Caroni (1975) Limited

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Caroni (1975) Limited
legal form Private Limited Company ( Ltd. )
founding November 15, 1978
resolution July 2003
Reason for dissolution Liquidation by the owner
Seat Brechin Castle, Couva , Couva-Tabaquite-Talparo
management most recently Chandra Bobart
Number of employees 9000
Branch Agribusiness

Caroni (1975) Limited was the largest agricultural company in Trinidad , which existed from 1975 to 2003 and was the largest employer in the country at the time. The scandalous liquidation of the company ushered in a sustained focus on the service and production sectors in Trinidad.

history

Caroni (1975) predecessor was Caroni (1937) Limited , which was founded in 1937 after the previously state-owned Caroni Sugar Estates (Trinidad) Ltd was bought up by the British agricultural giant Tate & Lyle . In 1970 the Trinidadian state bought 51% of the shares in Caroni (1937).

When Great Britain joined the EEC , it became necessary to reorganize the sugar exports of former British colonies to Europe, as several European countries (particularly Germany and France) wanted to protect their sugar beet-based sugar industry from competing products. The Lomé Sugar Protocols of 1975 regulate the sugar exports from the former colonies to Europe by contract and set a price ceiling. Trinidad had undertaken to deliver sugar exclusively to Great Britain, where Tate & Lyle had a monopoly on the refining of sugar from 1976 through the acquisition of Manbré and Garton , which resulted in a further reduction in the achievable sales for Trinidad. Tate & Lyle had put pressure on the British government when drafting the Lomé Sugar Protocols and had it stipulated that the former colonies were only allowed to export raw cane sugar to the EEC. As a result, Trinidad lost sources of income by expanding the value chain, while Tate & Lyle had ensured that its refineries were fully utilized.

In 1975 the Trinidadian state Tate & Lyle bought their remaining 49% stake in Caroni (1937) and renamed the company Caroni (1975) Limited. As early as the following year it became apparent that the production costs for raw sugar were higher than the prices granted by Tate & Lyle. From 1975, Caroni (1975) added small, privately operated sugar cane farms to the company, quickly became the largest employer in the Trinidadian agricultural sector and remained so until its liquidation in 2003. When the company was renamed, a paradigm shift took place as its predecessor, Caroni, controlled from Great Britain (1937) acted in a strictly export-oriented manner in order to cover the import requirements for sugar cane of the owner Tate & Lyle, while Caroni (1975) also served the domestic market. From the 1980s onwards, Caroni (1975) tried to improve the earnings situation through diversification and expanded the business area to include the cultivation of citrus fruits and rice as well as the breeding of shrimp and cattle, products that (with the exception of citrus fruits) are primarily intended for the domestic market. The company also offered its suppliers weed killers, fertilizers and other agricultural products at subsidized prices and operated its own research station for the development of insecticides and improved cultivation methods.

Even in the 1990s, Caroni (1975) generated deficits every year, which the government had to make up for. Plans to outsource the unprofitable sugar cane production and to subordinate it to the growers through land redistribution failed several times despite the commitment of consulting firms such as Ernst & Young . An analysis by the University of Wisconsin from the year 2000 showed that Caroni (1975) paid the sugar cane-growing tenants of his land on the one hand a fixed price for their products, but on the other hand only received one-seventieth of the rent that could be obtained on the free market and that was still horrific administrative - and had to deduct personnel costs.

After 28 years, Caroni (1975) Ltd. settled on July 31, 2003 by the owner, the Trinidadian state. Part of the business was taken over by the newly founded Sugar Manufacturing Company (SMC), which operates a refinery in St. Madeleine, and Estate Development and Management Company (EMDB), which was supposed to manage the lands formerly owned by Caroni (1975).

Effects

9,000 employees became unemployed and received a severance payment called the Voluntary Separation of Employment Package (VSEP). Including suppliers and self-employed sugar cane farmers, at least 20,000 people lost their jobs and livelihoods. 312 km² of land, about the area of ​​Bremen including Bremerhaven or 6% of the territory of Trinidad and Tobago, fell to the state, from 2005 onwards, parts of it were assigned to former Caroni employees.

