Newly appointed Agriculture Minister Dr Leslie Ramsammy says he is not in favour of the Skeldon factory being completely managed by foreigners but indicated that the matter will be addressed by GuySuCo’s new board, which is expected to be appointed before the end of the year.
The minister, however, said that there would always be need for technical support from foreigners within the sugar industry and that skills may need to be brought in from time to time. He indicated though that he was not in favour of foreigners completely managing the troubled US$200M factory which is still not functioning to its maximum capacity.
“I am not going to be definitive on this issue because I remain unconvinced that that is the way to go,” Ramsammy said yesterday during a press briefing at his office. “So we will discuss this matter. If there is a need for that then we will explore that. But I don’t think an argument has been presented yet to me that we need to go in that direction,” he added. He said that the matter is on the agenda for the new board to discuss.
The issue of Skeldon’s management came to the fore several months ago, when former Agriculture Minister Robert Persaud declared that GuySuCo did not have the ability to manage the costly flagship factory.
On August 19, Persaud said: “…the reality is, and to be honest, GuySuCo does not have the competence that it perceives to manage the factory, not even Guyana does not have that expertise, (and) at the end of the day GuySuCo would have to find an arrangement” for the management of the Skeldon factory. He then urged the board of GuySuCo to speed up consideration of proposals by an Indian company and a Chinese company for the management of the Skeldon operations.
It was seen as a stunning declaration and about turn by Persaud as his government had dismissed the previous manager Booker-Tate and opted for full Guyanisation of management. However, following criticisms from across the industry plans for foreign management of Skeldon were taken off the table particularly after questions were raised about whether a tender had been put out for a management contract.
CNTIC
Many of Skeldon’s problems are believed to stem from the construction work on the factory.
The factory was built by the Chinese company China National Technology Import and Export Corp (CNTIC). The decision to put construction in the hands of CNTIC had been severely criticised. The old Skeldon factory was rated at 92 tonnes of cane per hour while the new factory has the capacity to process 350 tonnes per hour, but is performing far below this.
Years after the turnkey contract was supposed to have been completed and the factory fully handed over by CNTIC it continues to experience major problems and produce below capacity. There is also the outstanding issue of liquidated damages which should be pursued against CNTIC and other penalties.
Ramsammy yesterday noted that based on previous pronouncements and discussions on the matter, persons may feel that foreign management of Skeldon may be immediate. “I can assure that if such a thing happens, it is not happening early in 2012,” Ramsammy declared.
Ramsammy’s statements echo those of President Donald Ramotar, while he was campaigning ahead of the November 28 elections.
“I am not sure if his (Persaud’s) assessment is totally correct about our capacity to manage Skeldon but I do know that we will probably still need some technical assistance from outside in dealing with some of the issues,” Ramotar had said in a response to a question during a press briefing. Ramotar, a long-serving board member of GuySuCo, said that from a managerial perspective he felt that the Sugar Corporation had the skills to manage the industry, while adding that he would not like to see the return to a situation similar to the Booker Tate arrangement.
Production
Meanwhile, Ramsammy indicated that this year’s sugar production would most likely be up to just over 237,000 tonnes, up from the 225,000 tonnes produced last year. Ramsammy indicated that GuySuCo will most likely not reach 240,000 tonnes because it had to bring its last crop to a premature end due to the recent inclement weather.
GuySuCo’s original target was 300,000 tonnes, which was later revised to a target of 282,000 tonnes but last month Chief Executive Officer of GuySuCo Paul Bhim said that the revised target set for the year would be out of reach.
Meanwhile, Ramsammy yesterday indicated that he was optimistic about sugar’s future despite the recent challenges being experienced in the industry and said that Guyana can produce 400,000 tonnes of cane by 2015. “We have to ensure we keep our targets.
Our replanting which is set at 20 percent will have to be achieved,” while noting that the industry has not been able to achieve this level within the last decade. He said that he is working with the management to ensure that this figure is achieved in the new year.
“If we’re are going to achieve 400,000 tonnes we must maintain an acreage of about 50,000 acres and right now we have 43,000 so we have to bring some more land under cultivation,” he said. This is where Skeldon is important, Ramsammy said as he plugged the importance of private cane farmers. He said too that cane farmers in other parts of the country need to be encouraged and he said that the ministry is working on special packages to promote this activity.
Even though the factory was producing below capacity, the Skeldon estate and private farmers were also not generating enough cane to feed it. Experts had said that there was poor planning of the entire project.
Ramsammy also said yesterday that it would be important to maximize existing avenues and to explore new openings in the industry. “We have depended traditionally on selling our bulk sugar, which is the product with the lowest price,” Ramsammy said, indicating that Guyana is producing at a limited capacity right now. “We have a maximum capacity which we are not producing yet of 50,000 tonnes per packaged sugar- 10,000 at Blairmont and 40,000 at Enmore,” he said. He noted that while Blairmont is working at full capacity the same could not be said as yet of Enmore because not enough sugar is being fed to the plant.
He noted that this packaged sugar carries premium prices on the Caribbean market.
However, Ramsammy said Guyana should also be moving towards producing packaged processed sugar. He also said that the ministry will be working towards ensuring additional co-generation facilities.
