COVER STORY
Agro-Investment Corp secures four investors for mango orchard project
Published:Friday | October 29, 2021 | 12:09 AMKarena Bennett - Business Reporter
Agro-Investment Corporation, an agency of the Ministry of Agriculture & Fisheries, is on the hunt for 20 investors to put to work some 1,000 acres of idle sugar cane lands in Toll Gate, Clarendon.
The lands have been earmarked for the cultivation of the St Julian and East Indian mangoes, a fruit that was given the green light for re-entry into the United States market two years ago. High demand is also coming from the United Kingdom and Canada.
So far, four local investors have been identified for the project. Each will lease 50 acres of land from the Agro-Investment Corporation under a 25-year, renewable lease arrangement.
In addition to the cost to lease the property, the investors would be required to spend between $13 million and $15 million to prepare the land for cultivation and put the crops in the ground.
The division, which has responsibility for developing and implementing the business and investment models that support the agriculture ministry’s policy, is working to have a model farm on the property by year end, during which time it hopes to sign off on the lease arrangements with the first four investors.
In May, the ministry announced the allocation of $128 million to develop the land into mango orchards. The funds are being used for road and water infrastructure for the orchard and the construction of a hot-water treatment plant.
“We had about 25 persons applying, four of which we are moving ahead with before the year ends. We hope to sign another four investors by the first quarter of 2022, and that may be a mix of local and foreign investors,” CEO of the Agro-Investment Corporation, Dr Al Powell, told the Financial Gleaner.
It takes, on average, three years for the crops to bear fruit. Preliminary estimates by the Agro-Investment Corporation are that at year four, mango yield per acre would run approximately 5,500 pounds.
The St Julian and East Indian mangoes fetch $150 per pound at farm gate price. Assuming each investor can cultivate the entire 50-acre plot, the investor stands to make $41.250 million in revenue annual.
“Under favourable conditions, investors can expect an average margin of 92 per cent over a 10-year period,” Powell said.
The Agro-Investment made the first call for investors in July and ran a second advertisement for the project on Sunday.
Sweeteners for investors include promise of ease of transport via the May Pen to Williamsfield leg of Highway 2000, assistance with market linkage to the US, Canada and UK through the state investment marketing agency Jampro, business planning and business counselling services, technical support, local and international food safety certification, along with access to the approved hot-water treatment facility for the treatment of mangoes for exportation.
The treatment facility is not expected to be located on property.
“There are about four crops that are in high demand, particularly in the US; avocados, ackee, mangoes and breadfruits. We want to do all four, but we are starting off with mangoes, based on the constant calls for us to supply Julie and the East Indian mangoes,” Powell said.
Since the resumption of mango exports to the US in 2019, some 10,418 boxes totalling 49,298 kilogrammes of East Indian, St Julian and Trini Graham mangoes have been exported.
The treatment facility is expected to allay phytosanitary concerns regarding the fruits, and less worries and logistical costs associated with their export to, and movement of the goods on reaching the US.