GuySuCo forced to postpone wage, salary payments

Nov 25, 2010 News

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Grim tidings-GuySuCo’s CEO, Paul Bhim, (at right) and his deputy, Raj Singh yesterday.

– loans due, contracted cane cutters on the horizon

By Leonard Gildarie

As the country’s sugar industry continues to grapple with a week-long strike, a tight financial position may now force the entity to postpone Friday’s scheduled wages and salaries until next week.
This was confirmed by officials of the Guyana Sugar Corporation (GuySuCo), yesterday, who said that a sugar boat is expected to leave over the weekend for Europe and payments that could be partially used to cover the wages and salaries of the workers would be remitted once confirmation of the sailing has taken place.
Workers could be paid by Tuesday, the officials assured.
This latest news comes as GuySuCo is faced with a crippling strike that has drawn widespread criticisms from the government as well as several business organization in Berbice, a county that produces almost 60 per cent of Guyana’s sugar.
Yesterday, a Berbice cane farmer blamed the sugar workers’ largest union, the Guyana Agricultural and General Workers’ Union (GAWU), for the strike and demanded $25M for cane lost as a result of a strike that was called last Friday.
Yesterday, as both GuySuCo and GAWU continued to blame each other, officials of the state-owned sugar company painted a bleak picture that spoke of closure of the industry unless workers resume duties.
GuySuCo’s Chief Executive Officer, Paul Bhim, and his deputy, Raj Singh, also signaled a possibility of long term plans to possible hire contractors who would ultimately be responsible for cane cutters.
Workers’ attendance has been at an all time low this year, just over 50 per cent, and has been blamed for low production.
According to Bhim, yesterday, the reality is that for the first time in over four years, Guyana has enough cane on the ground but not enough workers.
GuySuCo has already resigned itself to the fact that the 264,000 tonnes of sugar, adjusted the target from 300,000 tonnes. This, would not be met with only four weeks remaining for the year.
Questioned yesterday whether GAWU is aware of the financial situation of GuySuCo, Bhim said that not only were presentations made to representatives during wages/salaries negotiations during the year, but the union was invited on numerous occasions to actually sit on the Board of Directors, an invitation that has not been taken up by the union.
At the moment, GuySuCo has over $3.2B overdraft at the banks with a US$8M loan to the Dutch-owned, Ing Bank. This loan has to be repaid by December 31. Creditors are owed in excess of $2.2B with $1.6B due shortly.
Already, according to Bhim, a $2B bailout requested from government and which has been committed, has already been earmarked to repay creditors and supplies.
The situation is very simply to understand, the two officials said yesterday. GuySuCo’s only source of income is from producing sugar. An ideal production level now would have been 300,000 tonnes but even 260,000 or 280,000 would have given the Corporation some breathing space.
As of yesterday, production levels were around 202,000 tonnes of sugar, and there is still an “awful long way” to go, Bhim said.
Currently, there is over 900,000 tonnes of cane, the equivalent of 55,000 tonnes of cane, still to be harvested.
Another major factor that GuySuCo now has to contend with is the rainy season which has stepped in and not allowing the semi-mechanized operations to fully kick in.
According to Singh yesterday, the Corporation has bent over backwards in every aspect and reached out to workers and the unions. He echoed earlier suggestions that GuySuCo may have to close operations and resume in the new year especially with the strike on and weather as it is.
Aside from that, Guyana stands to lose from better sugar prices promised by its European buyer, Tate and Lyle, once it falls short on supply.
Currently, GuySuCo is obligated to ship 192,000 tonnes of sugar to Tate and Lyle annually. With more canes in the field this time around, the situation is a maddening one, the GuySuCo officials noted.
The executives also pointed to another major hurdle with the CARICOM market which Guyana only recently re-entered. While last year, GuySuCo fell short and was able to persuade the authorities of the problems here, it may not be so easy this time with Guyana benefitting from tax waivers.
Should any CARICOM member state demand other suppliers, Guyana’s position would definitely be on the back foot. According to Bhim, whether GuySuCo closes or not, there are still fix costs that will arise and this amount to almost 60 per cent of average earnings.
Singh noted that while in the past there was resistance to the semi-mechanized Bell loaders, now workers are turning around and refusing to fetch the canes after cutting them. On Tuesday, GAWU stressed that workers’ purchasing power have endured a heavy beating in recent years.
Over a five-year period, the compounded inflation rate was 42.77 per cent, using 2005 as the base year, while workers received a compounded wage increase of 31.26 per cent over the same period.
“In other words, workers real wages fell by some 11.51 per cent. This year, the workers have been offered not even a black cent as pay increase, at this the eleventh month of the year.”
According to GAWU, the industry needs a life boat that can carry workers, management and the country to safety. “To salvage the current crisis, the workers must be treated with dignity and respect. The powers-that-be who cannot exonerate themselves from some of the past and present negative happenings of the industry, are in the drivers’ seat.”

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