to maximize its profits, it must plant more trees and replace older trees which have been producing for almost 25 years. Anderson said that 400,000 new citrus trees will be planted. The seedlings for these trees will be produced by a spinoff company of the CGA, the Plant World Nursery Limited, a separate legal entity located at mile 32 on the Southern Highway, on the Red Bank Road.
The CGA will maintain 60% control of the subsidiary, formed in 2014, while 40% of the shares will be available to prospective subscribers in a public offering.
Managing Director of Legacy Fund Limited, Ervin Perez, said the share offering will be opened at the end of January 2017. A minimum of 100 shares will be offered at $5 each, “priced to provide a dividend yield of 6%.”
Belize is the Brazil of CARICOM in terms of citrus production, and it benefits from common external tariff protection, Anderson said. CARICOM countries which purchase their citrus products outside of CARICOM subject themselves to a tariff of 35%, he added.
When the media asked why, considering the strong projected earnings reported by the CGA, the association did not opt to apply for a regular bank loan, Perez explained that given the global financial volatility, the avenue selected is optimum. Non-payment of a bank loan would mean default penalties; however, if payments are not made to shareholders in one year, they can be rolled over to another year. Also, payments to shareholders will only be made if Plant World Nursery is profitable, although “preferred shareholders” would be guaranteed their payments, he said.
When the media asserted that the CGA is not in its most robust financial state, Perez said that Plant World Nursery, which he said will remain alive and active for a longtime, is established as a separate entity, with a fresh board of directors and shareholders.
“The industry is so large in the south, it cannot fail,” he emphasized.
According to the CGA, they represent 90% of growers and their members are responsible for 60% of the country’s citrus production.