GuySuCo to sweeten sugar factories with $3.1B this year

Mar 29, 2013 News

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Despite questions over the viability of the sugar sector as labour shortages and weather, coupled with mechanical and agricultural problems continue to take the sweetness out of the operations, government has vowed to continue spending. This year, it has allocated $1B for the Guyana Sugar Corporation (GuySuCo).

The state-owned company is now set to spend $3.1B in a factory improvement programme with a focus to determine the right balance of mechanisation, field conversion, drainage and irrigation, transport infrastructure and plant breeding.
“The factory improvement programme will aim at producing sugar to meet the growing market requirements for higher quality, both in bulk and direct consumption with increased efficiencies at all seven factories. A specific element of the plan will be to have the new packaging plant at Enmore operating at full capacity,” Finance Minister Dr. Ashni Singh said during his presentation of the 2013 National Budget to the National Assembly on Monday.
Singh made it clear that Government’s position on the sugar industry is “clear and unequivocal”.
“The industry is still of sufficient systemic importance to the national economy and to the livelihoods of so many rural communities and has such deep forward and backward linkages with suppliers and distributors nationwide, that no effort must be spared to ensure its long term viability, competitiveness, and profitability.”
Over the years, Government has injected a total of $39.5B to recapitalise the industry and to support its operations. Last year, Government provided a transfer of $4B as GuySuCo fell short of meeting its financial loans and other commitments.
The sugar industry, at one time the country’s biggest foreign exchange earner, has fallen behind gold and rice. Scores of workers have drifted to the lucrative gold and construction sectors as conditions grew tough at GuySuCo.
Last year, the industry’s production fell to an all-time low under this government to just over 218,000 tonnes of sugar.

Targeted
According to Minister Singh, “GuySuCo has recognised the challenges of returning to its production potential and profitability – it has now to confront its managerial, industrial, technical, marketing and financial realities”.
“Thus, an updated Strategic Plan 2013-2016 is currently being prepared. The plan will support the mechanisation and field conversion drive and focus particularly on critical areas.”
While GuySuCo has been claiming over 17,000 employees countrywide, industry experts say that reality is far less and labour shortage will continue to bother sugar.

The Finance Minister believes that “industry customs and practices” of the past must now give way to modern, innovative and creative tools and techniques to deal with managing a complex organisation in the process of change.
The manner in which labour problems were handled in the past will also have to change.
“GuySuCo will have to reengineer its management and human relations functions accordingly. Promoting a harmonious industrial relations climate is considered an absolute priority and will require accommodation on all sides.”
Singh admitted that GuySuCo continues to battle weather and labour with cane lands under the corporation capable of producing in excess of 400,000 tonnes of sugar.
“Field interventions to address the weather and labour constraints can only be successful with the requisite agronomic inputs. Agricultural operations must capitalise on the relative advantages of each estate, ensure daily field supervision and return the fields to the former levels of productivity.”

Looking good
The Finance Minister was upbeat about the future of sugar given Guyana’s comparative advantage as a producer within CARICOM, the existence of a captive market protected by the Common External Tariff, continued market access with the recent extension of the EU Sugar Regime to 2020, and the fact that Demerara remains a “marquee with considerable universal goodwill, even if not yet legally enforceable”.
He pointed out that over the last few years, initiatives in field and factory operations have been undertaken to counter the labour shortages and the reduced opportunity days arising from changing rainfall patterns.
“Mechanical harvesting has been accelerated and there are ongoing investments in drainage works and land conversion to mechanically friendly fields. Private cane farmers have been encouraged to take on a greater share in supply of canes to supplement GuySuCo’s production.” Meanwhile, regarding the US$200M Skeldon Modernisation project (which continues to be plagued with mechanical and other issues) falling short of expectations, Singh said these are being addressed “holistically and several modifications and adjustments have been completed to deliver higher levels of output and efficiencies”.

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