In order to offer the severed employees an opportunity to accumulate wealth, the government installed an investment plan. The state-run Agricultural Development Bank of Trinidad (ADB) and the United Trust Corporation (UTC), which is subordinate to the Central Bank of Trinidad, offered the former employees to invest their VSEPs in an existing UTC fund for six years, with the possibility of a generated a return of at least 12% over the six-year period and promised a return of at least 100%. The deposit amount was immediately available to the investors as an interest-bearing loan, although repayment should only be made after the return of at least 100% had been achieved. After six years the fund's return was only 48% and was withheld by the ADB so no dividend was paid. A waiver of the interest payments came about only through threats of legal processing.

In 2005, a sugar shortage occurred in Trinidad, which was the Caribbean's largest sugar exporter until Caroni was liquidated (1975). In 2013, Trinidadian rum producers had to grow sugar cane for their products in Barbados, as not enough sugar cane was grown in Trinidad. While citrus fruits were exported to Great Britain before the conglomerate was closed, some fruit juices have since had to be imported from abroad.

In 2007 the EU approved financial aid amounting to 75 million euros, to be disbursed in several tranches, for the restructuring of the Trinidadian agricultural sector and for direct aid for the workers affected. In 2014 the Association of Trinidadian Sugar Cane Producers (CPATT) complained about massive delays in the disbursement of aid.

backgrounds

The operational business of Caroni (1975) had been in deficit by the beginning of the 1970s at the latest, and the deficits increased over time. In 1970 the company made a loss of TT $ 4.6 million, but in 2000 it had a loss of TT $ 352 million. In a 1999 analysis, the IMF concluded that Caroni (1975) employed vast numbers of underqualified workers and paid them too high wages, and recommended privatization.

Since the winding up of Caroni (1975) Limited was a political decision, the background to this decision was an issue that was extensively illuminated in the Trinidadian media. Those affected in particular criticized the government for not informing the trade unions or other affected groups of the impending closure in advance of the decision.

In 2013, the then Transport Tourism Minister Stephen Cadiz (UNC) expressed the assumption that the trigger for the decision was the power vacuum created after the stalemate in the 2001 parliamentary elections and that the then ruling PNM was the largest due to the closure of Caroni (1975) Opposition party UNC wanted to harm. In 2001, both the UNC and the PNM had 18 seats each in parliament. The sugar cane belt in the former County Caroni is considered the home of the UNC.

Individual evidence

  1. ↑ a b Article from the Sugar Heritage Village Project. Retrieved April 25, 2015 .
  2. ↑ Goran, Tappy, Lê: Dietary Sugars and Health, p. 21. CRC Press 2014.
  3. ^ A b c d Lovell Francis: Lomé and the Trinidadian Sugar Industry 1975-2005 . In: History in Action . Vol. 3, No. 1, September 2012. (PDF, 76 kB)
  4. ↑ a b Goran, Tappy, Lê: Dietary Sugars and Health, p. 22.
  5. ^ A b Caroni Land Management Review, analysis of the University of Wisconsin's Land Tenure Center. Retrieved May 11, 2015 .
  6. ↑ Guardian article, July 19, 2012, available online
  7. ↑ Article on Trinidad Dreamscape. (No longer available online.) Archived from the original on May 18, 2015 ; Retrieved April 19, 2015 .
  8. ↑ a b Goran, Tappy, Lê: Dietary Sugars and Health, p. 23.
  9. ↑ Shaliza Hassanali: 'VSEP sweetener' turns sour for former Caroni workers . In: Trinidad Guardian . October 14, 2012.
  10. ↑ Article on Caribbean Net News of September 9, 2005. Retrieved April 19, 2015 .
  11. ↑ a b c Newsday article from May 18, 2013, available online
  12. ↑ Govt $ 80.4m EU grant receives funding . In: Trinidad Guardian . March 10, 2013.
  13. ↑ Newsday article, November 5, 2014, available online
  14. ^ IMF Staff Country Report No. 99/48
  15. ↑ Newsday article, April 26, 2006, available online