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GuySuCo unable to supply sugar to CARICOM markets

Feb 23, 2012 News

 

…contemplated importation to meet shortfall

By Leonard Gildarie

Strikes at a number of estates over the past week have left the state-owned Guyana Sugar Corporation (GuySuCo) short of the natural sweetener to deliver to markets in Caricom.
The Corporation also said yesterday it contemplated importing sugar but dismissed this option, as any shipment will arrive after the situation will have normalised.
Although GuySuCo did not immediately say yesterday whether there was a shortage of sugar on the local market, already a number of shopkeepers are being asked to pay more.
According to GuySuCo, the problem was exacerbated by strikes at the Blairmont, West Berbice packaging plant and poor weather at the Enmore Estate, East Coast Demerara.
The announcement will spell more bleak news for one of the country’s biggest foreign exchange earners and employers.
“The current industrial climate prevailing at the premier bagging and packaging location at Blairmont has delayed the Corporation’s ability to meet marketing commitments to sister CARICOM states,” the Corporation said yesterday.
The start of grinding at Enmore Estate has also been delayed due to the “erratic weather conditions” faced over the past five weeks. The Enmore packaging facility was commissioned early last year and it was the plan to boost cane production to meet the 40,000 tonnes bagging capacity there.
Yesterday, the entity called for patience.
“As GuySuCo anxiously awaits the start of operations, the Corporation is cognisant of the effect this delay has on shipments to customers regionally, internationally and locally, and is appealing for your patience and understanding.”
Regarding considerations to import sugar from out of the region to meet the local market and other requirements, the Corporation said that the current situation would normalise before six weeks, the time it would take to ship sugar to Guyana.
“Careful consideration was also given to suggestions to import extra-regional sugar, but transit time from the nearest sources in Central America is no less than six weeks and by that time, GuySuCo will be in a position to deliver on our commitments.”
The regional market is an extremely lucrative one for Guyana, with GuySuCo targeting an initial 10,000 tonnes annually in packaged sugar.
Guyana has a 190,000 tonnes quota it has to fulfill annually with Europe, but that is for bulk. Premium or packaged sugar is sold for much more.
Over the past days, workers at Blairmont took strike action claiming that management was too dictatorial. Workers at other estates took similar action for production incentives which they say GuySuCo owes them.
The Ministry has since assembled a team to investigate the complaints of the Blairmont workers.
On Tuesday, GuySuCo revealed that it is finding major difficulty in obtaining short-term financing and that it owes $8B in short-term debt.
The Corporation said that it is unable to get working capital from a foreign bank, affecting the payment of Annual Production Incentives (API) to workers, which is the main reason for the recent strikes.
Moreover, the corporation is lagging way behind in its payments to creditors, which amounts to $3.2B. Local banks are owed $4.1B and advances from customers total around $700M.
“This is a significant amount owing and the Corporation is finding it very difficult to source additional short-term financing to meet its working capital requirements,” GuySuCo said in a statement.
The financial state of the company could only be reversed with increased sugar production and the sale of sugar. This option also appears problematic since sugar production for the year is way below expectation. The corporation did not say how far below expectations the production was.

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