From reading all the articles in the media about GuySuCo, one gets the impression that things are not right, and rather than getting better, if anything they will only get worse. The latest article is ‘GuySuCo plagued by run-down equipment -Interim Board’ (SN, November 30). I empathize with the board as I myself went through a similar situation. As long as working capital is short, as in this situation, problems will arise, for example, poor morale and inefficiency leading to increased production costs.
At present, we are all aware of the many problems in the industry. There is very good evidence of poor morale and inefficiency, and definitely of increased production costs, and believe me, as time passes the situation will only get worse.
I myself experienced a similar situation in the mid 1990s when the rice price fell by 50% and my earnings from exporting 60,000 tons of rice dropped from US$20.6 million to US$10 million. Many millers are now out of business as they, like myself, had borrowed heavily to invest in plant and machinery. Fortunately, I managed to pull through with help from the banks, government and the sale of some assets. With the facility at Hampton Court, Essequibo, still in my possession, by renting and joint venture arrangements, things worked out, and although we are not back to 100% things are much better.
So how do we solve GuySuCo’s problems? I suggest: a) sale of assets; b) becoming more efficient and reducing the production cost.
Both of the above will increase productivity and working capital. But how can they be achieved?
Plan a) is straightforward while plan b) can be tricky. For b) I recommend that GuySuCo form alliances with capable companies and the corporation be split into four distinct entities:
1. mill operations;
2. field operations;
3. machinery availability;
4. administration – which includes marketing, training, etc.
Definitely, I would spin off 1 and 3 and refine the present system to take care of 2 and 4. For one thing, what I saw at the Uitvlugt factory last week is not far from disaster. The mere appearance gives one the impression of low morale, inefficiency and a high cost of production. Form an alliance with capable companies to operate all GuySuCo’s sugar mills and pay them a fee for every tonne of sugar produced, implementing a penalty system for non-performance.
With regard to 2, I know that the situation in terms of availability of production machinery is disastrous. One can see many different makes and models of equipment in GuySuCo’s parking lot. There is a need to standardize when purchasing new equipment. When I was operating at Blairmont, I observed brand new tractors, excavators and equipment just lying idle for days on end, and much mismatching of machinery to equipment. I was told once that all estates needed the required amount of equipment as the season was very short and intensive work had to be done quickly.
I appreciate that, but if you were to get a private company to inventorize all GuySuCo’s equipment workshop capability and personnel availability, and establish one machinery pool based at Rosehall, Canje one could, with proper planning, make sure that machinery and equipment were always available to all the estates.
The Berbice Bridge will definitely facilitate this, as equipment can be moved around very easily from Skeldon to Uitvlugt. My gut feeling tells me that there is more than enough machinery in the system, but it is poorly managed. I have observed also that GuySuCo is advertising for pick-ups. This I think can be easily solved without much cost to anyone, as it can be seen that many pick-ups in relatively good condition are parked in the ministry’s compound. They should be evaluated by the private contractor, repaired and made available to GuySuCo, thus preventing them from spending about $300 million in their acquisition.
We all agree that sugar like rice is very important to Guyana. Sugar is managed solely by GuySuCo and is doing poorly. Rice is owned and managed by many and doing relatively well. So let us look at this model seriously.
Yours faithfully,
Beni Sankar
