Given the recent trend in labour, the Guyana Sugar Corporation (Guysuco) will have to move swiftly towards greater mechanization, Agriculture Minister, Robert Persaud says.
“What has happened this year and prior certainly will shape the outlook of the industry. In fact 2011 and beyond certainly would see Guysuco of a different type. Not what people thought or their impressions of what the industry has been but these developments certainly has forced changes and has advanced the creation and the establishment of a sort of a new sugar industry which perhaps the industry and the sector has to come to terms with”, the Minister told reporters at an end-of-year briefing in the Ministry’s Boardroom yesterday.
Faced with crippling strikes this past year and low worker turnout, Guysuco has not met its targets and is unable to pay its bills. The company is currently awaiting $2B from the government from land sales to the Central Housing and Planning Authority. The state-owned corporation would be able to take care of at least some of its liabilities when that money comes through and if some more exports are made, Persaud said. However, early next year, the government will also have to make a further injection to allow Guysuco to pay its bills. While Persaud could not say how much money the government will pour into the struggling company, he said that this depends on how much Guysuco is able to produce and export this year and how the books close on December 31. With labour issues, one of the major problem faced by Guysuco this year, Persaud noted that from 2005 to 2009, there was a severe deficit in terms of cane availability. In 2009, there was just over 2.7 million tonnes of cane in the fields which would have given about 235,000 tonnes of sugar but this year, there is more cane that can be taken off. There was close to 3.2 million tonnes of cane which can produce close to 274,000 tonnes of sugar, Persaud said. However, he said, based on the numbers seen, Guysuco will just be able to take off 2.5 million tonnes of cane leaving about 700,000 tonnes to carry over into the New Year which is not necessarily a good thing because the longer the crop is in the field, its quality for sugar production, deteriorates.
Turnout over the year was at 48% across the industry and on Monday it was at 1% while yesterday, it was 8% and this is very worrying, he said. With the crop extended into January, he said that the corporation will try as much as possible to get workers out but also to introduce as much mechanization as possible. Guysuco needs every single sugar worker to get the cane off the land and has close to 16 000 workers on payroll but is only getting turnout of 42% to 52% of workers, Persaud said. If there had been full turnout and targets met, the corporation would not have required Government support because it would have taken care of its bills plus a wage increase, he said. He noted that currently the markets are favourable and the prices “makes one upbeat about the industry”.
The Minister reported that progress has been made in replanting and field conversion and two harvesters have been purchased and the company is looking at expanding the fleet of bell loaders. Additionally, two weeks ago, 36 tractors were purchased to aid in the agriculture as well as the mechanization element of operations. Given the occurrences with the European Market with price cuts and the dynamics with labour, this has been a key learning experience for Guysuco, Persaud said.
He stressed that workers are important and while mechanization would be able to take care of workforce shortage, it has to be gradual. In addition, Guysuco is in a situation where it has to replant cane but also has to convert beds, and this has to be balanced since it cannot replant the beds while they are being converted, he said. Ultimately, Persaud said, the aim is to move the industry into a state of full semi-mechanization by 2016, depending on resources.
Skeldon sugar factory
Meantime, as regards the troubled Skeldon Sugar Factory, Persaud said that it has produced more sugar than last year.
The Chinese contractors have given the undertaking that repairs to defects identified would be completed within the first quarter of next year while the damaged Number One boiler should be up and running in time for the second crop next year.
The Minister stressed that the funding for the repairs will come from the funds withheld from the contractor. Close to US$11M was not paid over to the contractor and these are the resources that the contractor will have to use to fix the defects as well as the boiler, Persaud said. “We had some tough negotiations with them on that, they will be funding the full costs of ensuring those defects and even the problem with the boilers are rectified”, he said.
As regards, Guysuco countersuing former management company, Booker Tate, Persaud said that work has started on this and based on the report from the Chairman and management they have already consulted their legal advisors on how to proceed. How much the company will be suing for will be based on legal advice, he said. Booker Tate sued the company over unpaid fees after its contract was terminated. Some 500 000 pounds are outstanding to Booker Tate which Guysuco has no intention of paying, Persaud said.
