GuySuCo in need of another bailout - Chairman

GuySuCo in need of another bailout – Chairman

May 18, 2016 News

…More than 60% of $9B budgetary allocation already “gobbled up”

The Guyana Sugar Corporation (GuySuCo) is expected to approach Finance Minister Winston Jordan for another direct cash transfer to the sector.
This is in spite of the fact that the industry was awarded a whopping $9B in early January to aid its recovery and modernization as the industry was threatened by weakening prices, aged machinery and high production costs.
Kaieteur News understands that more than 60 percent of the funds have already been expended.
In a brief interview with Kaieteur News yesterday, GuySuCo Chairman, Dr. Clive Thomas said that based on the number of mechanization projects that have been embarked on, a large portion of the monies have been expended. He said, too, that even though there has been a shortfall of 30,000 tonnes in sugar production, it is only for the first crop, and the second crop is expected to do much better.
Dr. Thomas said that based on GuySuCo’s expenses it cannot help but turn to the Treasury again for assistance.
The GuySuCo head maintains, however, that even in the face of El Nino weather patterns, sugar projections for the industry this year remain high.
As for the “extreme” recommendations noted in the report on the Commission of Inquiry into the sugar industry, Dr. Thomas cautioned that those working in the sector should not be worried for one bit whether the sector would be closing shop.
“Indeed the changes that are coming will be radical, but it is necessary, because you cannot expect to be doing the same thing every year and getting different results. But we aren’t closing shop. We are concerned about the survival of this industry, but more importantly, bringing it to good health. We are trying to move towards value added products coming out of the sugar assets. We are trying to use the assets of the industry in a more creative way.”
Dr. Thomas said that he is working towards recovering Skeldon’s co-generation plant which was sold to Skeldon Energy Inc. (SEI).
He said that the former CEO of GuySuCo, Rajendra Singh sold the company’s generation facilities to Skeldon Energy Inc—a Special Purpose Company jointly owned by the Guyana Power and Light (GPL) and the National Industrial and Commercial Investments Limited (NICIL), for US$30m, only to have it buy back power to run the factory.
To date the sugar company has also only been paid US$19M of the agreed US$30M and SEI has since indicated that it could revise the outstanding US$11M amount.
Dr. Thomas told Kaieteur News that it is imperative that the plant be recovered, as it is a major supplier of power and basically the lifeline of the factory.
“It is such a major producer of power that it supplies 90,000 households in Berbice. We are in discussions with having that sale being reversed from being the property of GPL. It is an important pillar for GuySuCo. We are hoping to get it for next year. We want to be able to sell GPL power. We are getting ripped off with the plant being in the possession of another company.”
The GuySuCo Chairman explained that high on the entity’s list of priorities is moving towards the diversification of the sugar industry especially as it regards refined sugar.
He noted that GuySuCo is still working to achieve a breakthrough with a new upgraded sugar called, “Enmore Crystals.”
“This product will help to give us some leverage to sell our sugar for more. This packaged sugar is only being done in small quantities for the markets in Canada, USA and Britain.”
The GuySuCo Chairman said that the Board and Management believe that the packaged sugar will do better than “the ordinary sugar sold in the transparent plastic bag.” He noted that samples are already being taken to the three markets he outlined, among other places where contacts are made.
Dr. Thomas said, “We are trying to penetrate the market with small quantities and build up as time goes. We are basically doing this to see how we can get a higher price for our sugar. And so far, it has been receiving favourable reviews from our international contacts, so we are looking to see how this works out, but there are other plans in the pipeline for the diversification of this product and bringing the industry back to good health.”

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