Priority: Saving the Sugarcane Industry

Dec 25, 2011 Features / Columnists, Ravi Dev

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(The politicians are prioritising their concerns for next year. We resubmit the following on sugar, reminding them that the sugarcane industry is still our largest investment and must be given top priority. For those that are still whingeing about the Skeldon Expansion, we remind them that the genesis of the industry’s fall was the imposition of the vampire levy in 1974 that sucked investment in the industry dry.)
There was a Strategic Plan for the Sugar Industry unveiled in 1998. It was revised several times in the intervening decade – primarily to deal with the changing global environment for sugar. From the onset, there was an unequivocal declaration that the experiment to diversify the industry into “other crops”, as was attempted by the previous administration in the 1980s, was not going to be replicated.
The lands for sugar, as a matter of fact, were going to be increased in Berbice and there was going to be a diversification, within the industry: co-generation of electricity from bagasse for sale to the national grid, alcohol production from a new distillery and a refinery for producing white sugar. There was going to be the packaging of some sugar for the retail trade – initially at Blairmont – which could increase its value immensely. Most recently we heard of the possible production of Ethanol.
Further, the decision by the administration to locate the packaging plant for retail sugar at Enmore (using EU funds) appears to “put their money where their mouth was”. From this perspective, the strategy for the industry appears very sound and the focus has to be on its execution. If the Geographical Indications certification for the “Demerara Sugar” brand is obtained, the Demerara high costs could be covered.
We believe that those plantations can be made viable within a regime that more clearly articulates the de facto change in strategy from a sugar industry to a sugarcane industry. The change is more than semantic. At the most mundane level it stresses the fact that all the end products – sugar (bulk and packaged; raw and refined), electricity, alcohol, ethanol – depend on sugar cane being supplied and therefore its production must be given the central role in any future strategy.
For instance, in the Skeldon Sugar Modernization Project (SSMP), the impression was given that in the US$180 million investment, somehow the factory alone was going to save the industry. Even though there is a hiccup with the factory, this is temporary, but the factory’s cost will only be justified if we produce the requisite sugarcane at the lowest cost. Each ensuing product from the sugar cane can then be applied towards the over cost of its production – not just sugar.
In addition to the above-mentioned product mix from sugar cane, we suggest that the production of biogas be made standard at all sugar factories – including the ones in Demerara. Molasses and bagasse are not the only waste products in the production of sugar from sugarcane – the wash and press-mud are extremely rich in methane or bio-gas – which can be extracted and bottled for commercial sale or for providing fuel to the fleet of vehicles used in the sugar cane cultivation. The vehicles would have to be slightly modified.
DDL’s experiment with bio-gas production should be examined. This technology is not an insignificant one and it forms the basis of Europe’s strategy to reduce its dependence on gas from Russia. There would be a huge savings for our sugarcane operations, resulting in a drop in unit costs.
The generation of electricity from bagasse ought to be seen not simply as a subsidiary operation from the production of sugar, but as an economic enterprise on its own merits. Mauritius embarked on this road since the mid-eighties and ten out of its present factories have co-generation capabilities that, by 2004, exported 240MW of electricity to the national grid: this is about equal to our entire generating capacity (226MW). There are plans to further consolidate their factory operations and increase the quantity of co-generated electricity for export.
For the Demerara plantations, the co-generation potential would be augmented if the present four factories in East and West Demerara were consolidated into two – one in each sector. (LBI was closed in 2010) This would only make redundant some of the factory workers who could be employed in the co-generation plants and other plants that will be proposed.
If the power generation is evaluated from its own capabilities, some of the Type III lands in Demerara that give such poor yields for sugar cane could be converted into fuel cane that are hardier, but generate more fibre, and thus more energy in power generation. Unlike the sugar cane, the fuel cane can also be harvested in sub-optimum weather since sunlight to maximise sucrose content is not a factor: the number of available days in the wetter Demerara Plantations could then be increased, lowering unit costs.

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