Jagdeo again vows to “fix” Skeldon factory

Apr 22, 2015 News

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– as party promises full support for ailing sugar industry
Even as they admitted that there has been US$40M in losses annually in the sugar

industry, the leaders of the People’s Progressive Party/Civic (PPP/C) recently told a massive Berbice crowd that the party, if re-elected, will continue to do all that is necessary to keep the industry alive.
The incumbent party’s plans include pumping $20B over the next five years into various aspects of the industry as well as “fixing” the five-year-old $200M Skeldon factory.
This message was conveyed by President Donald Ramotar and his predecessor, Bharrat Jagdeo as the party hosted a rally at Estate Road, Albion, Corentyne, Berbice on Sunday.
Addressing thousands of supporters which included scores of sugar workers and their families, Jagdeo said his party intends to use power to change people’s lives. He described that as a continuous task, one they intend to work on in the future.
Jagdeo, the former President, who has oftentimes been called out on promises he failed to deliver during his 12-year tenure, asked Berbicians not to be “fooled” by the Opposition.
He told Berbicians that during the run-up to the 2011 elections the Opposition promised sugar workers a 20% pay hike, but “months after we went to the parliament to offer subsidy, (Carl) Greenidge said that we are putting the money down a black hole.”
Jagdeo said, despite this, his party has carefully outlined a plan for sugar industry. He admitted that US$40M in revenue was lost per annum, but his party had not followed countries like Barbados, Trinidad and Tobago or St. Kitts who opted to boycott sugar.
Jagdeo said that they sought to keep the industry alive and will be injecting “at least $20B” in it over the next five years into sugar.
According to Jagdeo, the PPP will be focusing on producing more so that unit cost will fall.
“We want to fix the Skeldon factory and improve all the factories,” he emphasised.
The former President had, before he ended his two terms in 2011, promised to personally intervene to fix the Skeldon factory he commissioned in 2009 and help turn the industry around. But the factory, the “youngest” and most expensive of the lot, has been the lowest producing.
At the rally, Jagdeo emphasised that it is his party’s intention to retain workers, and he revealed that the expansion of factories’ distilleries and refineries are also plans of the PPP.
“We have a clear plan, a clear vision of how we will help the sugar industry. All Granger says is one word: ‘I will not dissolve sugar,’” Jagdeo added as he went on to paint an uncertain future for sugar under an APNU+AFC rule.
Jagdeo said that the industry used to produce 900,000 tons in the past but at present production rate stands around 600,000 but according to him, sugar has grown from being a $10M to a $250M industry.
The Former President said too they took the PetroCaribe money to “support the price” as he added that the PPP/C administration injected has injected billions to support the ailing industry.
Meanwhile, the PPP/C’s presidential candidate Donald Ramotar said they intend to modernize and restructure traditional industries.
Ramotar implored the Berbice crowd to note that sugar is the “grandfather of all the industries” which is at present going through “some difficult times.”
The Prime Ministerial candidate blamed the ailing industry on the European Union (EU) which he said reneged in 2010 on promises of a sugar agreement that would have seen Guyana benefitting from preferential prices.
He emphasised that due to the price cut, the industry has lost more than US$40M a year.
“Any other industry in this country would have closed down, but the resilience and strength of industry has allowed it to go on.”
He said sugar needs to be restructured so that it can become a major contributor to the economy. The party has set a goal of some 400,000 tons of sugar to be produced by the time the $20B is spent.
The President said as sectors in the economy such as construction and mining have been growing, the sugar has come in for stiff competition and as such, his party is looking to mechanize the industry.
“Sugar now has to compete for labour…to compensate for that, we have to do more mechanization in the industry. In the fields… we have to make the fields ready to be friendlier to machine use. We have to retrain our workers,” he said.
Ramotar spoke too of planting more varieties of cane and supporting research in that regard. He said more investment is needed in factories to allow for greater recovery of the sugar from the fields.
The Presidential candidate said that in January he was in India and he met that country’s Prime Minister, Narendra Modi, and sugar was “high” on his agenda.
“When I was speaking to PM Modi, it was your faces that came in front of me. We are already sure that we will secure financial and technical cooperation from India to raise the efficiency of this industry for it to continue to grow,” the Presidential hopeful said.
Ramotar pledged both technical and financial assistance for the sugar sector and said that his party intends to make the industry more flexible, like that of neighbouring Brazil.
Making reference to the growing demand for biofuel globally and the research trial of ethanol production at the Albion Plant, Ramotar believes that a lucrative market for the product can be become a reality.
“We want to increase the production of ethanol, so that when the price of sugar is low, as it is now in the world market…we can produce more ethanol for sale and when the price of sugar is high, we can switch back to producing more sugar,” he said.
Ramotar spoke too of the possibilities of producing electricity from bagasse.
The plans of the PPP/C come at a time when the sugar industry is operating at a loss. The price for a pound of sugar on the world market is US$0.12 but GuySuCo’s top officials told Parliament last year that the entity is producing sugar at more than US$0.35 per pound.
In effect, this means that GuySuCo is producing sugar at almost US$800 per ton and is selling back at US$300 per ton. This is a clear indication that the company is losing significantly.
While the politicians seem intent on supporting sugar, many have painted a dismal future for the industry. Some have opined too that politicians are continuing to support the failing industry because they focus primarily on their constituents.

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