Let us keep the focus on GuySuCo

Mar 07, 2010 Letters

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Dear Editor,
I thank Mr. Mahendra Roopnarine, the PRO of GuySuCo for responding in the independent newspaper to my original letter captioned, GuySuCo required skilled strategist…..).
He asked two questions that have minimal relevance to the state of GuySuCo which appears to only serve as diversion tactics at this point in time.
Do these questions help GuySuCo? No. However, I have chosen to answer them to clearly debunk this misconception being peddled around that the weather is the principle cause for the current state that GuySuCo finds itself in. Using a paraphrase of Bill Clinton’s famous remarks, it is management, stu…… I remain convinced in my conviction that it is not only the weather and thus any attempt to trivialize the weakness in GuySuCo’s production chain and management must be exposed and resisted since it seems in their mental make up, no one is willing to take responsibility for the state of this industry with the weather being the fall guy and this is furthest from the truth.
The question asked by Mr. Roopnarine:
What was the primary cause of the shortfall for sugar on the world market in 2009 which continues into 2010? Why it is that in just one monsoon period the second largest sugar producer in the world, that is India, went from a net exporter to a net importer of the commodity?
The answer:
In December 2008, the world sugar prices reach c10 US cents per pound (see chart below). The price for most of 2008 was averaging around 15 US cents a pound on the world market. However, most of the sugar traded globally benefited from preferential prices which were all coming down – our case EU prices. Such an obnoxious price for such a valuable commodity created the stimulus for hard investments to flee this industry globally.
New capital expenditures in new factories were reduced, development of new fields and re-development of old fields were moderated, and most importantly as a result of the decrease in the prices, corners were cut especially in India. Now cutting fat and cutting corners are two different kettles of fish.
Cutting fat means weeding out non-value added cost out of the production chain, cutting corners means cutting some value added cost like delaying the servicing of your factory and your machinery.
A lot of cutting corners were done globally especially in India. GuySuCo was also a culprit of cutting corners rather than cutting fat.
When the weather became averse in 2009, the global sugar industry did not have enough cane in the ground or factory efficiency to maintain sugar production.
India has a billion plus people and with just a 5% decline in their production; they can easily convert from a net exporter to a net importer.
With not enough cane in the ground in the first place and a greater number of inefficient factories, the adverse weather just helped an already bad situation. Mr. Roopnarine, can you tell us how much it cost us to restart the old Skeldon factory after it was partially mothballed as a result of poor management advice?
So Mr. Roopnarine your letter was a clear case of you not spending enough time interrogating the management about what is happening to turn GuySuCo around and sharing that information with the public.
All and sundry talks about this turn around plan but was the relevant stakeholders consulted on this plan – labour unions, private sector commission, principle suppliers, etc.
Most importantly, were the religious leaders on the estate briefed on this turnaround plan so that they can motivate the workers to give a 100% towards this plan?
The reality is that the workers do not trust the management in GuySuCo and efforts must be made to repair this relationship on a foundation of trust, and respect for each other.
In strategic management, the most difficult test is to honestly understand the factors that contributed to your success and failure. Does GuySuCo clearly understand why it is where it is today?
I highlighted one in my previous letter – not enough of the right skills at the board and management levels with a clear example – Ms Knights being a non-valued added cost to the organisation.
Have they acknowledged this and are they doing something about it? Has GuySuCo done an independent and honest business review of the business where the systems are tested from start to finish identifying value added and non value added activities?
This exercise will allow management to weed out non-value added activities and ensure the value added activities are preserved in their most cost efficient manner.
The public is entitled to this information in a broad manner and hence the secrecy behind this turnaround plan leave one to wonder, will it work, does it address the fundamental issues in the industry? Where is the transparency?
In conclusion, my innermost desire is to wish GuySuCo well. I am one of the strongest advocate in favour of men of steel like Dr Gopaul and Mr. Borrowes, but they must not be the minority in the decision making process, they must be the majority in order for GuySuCo to turn around.
My vested interest is to see GuySuCo succeed since it is one of the main employers of the working class and the preservation of their jobs is my cup of tea.
However, what I cannot agree with is that the workers are being made the sacrificial lamb in the industry when management in the first place contributed to this mess and there seems to be minimal attempt to hold them accountable.
The workers got a miserly 3% salary increase in a difficult year but there is still fat to cut elsewhere in the industry.
Clear case, why not divest all the company houses in the Demerara Estates and help the relevant manager to access loans from NBS to buy their own houses?
This will save the industry million in maintenance cost and generate valuable revenue. In a previous letter, I highlighted some other areas for improvement in cost, so there is no need to go into that again. So Mr. Roopnarine, rather than focus on India, let us keep the focus on GuySuCo.
Sasenarine Singh

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