Kingston, July 2- Jamaica's government will retain a 25 percent stake in five state-owned sugar factories that are being sold to a Brazilian firm, the agriculture minister said.
Agriculture Minister Christopher Tufton told parliament late on Tuesday that Brazilian company Infinity Bio-Energy Ltd would take the remaining 75 percent stake in the loss-making factories following the signing of a deal last week.
The new venture will be called Newco Ltd and it will lease sugar fields for a minimum of 50 years, he said.
In addition to the production of sugar for export, Newco will take control of an ethanol dehydration plant now operated by the state-owned Petroleum Corp of Jamaica and a power plant to produce its own electricity. Excess electricity produced will be sold to the national grid.
Ethanol will be produced under the deal, the minister said.
The Brazilian company will take control of the factories in October. Tufton did not disclose the sale price.
The sugar factories being sold are Frome and Long Pond in the west, Monymusk and Bernard Lodge in the central region, and Duckenfield in the east.
The factories have accumulated losses of a quarter of a billion dollars over the last 25 years and the government said that it could not continue to subsidize them.
Once a major sugar power, Jamaica now earns more from bauxite and alumina sales, remittances and tourism.
Jamaica produced 162,000 tonnes of sugar in the last harvest, falling 5,000 tonnes short of its production target.
The latest official forecast for the 2007/08 harvest is for 160,000 tonnes of sugar.
Tufton told parliament that 13,700 workers would lose their jobs at the state-run sugar plants after the sale, but would receive redundancy payments. The cost to the government of the redundancy payments would be around $34 million.
Many of the workers could expect to be hired back by Newco, Tufton said.