GuySuCo mulls closure of LBI due to strike

Aug 15, 2008 News

The Guyana Sugar Corporation (GuySuCo) is considering closing its La Bonne Intention (LBI) factory due to severe financial loss.
Yesterday, Chief Executive Officer (ag), Paul Bhim, told the media that should these ‘wildcat’ strikes continue, then management will be forced to re-look at whether it can continue to sustain eight operating factories.
During a press conference at Herdmanston House, Lamaha and Peter Rose Streets, yesterday, Bhim told the media that strikes are hampering the corporation’s plans to improve its production.
For the past three years the sugar company has been producing below its average output.
Bhim pointed out that the company has had problems at its Uitvlugt and Wales Estates.
He added that similar problems are being experienced at LBI, and that the company is trying to resolve these.
On Sunday, Bhim told the media that a strategy was devised to assist in solving the problems being experienced at LBI estate. The recent strike, he said, has now compounded those problems.
As such the company is critically assessing the performance of LBI location and may have to recommend that grinding both LBI and Enmore canes be done at the Enmore factory. He said that he is hoping that there is full resumption of work by all employees to avoid canes from both estates having to be ground at Enmore factory.
The strikes, he added, are also hampering the efforts by the company to improve on its financial position particularly after the funding, which was required from its own cash flows, for the new Skeleton factory.
Soured wage negotiations between the company and the Guyana Agriculture and General Workers’ Union (GAWU) resulted in workers taking a standoff on Wednesday and yesterday.
GuySuCo stated that about 90 percent of the field and factory workers at the LBI, Enmore and Wales Estates, and 85 percent of those at Rose Hall did not turn up for work.
The Corporation and GAWU met for the eighth time on Tuesday but failed to reach any agreements.
At the conclusion of the meeting, the corporation’s position was to pay an increase of four and a half percent but the union’s demand was 14¾ percent.
The corporation is in a serious predicament over the huge impact of the EU-imposed price cut, and the high costs associated with fuel, freight and fertilisers. GuySuCo is contractually obligated to supply its main European customer with 55,000 tonnes of sugar by September 5.
Failing to meet this obligation, the corporation would lose US$70 per tonne of sugar not supplied by the date to the particular market. To date, the corporation has shipped 16,400 of the 55,000 tonnes.
This year, GuySuCo stands to lose close to $1.2B in revenue due to the price cut.
A World Bank commission study had sighted the closure of some estates because of the high cost to run the operations.
Demerara and Enmore estates are the weaker of the operations.

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GuySuCo mulls closure of LBI due to strike

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