GuySuCo bringing Indian experts to rescue industry

Dec 03, 2013 News

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-production unlikely to reach 200,000 tonnes

With poor weather further compounding its woes, the state-owned Guyana Sugar Corporation (GuySuCo) is unlikely to meet an adjusted target of 203,000 tonnes of sugar.

This bad news comes even as officials confirm that a number of consultants out of India have been hired to run the eight estates operating in Demerara and Berbice.
At least two of these consultants are scheduled to fly in this week for the Enmore estate, union officials disclosed yesterday. It is unclear what would happen to the current estate managers as GuySuCo’s senior officials remained unavailable yesterday for comments.
Last year, production plummeted to a 20-year low. It seems more than likely that that gloomy outlook would continue its downward spiral this year, eclipsing the 218,000 tonnes of 2012.
Government, with little answers to the under-performance of its US$200M flagship project at Skeldon, East Berbice, has been examining a number of measures, including hiring a number of consultants from Tate and Lyle, its largest European customer.
However, despite placing one of them, Richard Orr, at the Skeldon estate some nine months ago, there has been no reversal of fortunes. Five others are reportedly here. There have been no announcements in the press about this move and no word as to what exactly the Tate and Lyle workers are doing.
However, this newspaper has been told that the Tate and Lyle consultants have been paid US$25 per tonne of sugar and with that company contracted to buy 190,000 tonnes annually, more than US$4M would have been owed by GuySuCo for the services. GuySuCo’s Board is now contemplating ending the management contract with Tate and Lyle.
Production targets have been revised downwards from the 260,000 tonnes set at the beginning of the year to 203,000. The year’s first crop fell short of the 70,000 tonnes by an alarming 22,000.

Gloomy outlook
Yesterday, total production of the eight estates was at 179,000 and despite GuySuCo intending to run its factories until December 21, it is hardly likely that the 203,000 tonne revised target will be met, union officials said.
Kaieteur News was told that the deal has been worked out with Integrated Casetech Consultants (P) Limited, an Indian management firm to overlook the operations of the estates. Casetech is a sister company of Simbhaoli, said to be India’s largest integrated sugar refinery.
The announcement was reportedly made by Board Chairman, Dr. Rajendra Singh, to management and union officials in November.
According to a union official, the decision to hire overseas expertise without consultation is an indication of how GuySuCo’s Board of Directors has been making decisions.
“This is an industry that has been spinning out of control and has 16,000 workers depending on it. Decisions are being taken with little input and we are only told after it is a done deal. We cannot continue to run this country this way.”
At Skeldon factory, production for the year is revised to 34,000, far below the targeted 43,000 tonnes. The strain from Skeldon’s poor showing has been taking a toll on the overall operations of GuySuCo.

Skeldon
Since being commissioned in August 2009 by former President Bharrat Jagdeo, the Chinese built US$200M project, which includes the factory and expanded cultivation, has been bleeding the Corporation. Almost US$15M ($3B) has been sunk to repair several faults.
South African-based Bosch Engineering was hired earlier this year to fix some of the problems. These include issues with the co-generation power plant. However, still to be resolved are issues with the cane shredder and the punt dumper. The latter is critical to the efficient transfer of canes from punts in the waterway to the actual factory.
Bosch has been paid over US$4M for its work and after two weeks, left around mid-year.
There are no immediate indications when the shredder cane dumper will be fixed.
There are now lots of cane in the field but not enough time to harvest and process into sugar. While the factory has been built to process 250,000 tonnes per hour, its intake because of technical issues, have been limited to around 180,000, a hugely worrying factor.
A few months ago, GuySuCo, in the beginning of what seemed to be a major shakeup in management, give notice to Rajaindra Singh, the Deputy CEO, of its intentions to cut his contract short. Singh left in October.
Current Chairman, Dr. Singh, was reportedly set to take up the appointment as the new CEO last Friday, November 1st. However, there have been no movements as yet.
The industry, at one time the biggest earner for Government, has become a major headache for them. Saddled with a phased price cut by Europe, its biggest buyer, GuySuCo has been battling labour shortages as well as poor weather conditions.
A $2B investment, using Europe’s cash that was designed to help the sugar dependent countries recover the price cuts, into a packaging plant at Enmore, has failed to change the situation. The reason was simple – there were just not enough canes to meet the 190,000 tonnes quota that Europe wants. That story has been repeating itself in recent years.
This year, as part of assistance to help the ailing industry, Government earmarked $1B for GuySuCo. This was $4B less than last year.

 

 

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