Caroni’s steel deal

CARONI (1975) LIMITED has sold two of its abandoned sugar mills for $2 million. The sale was made via tender to a London company which teamed up with a Trinidad businessman to close the deal last month. The factories are the Reform Sugar Mill in south Trinidad and the Woodford Lodge mill in Chaguanas. They were sold to the buyers as scrap iron.

The factories are currently being dismantled and are being prepared for shipping to the international scrap iron market which is currently riding a wave of soaring prices. Caroni’s Chief Executive Officer (CEO) Deosaran Jagroo admitted to Sunday Newsday on Monday that the sale of the two abandoned sugar mills had left a bitter-sweet taste in the company’s corporate boardroom.

“We sold the abandoned factories to a local buyer who teamed up with a company in London.

Unfortunately, tenders for its sale went out when the price of steel on the international market was low,” Jagroo said. But all was not lost in the sale and Jagroo expressed optimism that the deal will benefit Caroni in more ways than one.

Though they might be smiling all the way to the bank, the buyers have an obligation under the terms of the agreed price, to restore the Reform and Woodford Lodge sugar mill sites to an “acceptable” standard.

The Environmental Manage-ment Agency will inspect the sites to ensure compliance with these terms.

Local scrap iron dealers in Central and South Trinidad described the sale as as “giveway.” All Trinidad Sugar and General Workers’ Trade Union (ATSGWTU’s) president general Rudy Indarsingh said he would never be able to digest the ‘ridiculous giveaway’ of tens of thousands of tonnes of iron for $2 million and called for an investigation into the tendering procedure.

The Reform mill, which had been abandoned for more than 15 years, was overgrown with bush.

The Woodford Lodge factory ground to a halt at about the same time and had been plagued by vandalism. Both factories suffered considerable loss of valuable pieces of equipment and had become eyesores in the middle of undulating sugarcane fields.

Government’s recent restructuring of the sugar industry saw closure of the Brechin Castle Sugar factory.

The takeover company — Sugar Manufacturing Company of Trinidad and Tobago — now targets a drastically low sugar quota. The objective of the restructured Caroni is to convert equipment and manpower into manufacturing more economically viable sugar cane byproducts such as rum and ethane.

With thousands of acres of its lands left uncultivated, Caroni’s mechanical assets in the form of factories and equipment have been lying idle.

“But they’re not up for grabs,” CEO Jagroo insisted.

He said tenders for purchase of the Reform and Woodford Lodge mills went out as a scrap iron sale several months ago when scrap iron prices on the world market were just below US$140 per tonne. Recent wholesale buyout of major steel mills around the globe by Mittal Steel and Japanese firms sent prices for scrap steel skyrocketing to US$250 per tonne.

By that time, unfortunately, the Caroni $2 million sale had already been finalised.

President of the Trinidad and Tobago Scarp Iron Dealers’ Association, Kumar Ramlal, who was critical of the ‘giveaway’ said local scrap iron dealers should have been given an opportunity to purchase the mills. He said Caroni allowed just 90 days for local bids.

“That apart,” Ramlal said, “both mills have about 15,000 to 20,000 tonnes of scrap steel and every day the price of steel is rising.”

A conservative price for both mills at current prices, Ramlal estimated, could be between $7 and $9 million dollars.

“The price is simply mind-boggling,” ATSGWTU’s Indarsingh said. Cane Farmers’ Assocation secretary general/legal adviser, Dave Persad, said Caroni should have obtained international advice on the sugar mill sale.