A major management shake-up at the Guyana Sugar Corporation (GUYSUCO) could be on the cards as government battles to arrest the continual decline in the performance of the sugar industry.
With the industry set to record another whopping shortfall in earnings at the end of this year, Agriculture Minister Robert Persaud said earlier this week that the industry will undergo organizational changes that will come into effect in January next year. It is estimated that GUYSUCO will record a $3 billion shortfall in earnings at the end of 2008.
The announcement by the Agriculture Minister that organizational changes in the industry are imminent comes in the wake of a recently concluded inquiry into the performance of the East Demerara estates triggered by President Bharrat Jagdeo’s recent public rejection of assertions by the management of GUYSUCO that production shortfalls were due to weather among other factors. In rejecting management’s analysis of the underperformance of the industry President Jagdeo had explicitly expressed his dissatisfaction with the performance of the GUYSUCO management.
In his own response to the completion of the report on the state of the industry earlier this week the Agriculture Minister declined to give details of the anticipated changes at GUYSUCO but appeared to endorse the President’s view that management deficiencies were integral to the underperformance of the industry. Persaud blamed the crisis in the industry on “neglect” among other factors, adding that the crisis in the industry suggested that there was need for a greater management presence in the field.
GUYSUCO has suffered a number of significant setbacks this year including the failure of Chinese contractors to complete the modernization of the Skeldon plant by the agreed October 2008 deadline. In the wake of the failure of the Skeldon factory to pass tests that would have allowed it to become operational on schedule President Jagdeo has sought to provide assurances that the contractors are contractually bound to correct the faults before handing over the facility. Following a recent visit to China the President also disclosed that he had held discussions with officials of the contracted firm and had sought and received assurances that the glitches would be remedied.
While up until now the government has appeared reluctant to openly blame the Chinese contractors for the Skeldon setback, this week, the Agriculture Minister declared that the delay in the commissioning of the factory was “due to the performance of the contractors” and that the tests which are expected to precede the facility coming into operation cannot now take place until early next year.
Government is pinning its hopes on the Skeldon Factory – which, when it becomes fully operational is expected to produce more than 8,000 tons of sugar per day – to strengthen GUYSUCO’s capacity to supply sugar to its critical European market.
What has not helped to improve GUYSUCO’s sugar production and, by extension, its reliability as a supplier, is a volatile industrial relations climate which has become a source of concern to both the GUYSUCO management and to government. Recently, management came under additional official criticism for “mishandling” the October strike by the Guyana Agricultural and General Workers Union (GAWU), the larger of two unions representing sugar workers to back a claim for a 14 per cent wage increase. Following protracted and ultimately fruitless talks between GAWU and the GUYSUCO management the matter was eventually taken to arbitration where the Union was awarded a 6 per cent increase.
However, government has announced that given the parlous state of the industry’s finances the payout will have to be effected by borrowing and that the payout will be spread over a period.
The management of GUYSUCO has long been critical of the industrial relations posture of GAWU accusing the union of making wage increase demands which it knows the company cannot afford and timing its industrial action to negatively affect the company’s overseas supply commitments.
Earlier this week a source close to the industry told this newspaper that the ‘real industrial relations problem” facing the management of the industry is the “political complexity” arising out of the need to negotiate with a union that can bring pressure to bear through its influence with the political hierarchy.”
One of the changes in the GUYSUCO management structure that is likely to come into effect early next year is the appointment of a Deputy Chief Executive Officer The sugar industry has had a management contract with Booker-Tate since 1991 under which a Booker-Tate official serves as GUYSUCO’s Chief Executive.
