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GuySuco’s CEO may endanger the rum industry
Dear Editor,
I refer to an article in January 22nd, 2017 edition of KN titled “Using ethanol to mitigate State’s fuel costs could kill rum industry – GuySuCo’s CEO”.
Editor, whenever this officer makes a statement, he confirms his ineptness of and in the sugarcane industry apart from a myopic vision on transformation of this sector. The most recent being, an assertion to National Assembly’s Economic Services Commission (ESC) that ethanol for fuel will destroy the local rum industry. This is a deliberate attempt to dismiss a sound proposal to transform the sugar industry and certainly an unsupportive position on Government’s green economy initiative.
Let’s examine whether the assertions are rooted in facts by reviewing some details. The production of molasses like sugar is a function of quantity and quality of sugarcane. GuySuCo in its current configuration produces about 95-130,000t of molasses per year and the industry typically produces about 4t of molasses for every 100t of cane milled. The local rum industry takes about 70-90,000t of molasses at a price that is negotiated. The remaining 25-40,000t molasses is exported to Caribbean markets. In effect, GuySuCo produces more molasses than the local rum industry can take in its present configuration.
To discredit a fuel ethanol facility, GuySuCo’s CEO advances a dooms day scenario for the local rum industry although GuySuCo produces more molasses than the industry can take at this instant. This shows that this CEO is more focused on long term viability of another company other than survival of GuySuCo. Interestingly, the local rum industry makes a handsome profit every year while GuySuCo makes a handsome loss. One could only surmise that this officer is valiantly guarding some type of process/industry to ensure a steady and cheap source of molasses for the local rum industry. Is this something we need to analyze urgently? To further discredit the fuel ethanol facility, he claims that it is uncompetitive based on a study. Can the CEO share this study with the nation? The taxpayers paid for it.
A viable fuel ethanol facility will obviously require GuySuCo to increase molasses production from current levels, examine use of other process streams and explore use of starch based feedstocks. This would mean expansion, increased efficiency and innovation in the industry. Sadly, these concepts are alien and incomprehensible to GuySuCo’s IMC, a body that is paid G$7.7M per month and being advised by a battery of super salaried consultants. The CEO’s vision to close sugar factories and take lands out of cane production for non-sugar ventures will not support the establishment of a fuel ethanol facility and can possibly put the local rum industry in jeopardy. Is this the path we will take? Government needs to critically examine the advice it is receiving.
Sookdeo Persaud
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You raise an interesting point. Is GuySuCo subsidising the rum industry in Guyana by selling its molasses far below world price? Ibid the beverage industry and for that matter the price of sugar in Guyana. Seeing that everyone is dumping on this industry, it is time they stop giving freebies!