US$12M packaging plant will be operational by November – GuySuCo

Aug 31, 2010 News

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– Corporation saves $1B on new procurement measures

By Leonard Gildarie

A US$12M ($2.4B) state-of-the-art sugar packaging plant is expected to operational by November, with a modified Enmore factory gearing to supply the required quality as early as the first crop of next year.
This was disclosed yesterday as government officials and management of the Guyana Sugar Corporation (GuySuCo) toured the facility, which is said to be almost 75% completed.
Already, the pre-fabricated building has gone up, with key pieces of the packaging equipment on site, being readied for assembling.
When completed, the turn-key packaging facility being constructed by India-based Surendra Engineering Company Limited, will be bagging table-ready sugar in half kilogram, one kilogram, five kilogram, 10 kilogram and one tonne quantities, and will be able to take off the 40,000 tonnes currently produced by the Enmore Sugar Factory.
According to Minister of Agriculture, Robert Persaud, the project is key to introducing the value-added sector to the sugar industry, with higher prices being offered.
Blairmont supply
In the beginning, to meet supply needs, the plant will be taking sugar from the Blairmont estate, as it is the only facility designed to meet the required quality. However, by the first crop in 2011, the Enmore factory will be upgraded fully, as part of the developmental plan, to meet the supply demands, the Minister assured.
The modification works on that factory are facing delays because of current grinding operations, it was said.
With Guyana’s largest market, the European Union, assisting in the financing of the facility, government and GuySuCo are both keeping a keen eye on the speedy delivery of the plant.
According to Persaud, the timely delivery of the packaging plant takes on heightened significance, especially when taking into account the fact that Guyana lost $10B in revenues from the 36% price cut from EU, with the situation further worsened by a fluctuating Euro currency.
Although the facility can process up to 40,000 tonnes of sugar annually, it has the potential to go up to 80,000 tonnes, Persaud disclosed.
Already, in the East Demerara estates, new lands are being opened up.
Also touring the site yesterday were GuySuCo’s Chairman, Dr. Nanda Gopaul, Chief Executive Officer (ag), Paul Bhim and Director, Geeta Singh-Knight, along with officials of the Enmore Estate and representatives of the contractor, Surendra Engineering.
Training
The Minister explained that with the plant being a modern, automated one, staff would have to be overseas trained, with technical experts brought in to increase skills capacity.
The facility will move Guyana right out from the 1930’s era of sugar production to a futuristic company that has to rethink its training needs, he stressed.
Fielding questions on the multi-million-dollar Skeldon factory, Minister Persaud noted that it is the plan to establish a refinery there, with the logistics of moving sugar from that facility to Enmore not being feasible.
Regarding the viability of the industry and promise that it would have been making profits by 2011-2012, the Minister made reference to the fact that the industry moved from a $6B loss in 2008 to making an operational profit last year, a clear commitment that the industry is moving forward.
Additionally, a recent $4B sale of East Bank Demerara land to government for housing schemes with the monies going to the Corporation’s capital works, is also a clear indication of the growing confidence in the industry, Persaud pointed out.
Procurement improvements
On the same note, the official argued that few companies in the world can survive an almost 50% price cut – the like that GuySuCo suffered.
Meanwhile, on the question of the high cost of production plaguing the industry, it was disclosed that the Corporation has managed to save up to $1B so far for this year, with widespread improvements to its procurement policy and the way cultivation and harvesting is done.
However, the Minister admitted that the plans to change GuySuCo’s fortunes overnight just will not happen, it will be a long haul.
In the area of labour, he acknowledged that it is a problem for the entire industry with the required level of employees not turning up at the required time. As a matter of fact, the unions have been asking for some level of mechanization.
In January, GuySuCo had said that the packaging plant could see Guyana earning 50 per cent more in sales.
It is expected to see the employment of 20-odd persons to oversee production, packaging and transportation.
GuySuCo had said that it intends to tap into CARICOM markets by capturing 10,000 tonnes in demands there for packaged sugar. The US market is on hold following an ongoing court case over the Demerara Gold trademark.
Private cane farmers were said to be upping production targets by over 70 per cent.
The $2.6B contract for the packaging plant was signed between the GuySuCo and Surendra Engineering Co. Ltd last year June, to construct the plant and among other things, see the upgrade of the factory at Enmore.
This initiative by the government under a venture called “Project Gold” is the first sugar project under the Guyana National Action Plan (GNAP). Since the submission of the GNAP in 2006, and establishment of Financing Agreements between the Government of Guyana and the European Union (EU), funding in the form of fixed and variable tranches have been received for budget support.
Release of funds is contingent on Guyana’s compliance to an annual set of indicators in both the sugar sector and the macro-economy.
“Project Gold” is divided into six sections, including the sugar factory process, design and upgrade, civil works design, civil works construction, design, supply and installation of sugar warehouse, sugar packaging machinery and sugar processing equipment.

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