The US$110M Skeldon factory was commissioned yesterday with President Bharrat Jagdeo emphasizing cost recovery after all the investment pumped into GuySuCo and insisting that a sufficient cane supply should be available next year and not in 2012 as currently foreseen.
The factory, which had start-up problems, opened officially in circumstances where there are still a few internal operating difficulties as well as inadequate cane cultivation, a deficiency which is not projected to be remedied until 2012.
GuySuCo has timetabled a sufficient cane supply for December 2011 with actual harvesting in 2012, but President Jagdeo registered his dissatisfaction with this projection saying that it must be realised sooner, “next year.”
Jagdeo dismissed the idea of not having 1.2 million tons of cane in the field until 2011 saying that it was not acceptable, and that steps must be taken to ramp up supply. He stated that government is prepared to pump additional resources into the industry if that is what is required.
“It could be done from all I have heard and we’re not going to work in the business as usual fashion… we’re going to make a serious effort. I want the board to understand that and the Minister will have to push this,” Jagdeo charged.
The President’s address last evening was heard by a massive crowd of mostly sugar workers and those whose livelihoods are dependent on sugar. Jagdeo identified success as corresponding to adequate cost recovery that would contribute to GuySuCo’s annual revenue. He referred to the new factory as “a modernised building” which is to be tried and tested.
His comments about returns in the industry come in the wake of government’s massive US$200M investment in the Skeldon project and also reports out of GuySuCo that the company suffered a $4.8B loss in 2008.
The President emphasised that GuySuCo must focus on value for money, noting that every cent expended must be rigorously tested. He said too that accountability must be an integral part of the industry.
He reiterated an earlier point made a week ago that workers are a key factor in the advancement of the sector, adding that they deserve fair compensation.
Diversification was another issue raised by the President and he declared it a tragedy that Guyana has only been packaging sugar for ten years now. Further he noted that there are many ways to enhance value.
The new Skeldon factory is slated to produce 1.2M tons of sugar when fully operational but the facility is far from its target. Chief Executive Officer (CEO) Errol Hanoman told Stabroek News last night that the corporation is coming off a good production week, tallying some 10,000 tons of sugar. He said that they are on the production target for this year.
Hanoman addressed the opening yesterday and spoke on the issue of cane cultivation. He said that the new factory requires an additional 9,000 hectares of new land which is currently being laid out for fully mechanised harvesting to allow the phase-in of a mechanised operation. The CEO noted that 50% of the land is being cultivated by farmers.
Skeldon’s current internal problems were disclosed last night by President of the Guyana Agricultural and General Workers’ Union Komal Chand, who preceded President Jagdeo in calling on GuySuCo to speed up cane cultivation. Chand pointed out that the new factory’s twin punt dumper which handles up to 350,000 tons of cane per hour is not functioning satisfactorily. Chand also called on GuySuCo to identify, as a matter of urgency, the other shortcomings which can affect the factory’s full operational status.
Booker Tate management which was ousted earlier this year and replaced by an interim board was yesterday identified as the management team which had overall responsibility for the scheduled start-up of the factory last year.
Minister of Agriculture Robert Persaud who also addressed the gathering yesterday referred to the commissioning as an unfolding vision of the industry. He spoke of plummeting production in the industry among other challenges, noting that the turnaround plan for the corporation includes diversification as well as exploring new ideas such as ethanol production. He said too that they’re seriously considering introducing a sugar refinery plant at Skeldon.
Since 2005, the sugar industry has faced declining production and phased out price cuts in the European market. The industry recorded 226,267 tons of sugar last year – one of the poorest production figures in the last decade. The new Skeldon factory is slated to produce 1.2M tonnes of sugar a year, an encouraging figure in an industry which has suffered major setbacks over the last several years.
