Document suggests Bahamian aragonite operator has interest in U.S. company he sells to
By CANDIA DAMES
The Nassau Guardian
Nassau, The Bahamas
Is the owner of the company harvesting aragonite at Ocean Cay in The Bahamas also an investor in a company in the United States buying aragonite from Ocean Cay?
If the answer to this question is yes, it would mean the same people selling aragonite from our waters are selling the mineral to themselves in the United States, and this would have huge implications.
If the answer is yes, we wonder what impact this relationship is having on how aragonite is priced out of The Bahamas.
This question has emerged out of a National Review investigation into the aragonite industry and whether The Bahamas government is getting fair royalties.
This angle is one we could not ignore as we present fair reporting on what is now a national controversy.
The question was raised as a result of the discovery of a presentation available on the website plasticsindustry.org.
The presentation was made by the principals of U.S. Aragonite Enterprises, an American company, and Sandy Cay Development Company, a Bahamian firm, according to the website.
Sandy Cay has a lease with the Bahamas government to operate an aragonite facility at Ocean Cay, a 95-acre site, located nine miles south of Cat Cay, 27 miles south of Bimini and 65 miles east of Miami.
The online document states that U.S. Aragonite is the exclusive supplier of oolitic aragonite to the plastics industry.
It adds that the company was founded in 2011 and that “investors include owners of Ocean Cay, the natural source of the mineral”.
We knew from our previous interview with Sandy Cay Development Company President Tony Myers that U.S. Aragonite is one of his customers. But could it also be a company he is an investor in?
We contacted Myers with our latest questions.
When we read that line from the presentation to him, Myers said he is not an investor in U.S. Aragonite, but added that he had been in talks with U.S. Aragonite over buying a 25-percent stake in the company.
He also confirmed that he has sold to U.S. Aragonite, but said it was only one shipment, which he said he sold at $50 per metric ton.
Over the weekend, Myers showed us the invoice for this sale. According to that invoice, Sandy Cay sold US Aragonite 11,023 tons of aragonite from Ocean Cay on July 10, 2012.
Myers previously told us that his company has only sold 16 shipments of aragonite since it bought the lease in 2009 and formally began operations in 2010.
He said his shipments sold for between $12 and $20 per metric ton.
Myers showed us invoices for those shipments. The sale to U.S. Aragonite was the highest priced.
Under the 25-year lease Sandy Cay signed with the government on April 20, 2012, the government gets $2 per metric ton.
Myers previously told National Review that Sandy Cay has shipped 106,855.69 metric tons of aragonite since 2010 to various companies.
The government of The Bahamas has received $213,000 in royalties, according to a document he showed us.
Myers told us he has not yet made a profit from the Ocean Cay operation, five years after purchasing the old lease, and four years after starting aragonite exports.
When told that the U.S. company he sold to is naming his company as an investor, Myers said, “I didn’t know they did that. Technically, they should not have done it.”
He said that claim is not accurate.
But the claim is contained in the presentation on the plastics industry website that carries the names of both Myers and Marc Goldenberg, president of U.S. Aragonite.
We then contacted Goldenberg to ask if Sandy Cay is an investor.
He promised to get back to us with the answer to that question as he said he needed to check something.
Goldenberg soon contacted us back and advised that Sandy Cay is not an investor.
When questioned, he confirmed that there had been discussions with Myers to become an owner in the U.S. company, which lists its address as Salem, Massachusetts.
“We have talked about it,” Goldenberg said.
“But Sandy Cay, or Ocean Cay, isn’t an investor. At the very beginning, we were talking about that down the road, but things have not worked out.”
The online presentation that lists Sandy Cay as an investor in U.S. Aragonite is titled “Goldenberg Myers Oshenite SPI presentation”.
An agenda from the plastics conference last May in Nashville, Tennessee, lists Myers and Goldenberg as speakers on a panel titled “Bioplastics in Flexible Film”.
We found it curious that this presentation, which states Sandy Cay is an investor in U.S. Aragonite, had both the names of the Sandy Cay and U.S. Aragonite principals attached.
Goldenberg said he was not familiar with this and did not know why their names were listed together.
He confirmed that Sandy Cay is a supplier of aragonite from Ocean Cay to his company.
While Myers told us his company has only ever sold one shipment to the U.S. company, Goldenberg said Sandy Cay is “our only supplier”.
Myers said that shipment at $50 per metric ton is “the highest we’ve sold yet and every other invoice has been to non-related third parties”.
