GuySuCo’s operations came to a grinding halt two weeks ago due to persistent rainfall—a critical blow for the first crop and production, in a year the industry desperately needs a turnaround.
Chief Executive Officer Paul Bhim contextualised the impact on Wednesday when he told Stabroek News the industry is not only losing much needed opportunity days, but faces the threat of a prolonged first crop. Additionally, critical tillage operations are severely affected.
Bhim also spoke of the break in momentum, saying the industry was “doing well” and on its way to a good first crop before the weather crippled operations. “We’re at a standstill and even after the rains stop it would be another two to three days before the estates are back up,” Bhim said in an interview with this newspaper.
Estates across the industry are under water and Skeldon to a limited extent and according to Bhim the focus is currently on draining the water off the land. He projected that if the rains cease by this weekend, grinding could resume Sunday.
The weather has severely setback the industry, he said, pointing out that they also have to prepare for the May/June rains; the first crop is set to end before that period. Bhim noted that the corporation is not only losing, but also the workers. He added “they are losing valuable income.”
The canes in the ground are not likely to be affected with the exception of the younger canes, Bhim said, but the longer the weather persists the problems will escalate. Consequently, the industry could lose money but Bhim said they remain optimistic and are working on draining the water off the land.
Bhim said the industry is not at risk of losing income “at this time” but the two weeks of lost days is equivalent to 20,000 tonnes of sugar, which is approximately $2B dollars. He also clarified that if the weather improves, not all the estates would be ready to resume operations immediately. Rosehall, Blairmont and possibly Skeldon could be ready to start grinding, he said.
However, he added that the corporation has to keep its commitments to critical markets, which could be affected if grinding does not resume within another few days. Money-wise the corporation is fairly okay, he said, noting that government’s injection of $1B dollars in addition to a loan from Citibank in the US helped to reduce the backlog of creditors.
The corporation’s financing is now stable, but without increased production GuySuCo could end the year cash-strapped. Bhim observed that they need to keep production up this year to avoid a repeat of the cash problems in 2010; the corporation ended last year cash-strapped and heavily indebted. “We could struggle again,” he said of the financing, stressing the target this year must be met.
GuySuCo has set a 2011 production target of 305,000 tonnes, with the first crop projection at 138,000 tonnes of sugar. To date, some 42,000 tonnes have been produced with the rains setting the industry back by 20,000 tonnes based on current estimates.
Last year, the industry ended the year with a dismal 220,000 tonnes of sugar. “Things [were] looking good up until two weeks ago, now we have to wait for grinding to restart and also re-build the momentum,” Bhim said, while adding that the corporation was enjoying significant support from workers since the crop started.
Meanwhile, Bhim said Skeldon factory commenced operations for the first crop during the first week in February, which was after a few of the other estates had started.
He disclosed that they were forced to halt grinding at the factory for one week because of bad weather, and due to the fact that the harvesting operations at Skeldon are heavily mechanised.
Asked about how the factory is performing since the crop started, he frankly stated that it has been “in and out,” explaining that the problems appear from time to time. Bhim said a team from China is currently in the country working on the boiler which was damaged last year. The boiler is not expected to be functional until June despite the work currently being conducted.
President of the Guyana Agricultural Workers’ Union (GAWU) Komal Chand, when contacted, also commented on the negative impact the weather is having on the industry. He said that “nothing is happening,” particularly at the estates where the operations are mechanised.
Chand said too that the union is monitoring the situation, which he observed is “not good for production.” He said the workers are waiting on word to return to work and are also watching the weather.
