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The sugar company could perpetually remain a burden on the taxpayers of this country
DEAR EDITOR,
Your article captioned “Old sugar factories use 12 tonnes cane to produce 1 tonne sugar, while US$200M new Skeldon plant, uses 26 tonnes cane for 1 tonne sugar” carried in your January 1 edition was very informative, and for which commendation is rightfully yours.
For the sugar company to commend itself for achieving a meagre production of 216,000 against a revised target of 219,000 that was promised to the Parliamentary Sectoral Committee deserves condemnation, when one considers not only the non-achievement of the revised target during a period of excellent harvesting condition as pointed out in an earlier article by Anthony Vieira, but the cost to produce the 216,000 tonnes sugar.
The cost of production on the 216,000 tonnes as quoted by your article is US$0.35 per pound; whereas the cost of sale per pound on US$350 per tonne is US$0.16 cents. It means that for every pound of sugar sold to the European buyers, which is the largest buyer, the company loses US$0.19 cents.
Which then brings home the point as quoted in your article, “The entity reportedly failed to enter into a three-year agreement to lock in the high prices and instead opted for a one year contract” and “it is now paying the price because of the short-sightedness of GuySuCo officials, one union official said this week”.
Given the grave financial consequence of this “short-sightedness” that caused the sugar company to not be able to enter into a three-year agreement for a higher selling price, was it a corporate decision that was endorsed by its Board of Directors to opt for a one-year agreement or was it a decision by corporate officers? There needs to be disclosure on this, since it’s the tax payers that have to feel the brunt of the cost of this level of irresponsible “short-sightedness”.
Which now brings me to another alarming exposure that the purported flagship factory, Skeldon, according to figures provided, “the factory also for the second crop, required an alarming 26.9 tonnes of cane to produce one tonne of sugar, more than double the industry average which stood at 12.9 tonnes of cane to one tonne of sugar”.
This factory that was commissioned at a cost of US$200M was slated to produce sugar at 10 tonnes cane per tonne sugar, but is now producing sugar at 27 tonnes cane per tonne sugar; almost 3 times reduced efficiency, and more than twice the average of the three Berbice Estates. This level of inefficiency is not only an embarrassment to the tremendous cost it took to commission this factory, but it is a wanton waste of tax payers money which, had it been invested in the social and economic welfare of the nation, could have redounded to significant improvement in the quality of life of the poor and impoverished.
Unless the government and Board of Directors rein in on the management of the sugar company with respect to sugar pricing negotiations, operational management on cane and sugar production with focus on cost of production and discipline of senior management, the company could gradually slide to its own demise; lest it perpetually remains a burden on the poor taxpayers of this country.
Ken Norman
Richmond Hill
Queens, NYC
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