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GuySuCo’s $82B debt misrepresented
…return to viability requires de-politicization—Fmr. Chairman
The Guyana Sugar Corporation’s (GuySuCo) indebtedness as reported in the media is somewhat misrepresented, and any successful return to viability in the industry will require a de-politicization of its management.
Fmr Guysuco
Chairman Vic Oditt
This is the view held by former GuySuCo Chairman, Vic Oditt, who in a recent missive to the media weighed in on the debilitating straits of the industry.
On the matter of the reported $82B debt, Oditt said $25B is for the Skeldon project. Government has been making regular payments to China for the loan taken but the sugar company has not repaid government.
Oditt noted too, that $26B is an accounting provision for the payment of pensions when employees reach the age of 60 and as such, GuySuCo should not be categorized as bankrupt, since its convertible assets are far greater than its debt.
According to Oditt, the decline of the industry’s production, productivity and profitability are due to flawed political policies, political interference and mismanagement.
“GuySuCo must be run as the business it is, free from political interference, by a fully staffed management team and a supportive Board,” said Oditt.
Drawing on his decade-long tenure as the industry’s Chairman, Oditt has since suggested also that the corporation seeks better deals for its lands.
He observed that “GoG has transferred thousands of acres of prime GuySuCo lands on EBD and ECD to developers who are making billions while GuySuCo gets nothing.”
According to Oditt, “The future sales of GuySuCo lands must be at commercial values.”
Oditt also suggested that additional value-added sugar products should be pursued by GuySuCo to complement the Demerara Gold brand.
“Revenue stream can be improved by converting more bagged sugar to packaged sugar, which has a minimum net premium of US$100 per tonne…The Demerara Gold trademark registration must be pursued for North America.”
According to Oditt, “Branding and co-branding must be done with hotels and supermarkets, locally and regionally.”
GuySuCo, he said, must use its geographical location to acquire more regional markets, since it can ship smaller tonnages on a regular basis, at a premium, as opposed to the large tonnages to be ordered to get the world market price.
The former GuySuCo Chairman, also noted that cogeneration of power from bagasse can be a major profit earner for GuySuCo.
“The Government of India or/and CDB should be approached to finance the acquisition and installation of cogeneration units (high pressure boilers and turbines) for GuySuCo’s factories, by May-June 2016.”
He said in India and many other sugar producing countries, sugar is now a by-product of the factories, since their main source of revenue is selling power to the grid.
GuySuCo, he said, “has the unique advantage of having two crops per year and its factories are well located to link to the grid…As such, GuySuCo’s factories can export over 50 MW of continuous power to GPL’s grid from cogeneration, thus earning significant revenue while saving foreign exchange.”
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