Pressed further on the matter of a reported investment relationship with the U.S. company he has sold aragonite to, Myers said, “Technically, we’re not an investor in it. Sandy Cay holds no stock in that company”.
He said the original presentation document put into the public domain by plasticsindustry.org was prepared by Sandy Cay.
According to Myers, U.S Aragonite “inserted” the additional pages, including the one that claims Sandy Cay is an investor in U.S. Aragonite.
Myers provided National Review with the presentation, minus those additional pages, when we first met with him more than a week ago.
On Friday, he acknowledged that Sandy Cay has a close association with U.S. Aragonite.
Myers noted that an investment in U.S. Aragonite would have required special approvals from The Bahamas government.
But he said the investment arrangement was never solidified as neither U.S. Aragonite nor Sandy Cay was doing well in the business.
Myers added, “It is the only customer that has not paid us. They lost so much money in trying to resell it into the plastics market. We’re not profiting by it and we’re not doing anything wrong because we don’t formally own anything in the company (US Aragonite).”
He also told National Review that Sandy Cay was only seeking that minority 25 percent interest.
“Why would I give them any preferential treatment when I would have only owned 25 percent?” Myers asked.
Referring to the statement that his company is an investor in U.S. Aragonite, Myers said, “They made that statement to try and strengthen their ties to our company, so that they can be seen as stronger.”
Goldenberg also told us U.S. Aragonite is not performing robustly.
He said it sells aragonite it gets from Ocean Cay after it works with another company to process the product.
“We sell it to the customers who would use it in certain applications,” Goldenberg said.
Myers has told us that aragonite is not refined at Ocean Cay.
Goldenberg explained that, “Raw material is useless in most applications. You can’t take the raw material and put it into plastic. You have to refine it.”
According to the presentation on plasticsindustry.org, U.S. Aragonite holds 50 percent ownership in Oshenite Performance Processing, a dedicated aragonite grinding facility.
U.S. Aragonite’s website notes that Oshenite oolitic aragonite is created naturally in the shallow waters of The Bahamas.
The website says, “Its genesis stems from an organic cycle of precipitation scientifically known as whitings, which yields a continuously renewing supply of an ultra 97-99 percent pure mineral; 20 million tons per year! It is pure from the ocean!”
Myers is also listed as the principal of another company, Ocean Cay Aragonite LLC, based in Boca Raton, Florida.
According to an online search, it was founded in 2011 and is privately held.
When we asked Myers about this company, he said, “I am a principal in it, but I’m not a shareholder.”
He said the company was set up, but never really used.
“We should have liquidated it and gotten rid of it,” he told National Review.
“We never sold anything to them. We never transferred any goods to that company, ever.”
A telephone number attached to the company online led us to a Jayson Meyers, who is listed under the rubric “officers and directors”.
Meyers said he and Tony Myers are not related, and noted that their names are spelt differently.
Meyers, whose address is listed as North Palm Beach Florida, said he is a “management consultant” for Sandy Cay.
He said he makes sure that the materials needed to operate at Ocean Cay are coordinated.
Asked whether Ocean Cay Aragonite sells aragonite, Meyers said, “It was set up to sell aragonite in the U.S. At one point it was conceived to do so.”
But he said it does not sell aragonite.
These matters have added another element to the aragonite debate that continues to rage.
Tony Myers has strongly rejected suggestions that his company is discounting its prices at Ocean Cay and benefitting from selling at a higher rate once the product gets in the United States.
We make no claim that he is indeed doing so, but report only on the trail our investigation followed.
As we opined in this space last week, it is important to get the facts out — without the hysteria.
The questions surrounding ties between Sandy Cay Development Company and U.S. companies are legitimate.
Getting the answers is important for full disclosure.
We admit there is something unsettling about the documents that are easily available through online searches.
The explanations given by Myers and Goldenberg do not fully line up.
It is also odd that the files Myers showed us reflect just one invoice for a shipment to U.S. Aragonite, when Goldenberg, the president of U.S. Aragonite, claimed Sandy Cay is his only supplier of aragonite.
While there has been a whole lot of misinformation spewed on this issue in recent weeks, the controversy has led us in an interesting direction.
There are more questions, and understandably, many Bahamians are demanding answers.
Minister of the Environment Kenred Dorsett assured on Friday that all matters connected to aragonite in The Bahamas, including Sandy Cay’s pricing structure, are being thoroughly reviewed.
We await the outcome.
May 19, 2014