Insufficient cane caused Skeldon factory shortfall

Dec 28, 2011 News

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–    Agri Minister Ramsammy

In a matter of days, government is expected to announce a new-look Chairman and Board of Directors for

the country’s state-owned Guyana Sugar Corporation (GuySuCo).
Newly sworn-in Minister of Agriculture, Dr. Leslie Ramsammy, during a recent interview with Kaieteur News on the new administration’s plans for the industry, was upbeat over the future of sugar in Guyana.
A new board was necessitated by the fact that Donald Ramotar, a former Board member, is now the President of Guyana and Dr. Nanda Gopaul, its Chairman, the new Minister of Labour.
GuySuCo has announced that the 2011 sugar target has been further revised to 240,000 tonnes. At the beginning of the year, the industry had tagged an ambitious 300,000 tonnes. This was later revised down to 282,000 tonnes before the figures were adjusted again.
With over US$200M invested in a new factory at Skeldon and a packaging plant at Enmore in recent times, the microscope has been on the industry, which employs over 17,000 persons.
The Minister, while unhappy over the 240,000 tonnes, however, pointed out that it was better the 220,000 tonnes achieved last year and believed that at times there may have been unfair criticisms for the industry.
LOW YIELDS
With sugar in the ‘90s dropping to 119,000 tonnes, the former Health Minister also believes that the 240,000 tonnes is heartening.
While weather, labour shortages and strikes have all been blamed for the industry failing to meet targets in recent years, these were not the main reasons for falling below expectations.
Rather, it was the low yields from the canes which ultimately to lower production.
GuySuCo has been working with what it called a “turnaround” plan to boost production and diversify from just producing bulk sugar.
“This year, neither the weather nor labour can be used as a buffer to explain away the problems. In terms of the plan, GuySuCo is on the right trajectory…it may not be on target…but on the right path.”
The new Agriculture Minister is immediately hoping to put plans into motion to ramp up harvesting from the current 50 tonnes of cane per hectare to around 75. This is on par with the turnaround plan which has set 2015 for the industry to achieve those targets.

The most pressing problem for GuySuCo currently is not on the production side, but rather in the agriculture department.
According to Ramsammy, the plan is have new cane in the 43,000-plus hectares every five years. GuySuCo is now moving to incrementally achieve this by 20% replanting every year until that target is achieved.
The Minister warned that he will not tolerate slackness in the industry.
“I don’t expect any post mortem monitoring at year-end. We will be working together…GuySuCo and the Ministry…to ensure timely reports every week. I do not believe that expected targets or processes are too overwhelming or too ambitious.”
For the sugar industry to take its production to a desired 400,000 tonnes of sugar by the targeted 2015, it will have to plant in excess of 4.5 million tonnes of cane.
For it to be profitable, the industry has to produce over 260,000 tonnes of sugar, an amount that the new minister is hoping to achieve in 2012.
PROFITABLE
“If you are producing 260,000 tonnes of sugar and it is profitable; and can make it to 450,000 tonnes, it will be an enormously profitable industry.”
Regarding the new Skeldon factory which has been heavily criticized since being placed into operations, Ramsammy, while admitting that it is still not operating according to plans, opines that its below-expectation performance during this year has more to do with the fact that there was not enough cane to feed the facilities.
That factory has a capacity of 110,000 tonnes of sugar annually but this target, according to the Corporation’s turnaround plans, is set to be achieved by 2015.
“The problem there is more one of agriculture.”
It is the plan also to increase the present 43,000 hectares of cane land to 50,000 by 2015 and have private cane farmers contribute about 15% of the cane. Currently, private cane farmers are supplying GuySuCo’s factories countrywide around 7-8% of the cane.
Next year, Ramsammy disclosed, GuySuCo will be introducing a new line of packaged sugar – a value-added product that is bringing around 30% more on prices over the bulk sugar currently being produced.
With a new packaging plant built at Enmore, it is the hope that that facility will produce at its capacity of 40,000 tonnes of sugar by the end of 2012.
However, Ramsammy cautioned that Guyana will have to produce more cane for the factory since it has to find 195,000 tonnes of sugar for its European market and another 12.5 tonnes for the US market.
The plan is to eventually sell the packaged Demerara Gold sugar to the Caribbean market, capturing it.
The Minister, in lauding the managers and workers of GuySuCo, also noted that it is a plus that Guyana is recognized internationally for its sugar – achieving international standards and not suffering by having it returned for quality.
Regarding union relations, the Minister repeated the call for a union representative to sit on GuySuCo’s Board.

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