Latest update November 23rd, 2024 1:00 AM
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Deal nearer with DDL on Enmore takeover
An early deal for the re-opening of the Enmore factory is closer
It appears that an early deal for the re-opening of the lone estate in the East Demerara area is closer. With the Enmore estate closed in December, a worried Demerara Distillers Limited (DDL), makers of the world-renowned, award-winning El Dorado rums, had made a pitch for the estate. A team of DDL officials recently inspected the estate.
The DDL group, which runs supermarkets, controls Demerara Bank, and has shipping interests, had expressed deep worry this year after it was announced that four of the seven estates of the Guyana Sugar Corporation (GuySuCo) were closed last year.
DDL depends heavily on molasses, a by-product of cane sugar, for its rum production.
The closure of the estates meant that not enough molasses would be coming this year, potentially impacting growing overseas markets of the company. The offer was immediately made by DDL to run Enmore.
However, DDL’s offer would have come at the same time that Private Sector Commission (PSC), a powerful grouping of local businesses including a telephone company, banks and DDL’s biggest competitor, Banks DIH, had also made an offer to run Enmore estate, located 16 miles from the city, on the East Coast of Demerara.
Yesterday, officials of the PSC visited Enmore also.
An official disclosed afterwards that PSC has offered to run the estate, but the commission wants Government to plug in the operational money.
With little canes in the ground and money needed to pay staffers, it would be difficult to countenance a proposal that would see Government sinking any money, an official on the visit disclosed.
Enmore, Skeldon, Rose Hall and Wales are the four estates up for divestment and privatization.
Government has established a Special Purpose Unit (SPU), under the state-controlled National Industrial and Commercial Investments Limited (NICIL) to oversee the process.
Internationally-renowned PricewaterhouseCoopers, a consultant, has been retained to value GuySuCo’s assets and vet proposals that have come in. There are more than 70 proposals on the table for the four estates.
SPU has to finish its work in about eight months.
The agreement to manage Enmore will have to be temporary, until the details are worked out as to how much that estate is worth, and whether all of the assets, including lands, factory and equipment would end up in the hands of DDL, and at what price.
GuySuCo has been on a downhill slide in the last decade, recording several lows.
Billions of dollars have been pumped annually to keep the industry, with its 16,000 workers, afloat. With almost 5,000 workers made redundant last year, GuySuCo has brought down the employment to just over 10,000.
The corporation has been producing at three times the price it was selling for with almost all areas haemorrhaging cash.
The Coalition Government, on entering office in May 2015, had made it clear that the bleeding must stop. It installed a new board, headed by Professor Clive Thomas, with Errol Hanoman, a former Booker Tate official, bought back.
Government has signaled intentions to remove the GuySuCo board, making it clear it was unhappy with how the estates were closed.
The board is expected to be removed shortly with Government mulling a number of options.
The GuySuCo troubles have divided the National Assembly, with the Opposition insisting that the workers should not have been affected. However, GuySuCo has been complaining bitterly that workers have not been turning up to work. The average turnout at the estates has been about 60 percent last year.
Without one pound of sugar produced, GuySuCo has already reduced the year’s target to just over 100,000 tonnes.
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