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Jamaica Biofuels Due Diligence Project

In November, 2014 a professional services agreement was executed between Lake Erie Biofuels dba HERO BX (HBX) of Erie, PA and Garth Solutions, Inc. (GSI) of Miramar, Fla. Under the direction of Glen Garth, GSI was hired to lead an unprecedented due diligence & business case analysis for launching a commercial-scale, 20 million gallon per year biodiesel plant on the island of Jamaica (JA) and to consider a greater, regionally integrating Caribbean business model.

Bolstered by favorable governmental policies such as the Jamaica National Energy Policy (2009-2030), private sector support, and a track record of resource allocation to support development of domestic agribusiness and renewable energy, the foundation to establish a meaningful due diligence analysis was secure.

Jamaica Project Drivers

  • Strategic location relative to shipping lanes coming out of the Panama Canal as well as major feedstock sources on the US Gulf Coast, US East Coast, and South America
  • Trade agreements with the US, Caribbean, and EU that provide for favorable import/export opportunities
  • Upgraded Jamaica credit ratings to B and positive economic outlook
  • The Panama Canal expansion is projected to double shipping traffic through the region
  • Major infrastructure improvements are quickly transforming island efficiency and logistics, the country’s first major highway system was slated to be completed in 2016

Public-Private-Partnership (PPP) Approach

Given the needed level of governmental engagement and support to realize the business case, for example, the need for an island-wide biodiesel mandate (similar to current E10 mandate for ethanol in JA); it was determined that such a pioneering and unprecedented scale of project would be best deployed and positioned for long-term success as a Public-Private-Partnership (PPP) with the Govt. of Jamaica.

The spirit and level of economic value chain impact intended for Jamaica and the greater Caribbean environment and community were squarely in line with many of the key ideas expressed in the joint statement released by the US State Department and CARICOM states at their meeting in Washington DC in January 2015. This collaborative effort led by the US Govt. and championed by the US White House became publicly known as the Caribbean Energy Security Initiative (CESI).

To drive the PPP approach, key relationships and meetings were forged with:

  • United States White House
  • White House Office of Business Liaison, U.S. Dept. of Commerce, Office of the Secretary
  • United States International Trade Administration
  • United States Overseas Private Investment Forum (OPIC)
  • United States Inter-American Development Bank (IDB)
  • Jamaica Ministry of Science, Technology, Energy & Mining
  • Jamaica Ministry of Industry and Commerce
  • Jamaica Ministry of Agriculture
  • Petroleum Corporation of Jamaica
  • Jamaica Trade & Investment Organization (JAMPRO)
  • Development Bank of Jamaica (DBJ)
  • Jamaica Hotel & Tourist Association (JHTA)

Outcomes

After over 12 months of active diligence across the island, meetings with supply chain, logistics, governmental leadership and other key stakeholders, the project interest unfortunately succumbed to the greater global market price decline of petroleum based oil and other relevant factors. Hence, detrimentally impacting the business case value proposition of a $60-100 MM USD Caribbean based commercial biodiesel business model.

Notwithstanding, a pivoting focus to another premium oilseed opportunity, castor oil, was birthed offering perhaps even greater Jamaican macroeconomic impact potential by coalescing the available small-holder farming community, offering a viable solution for the growing bauxite-mined brown fields and notable reserves of marginal agricultural lands across the island. All to produce commercial grade & scale castor oil, an agriculturally based product listed as a strategic commodity by the US Department of Defense and commercially presents as a premium product in any global retail environment.

Conclusion

Although the intended biodiesel project was not immediately realized due to greater international market dynamics beyond our control, it was illustrated that with meaningful interest, active collaboration and commitment, much is possible when we choose to think beyond the box! And, the footprint and foundational business case for a commercial castor oil venture was established.

This unprecedented due diligence and technical assessment initiative conveys only a caption of the level of skills set and acumen GSIO is able to offer the Jamaican and greater Caribbean community. It shall serve as just the beginning of our forging long term and new market relationships poised to offer even greater outcomes than we have already realized in our US market where we are currently supporting over $6 billion USD worth of collective projects.

We extend a very special thank you to the Govt. of Jamaica, Mr. Winston Watson of PCJ, Dr. Betsy Bandy of MSTEM, Mr. Dermon Spence of the Ministry of Agriculture, their supporting staff, colleagues and all of the other crucial stakeholders without whom, our efforts simply would not have been feasible.

At our Jamaican helm, we are especially grateful to Mr. Ricardo Durrant, Mr. Claude Duncan, Mrs. Diane Edwards and the entire JAMPRO team for their consummate level of professionalism, availability and support. Jamaica is fortunate to have such a dedicated and committed team of professionals paving the way for future inward investment and continued national growth.

To Mrs. Emily Landsburg of Blue Hill Partners, Philadelphia, PA., your renewable energy technical assistance, subject matter expertise and tremendous market relationships are first class and second to none. This assignment would not have been completed without your tireless assistance and leadership. It remains an honor and a privilege to be called your friend and colleague, we will ride again!

With all proprietary rights of research, technical data & empirical analysis and findings wholly owned by Hero BX, the Biodiesel & Castor Oil business model remains available for public or private acquisition. Please contact Glen Garth in our US or Jamaica GSI offices to discuss further.

 

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