Dear Editor,
In my last letter to the press about Guysuco (‘Change instruments are needed to move GuySuCo forward,’ KN 4.1.09) I called for a team of local technical experts to be the change instruments to move this industry forward. I am obliged to confess that the President could not have made a better choice than Dr Gopaul. His expertise in strategy, his history in sugar and his willingness to take the tough but right decisions regardless of the consequences is exactly what is needed to sort out Guyana’s largest corporation. As he and his team recommend cost-effective improvements to the business processes in Guysuco, it is hoped that the overall cost will come down in the medium term. There should be some one-off costs that must be incurred immediately so as to change inefficient systems, but the justification for incurring these is that these systems will be no more after the turnaround programme is completed. This is where the corporate financial expertise of Mr Hanoman should be integral.
For emphasis, I state for the third time, GuySuCo is intertwined with Guyana’s success not only economically but at the socio-political level. That is why people like Donald Ramotar and Komal Chand have to be on the board to ensure that the gains won for the sugar workers must never be relinquished at the altar of expediency. I am gravely disappointed that Komal Chand is not on the turnaround board. I am still convinced that there are some in government who just do not understand the importance of sugar in Guyana and more importantly, the political relationship sugar has with the PPP. Time will tell whether I am wrong.
The government and the company have ploughed large sums of money into the Skeldon factory and the surrounding fields, so when will this investment start to repay the investors (the people of Guyana)? This must be the first question to be addressed by the turnaround team. The Skeldon factory is our hedge against the EU sugar price cuts. The mismatch between the price cuts and not having a more efficient operation will affect Guyana badly, especially in 2009 when the cut is expected to be deepest (36%). Any CXC student can tell you as revenue decreases, expenditure must also decrease to maintain the bottom line.
Mr Donald Ramotar and Mr Vic Ouditt had also highlighted the fact that there was some neglect on some estates and this was one of the reasons for a fall in production. Who was responsible for this neglect and what are the consequences? I trust it is not going to be business as usual, while these administrative managers are being transferred to headquarters as special project managers as Mr Ramesh Persaud alleges. Someone must be held accountable for negligence in GuySuCo.
Sugar has a bright future in the world. Right now March 2011 future contracts are trading on the world market at 14 cents a pound, a far cry from the 9 cents a pound that existed only 2 years ago. There are very valid reasons for this state of affairs. Over the next 2 years there is expected to be a sugar deficit according to Morgan Stanley’s latest forecast. To further support this position, as the credit crunch bites, it is becoming more and more difficult to raise investment capital to expand or build new sugar mills. The situation has deteriorated to a state whereby India, one of the largest consumers of sugar, is expected to import sugar in 2009. Brazil, the only country that could have satisfied this demand without causing a price rise, is more focused on using its cane to produce ethanol rather than sugar.
The above situation explains why it is extremely necessary that we get it right in GuySuCo as soon as possible, because the time is now to catch the wave, not when the market becomes over supplied. Let us all be positive that GuySuCo will turn around, because anything else will have serious consequences for one and all in Guyana.
Yours faithfully,
Sasenarine Singh
