Major offers submitted for “entire” sugar industry

Aug 07, 2018 News

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• Harold Davis Jr. named new GuySuCo Chief

Government has disclosed that it has received some major offers for the entire sugar industry but warned that it will be proceeding very cautiously in ensuring Guyana gets the best deal.

It was also announced yesterday that Dr. Harold Davis, Jr., the Director of Agricultural Services of the Guyana Sugar Corporation (GuySuCo) has been named the new Chief Executive Officer (CEO).

It is unclear what will happen to Paul Bhim, who has been performing the duties of CEO.

The news will come as the Coalition Government continues to grapple with a cash-strapped industry that is heading downhill fast with sliding productions in recent years.

During the post-Cabinet press briefing yesterday at the Ministry of the Presidency, Minister of State, Joseph Harmon, said that proper valuations and demarcations of the estates have to be carried out first before any decisions are made.

While the Government closed four estates- Skeldon, Rose Hall, Enmore and Wales in the last 18 months, intending to divest and privatise them- there have been some serious offers.

The chief spokesman did not immediately name the companies that submitted expressions of interest (EoI) but one of them, Kaieteur News has learnt, is coming from a joint venture involving partners from the Middle East, the US, India and Guyana.

Initially, there was interest in the four estates but then a proposal came in from the joint venture interest for the entire industry with plans to replace the aging factories, including the three at GuySuCo, with brand new ones. They will be concentrating on packaging and co-generation and other value-added activities.

There are over 70 offers for various parts of the four estates to conduct a number of other activities.

According to Minister Harmon, Davis’ appointment took effect from August 1 but he started work yesterday.

The new CEO is the son of former Chairman, the late Harold Davis.

Harmon also disclosed that a new GuySuco Board of Directors will be installed within days, following deliberations which are well advanced.

Government had delayed the naming of a new Board after disagreement on the nominees submitted.

In terms of the industry’s divestment, the Minister reminded of the need for caution and transparency.

The industry has been a deep worry for the administration.

“The fact that the estates were never independent entities by themselves, it will require, apart from a valuation of these assets, it will require a separation of them from the whole. What you’re talking about now is deciding what is Skeldon, what is Enmore… Each of the estates has to have a demarcation of what are the assets there,” he said.

Harmon reminded that PriceWaterhouseCooper has already completed a “tremendous amount of work and… by the end of September, they will conclude with the valuation of those assets.”

Already, two information memoranda with the valuations, on Skeldon and Enmore, have been completed and are available for investors to purchase so that they can make proposals.
“I can say we have some very exciting expressions not only for the four (closed) estates…we have proposals for entire industry, including GuySuCo (Albion, Blairmont and Uitvlugt) so there is a lot of interest there.”

He explained that the divestment will involve a significant amount of land sales from the state to the private sector, he added.

There will also be consultations with persons likely to affected, he noted.

The case of persons, for example, from Corriverton living on lands provided via the GuySuCo Welfare Fund but not in possession of titles, was cited.

These were examples, Minister Harmon said, which pointed to the need for thoroughness when dealing with such land issues so as to avoid persons being dispossessed.

Despite the interest being shown by potential investors, in all of the estates, the Minister of State said they (investors) are being urged to be patient while these issues are resolved.

Government has established a Special Purpose Unit, under the National Industrial and Commercial Investments Limited to handle the divestment and privatization process.

GuySuCo, with 17,000 workers in 2016, has been facing major problems in the last 20 years with aging factories, poor agricultural, corruption and union clashes.

For the last decade or so, consecutive governments have been sinking billions into the industry to pay salaries and supplies.

The Coalition Government had bitten the bullet, arguing that taxpayers can ill-afford to continue bailing the industry out.

Government recently negotiated a $30B bond to finance a number of technical improvements.

With some serious offers on the table, it is unclear whether Government will continue spending from the bond.

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