Amid the deep-seated problems of the flagship Skeldon factory, an experienced manager from UK sugar refiner Tate and Lyle was quietly brought in to run it in February of this year.
There was no announcement by the industry or the government of the arrival of Richard Orr to take charge of the factory and estate.
However, senior officials at the Guyana Sugar Corporation (GuySuCo) have stated that it was never meant to be a secret that a Tate and Lyle official was currently holding the position of Estate Manager at Skeldon.
Stabroek News was told that Orr, who had previously told this newspaper that contractually he is unable to speak with the press, was brought on in February of this year after the former estate manager Karamchand Bramdeo left to pursue a master’s programme.
Since 2012, Bramdeo had notified executives that he would be leaving to pursue his studies and that they needed to find a replacement. This publication was made to understand that GuySuCo reached out to its European refiner knowing that the sugar industry is in a state of crisis. The resort to Tate and Lyle, analysts say, seemed to be an acknowledgement that the local industry did not have a reserve corps of managers who could fill gaps and that the woes of the Skeldon factory were beyond the ability of the present management.
Several years ago, when the plight of the Skeldon factory deepened, then Agriculture Minister Robert Persaud had said that GuySuCo did not have the requisite skills to run the factory and that managers from China or India should be hired. This suggestion was not proceeded with.
Though Orr, a former managing director of Kakira Sugar Works in Uganda, has been here since February there has not been a sustained and significant improvement in the output of the troubled Chinese-built factory. Orr’s arrival also coincided with the presence of the South African company Bosch, which was contracted by GuySuCo to do expensive rectification work on the problem-plagued factory which had been built by CNTIC.
GuySuCo’s new plan of action from this year acknowledges that the factory will not be able to grind anywhere near the rated capacity of the turnkey operation delivered in 2008. The sugar corporation’s strategic plan for 2013-2017 has slashed by 100,000 tonnes the projected annual output contained in the 2009 blueprint and planned improvements at the troubled Skeldon factory will see the flagship project grinding only at 71% of what had been expected since 2008.
According to the plan, seen by Stabroek News, GuySuCo is projecting annual output of 350,000 tonnes within five years compared to last year’s figure of 218,000 tonnes. This year’s total output is expected to be 201,000 tonnes.
According to one industry insider, Orr is not technically on GuySuCo’s payroll and he was actually hired as a consultant. It was explained that since GuySuCo and Tate and Lyle already share a successful long-term relationship, the manufacturing company would absorb the consultancy salary.
Since Tate and Lyle would only be providing a consultant for the two-year period that Bramdeo was studying, it was a contract based on convenience while being mutually beneficial. The industry insider told Stabroek News that Tate and Lyle does have a vested interest in GuySuCo’s success so it was not farfetched that it would want to protect its interests. Tate and Lyle is responsible for the refining of almost 80% of GuySuCo’s exports to the EU.
GuySuCo’s 2013-2017 Strategic Plan – still to be publicly released ‒ is devoid of any real assessment on how to correctly turn around the industry within the next four years. The strategic plan notes that expansion of the direct consumption market was necessary and that the delivery of bulk raw sugar to both the EU and the United States had to be expanded. While 2017 is most likely the year that preferential pricing ceases, unless the EU parliament further extends the sugar quotas, GuySuCo will continue its current contractual relationship with T&L.
GuySuCo’s strategic plan outlines an industry that can make over US$716 million in gross revenue from 2012 to 2017 in the sale of bulk sugar to the EU market. This figure is calculated with preferential pricing in place so it is only a projection and of course is based on GuySuCo’s ability to produce annual targets which have been an issue for the past five years.
While GuySuCo’s will need to address how it goes forward after 2017, it will most likely continue selling to Tate and Lyle and at this stage Tate and Lyle can be seen taking an interest in their investment by sending one of their own to manage the Skeldon estate, which has routinely been plagued with the most issues due to the failures of the US$110 million Skeldon factory.
