Former sugar industry insider Anthony Vieira has expressed concern at the dismal performances of all the sugar estates last year, particularly the Skeldon factory, and he says that for GuySuCo to survive more factories have to be closed or more efficient methods of delivering the cane to the factories must be developed.
In analysing the performance of the sugar sector for 2012 in a letter published in Friday’s edition of the Stabroek News, Vieira noted that all estates are showing signs of poor labour turnout. For last year, he said, the factories stood idle, were out of cane and not grinding for 10,527 hours, during the first and second crops.
The actual time the factories worked during the year was 21,623 hours, he stated. “This means that due to an acute shortage of labour to cut the cane, the factories were standing idle 50% of the time during the crops waiting for the cane to be delivered, needless to say that during a substantial part of this time the factory’s workers had to be paid for standing by doing nothing,” Vieira wrote.
“This alone prompts one to ask why are we struggling with this inefficient and costly industry which we are keeping alive because we are providing work for people who do not exist?
It is clear that from these figures that for GuySuCo to survive more factories have to be closed or more efficient methods of delivering the cane to the factories must be developed,” he said.
When contacted, Minister of Agriculture, Dr Leslie Ramsammy said he was in a meeting. Attempts to reach him afterwards were futile.
The former sugar industry executive and former PNCR-1G parliamentarian laid the blame on government, who, he said, should have been aware since 2000 that the workers were migrating away from the industry.
He recalled that beginning in 2006, the European Union (EU) had started paying the development fund to Guyana which was compensation for the loss of the preferential price for sugar in the EU markets.
“The understanding was that this money was supposed to be used to make the industry more efficient and competitive and a substantial part of it should have been used to start the expensive process of converting the land for mechanical harvesting, on all estates, to offset the loss of workers,” he said.
Vieira pointed out that the money was never released to GuySuCo and a 2008 GuySuCo document, ‘Revised Commentary on Capital Budget 2008’- two years after the compensation to enhance the efficiency of the corporation had started to flow from the EU – included the paragraph: “the limited availability of funds in 2007 saw the factory investments limited to less than $350 million instead of the $1.35 billion requested; and in 2008 the factories asked for $5.6 billion to do their capital works but were only given $2.34 billion, less than half what they needed”.
He pointed out that GuySuCo’s board in its summary of the 2008 capital cuts stated that “this starvation of funds will significantly restrict management’s ability to achieve their objectives outlined in the GuySuCo strategy plans.”
“There were substantial amounts of compensation paid to Guyana starting from 2006 and between 2006 [and] 2012 the total amount paid was $24.7 billion but GuySuCo got none of it,” Vieira declared.
He noted that in 2012, GuySuCo finally got a subvention of around $5 billion from the budget but the issue remains. “Today we have a poorly functioning sugar industry which had never received any of the $24.7 billion…released to the Government of Guyana to rehabilitate and make competitive the Guyana sugar industry and was hijacked by the government to the detriment of the industry and the Guyana cane farmers who were entitled to their share of this money,” Vieira asserted.
He said that then minister of agriculture Robert Persaud should explain what was done with this money and why it was not spent where it was supposed to be spent in the sugar industry, which “starved as it was for funds, has caused it to collapse in this manner in 2012.” According to Vieira, “given this government’s propensity for incompetence and corruption the money was clearly wasted on grandiose projects which cannot bring wealth to the nation or its people.”
Skeldon disaster
The former MP said that the Skeldon factory still shows signs of being a very bad investment. “The factory has been literally throttled [as in strangled] down to grind at a rate of 196 tons cane an hour when in fact it was designed to operate efficiently at 350 tons an hour,” he said adding that the effects of this are apparent in its performance as the tons of cane to make a ton of sugar in 2012 at Skeldon was 16.29 while at Albion, it only took 10.52 tons of cane to make a ton of sugar.
“Skeldon therefore took 64.6% more cane to make a ton of sugar than Albion. One cannot buy and build a 350-ton per hour factory and grind at 196 tons per hour. The mills, the power generation depending on bagasse, the vessels for boiling the juice etc. all are underutilised operating at only around 56% of their rated capacity and must have a very substantial effect on the economics of running this costly and inefficient factory, and it is showing,” Vieira declared.
He also pointed out that at Skeldon the amount of grinding time lost for mechanical reasons at the factory was 550.51 hours. “During 2012 the time lost at all the other estate factories for the entire year 2012 was 2130.55 hours. So this brand new alleged state-of-the-art factory accounted for 25% of the total factory downtime in the entire industry! All the other factories combined recorded a total of only 1580 hours,” he said.
Vieira also noted that the total industry production for last year was 218,069 tons, which he said was the lowest in over two decades. “The production of the Skeldon factory was a total of 33,309 tons of sugar. Albion for example produced 54,022 tons. By this time, according to all of GuySuCo’s projections, Skeldon should be producing 100,000 tons of sugar. The disaster that is the Skeldon Sugar Modernisation Project (SSMP) continues and the time has come to ask if it is viable? At the very least a commission of enquiry should be set up to examine what has happened? And what is the way forward if in fact there is one,” he said.
The former sugar executive declared that the losses of sugar at the Skeldon factory are frightening. “Sugar is haemorrhaging at this state-of-the-art factory in massive quantities, in the filter press mud 1.18% of the sugar is lost, the highest in the industry, Albion for example was 0.51%. In the molasses 17.49% is lost, again the highest in the industry, Albion for example is 9.40%. The undermined losses at Skeldon were 6.45%, again the highest in the industry, Albion for example was only 1.29%. The boiling house recovery was also unacceptably low. The boiling house efficiency was the lowest in the industry at 88.67% whilst Albion was 99.52%, and the industry average was 97.40%,” he said.
Vieira said that the field data is equally depressing. “The yield per hectare of sugar at Skeldon was 2.81 tons, the lowest in the industry. Albion by comparison yielded 5.35 tons sugar per hectare in 2012, but compared to our recent 30 years average of 2.5 tons per acre or 6.17 tons sugar per hectare, the industry average in 2012 was only 5 tons sugar per hectare,” he said. He noted that around the planet, the normal production average is 10 tons sugar per hectare.
