Puerto Rico sugar industry revival announced
SAN JUAN – In order to supply raw material to rum distilleries on the island, Gov. Alejandro García Padilla announced has announced the start of a sugarcane planting, processing and industrial molasses production project, which he said would mark the return of the sugarcane industry to Puerto Rico.
The initiative is part of the economic development projects driven by García Padilla’s administration that have contributed to a 24% growth in the island’s agricultural gross income.
“I am pleased to announce that the Commonwealth has signed a lease and incentives agreement with Serrallés distillery so it can be in charge of managing this project—from sugarcane planting and harvesting to processing the molasses,” the governor said.
The governor explained that the project would not be financed using public funds either in its agricultural or industrial phase, but rather through an investment by the distillery itself. In addition, the industrial phase will take place in a sugar mill to be built and equipped by the company and which will be located at the former Central Mercedita in Ponce. However, García Padilla said the government would provide incentives to the project through the instruments available by law for any agricultural enterprise and manufacturing operation.
It is expected that this new sugar mill will create more than 300 direct jobs over a five-year period. The distillery estimates that the new sugar mill’s production will allow it to replace about 60% of the molasses it now imports.
“For the agricultural phase, that includes renting 34,500 ‘cuerdas’ [about 33,507 acres] of land owned by the Land Authority and incentives for agricultural jobs created, permanent improvements to crops, and investment in equipment, machinery and tools,” the governor said.
The Serrallés distillery will also oversee sugarcane planting and harvesting, for which it will increase the number of acres dedicated to the project from the current 874 to 11,655. The lands are located in the island’s western and southern regions.
“We started this project in Jan. 22, 2014, knowing that this day would come. We began planting sugarcane in the Coloso Valley in Aguada. Today, more than two and a half years after we started this project, we currently have 900 ‘cuerdas’ [874 acres] planted with sugarcane. Eight hundred [777 acres] are in the Coloso Valley and 100 [97 acres] are in Guánica. We have been planted 21 varieties of sugarcane, and the project—at this early stage—has created 35 direct jobs,” the governor said.
Roberto J. Serrallés, vice president of business development at Serrallés Distillery, highlighted the project’s importance for both the rum industry and his company.
“Being able to help in the revival of the sugarcane industry represents an important step for the rum industry in Puerto Rico because we can strengthen the import substitution in terms of the molasses we use in the manufacturing process. Serrallés was established here in Mercedita almost two centuries ago to plant sugarcane, and since then this product has been very important for our company. It is a return to our roots, but with a futuristic vision. We hope to complete the remaining phases and to help Puerto Rico to pick up this industry again with advanced technology and innovation and successfully develop it,” the company vice president said.
It was pointed out that the revival of this industry on the island is extremely important because it ensures reimbursement of the federal rum cover-over excise tax. This source of income amounts to more than $300 million a year that would be entering Puerto Rico government coffers, which would represent a significant boost to the local economy.