Agriculture Minister Dr Leslie Ramsammy says that the government will continue to invest money in the sugar industry and is convinced that there will be a turnaround in its fortunes.
Amid opposition calls for a restructuring of the industry which has seen low production in recent years, Ramsammy also contended that the beleaguered Skeldon sugar factory will overcome its problems.
Ramsammy’s statement on March 12 had followed an A Partnership for National Unity (APNU) press conference which called for a revamping of the industry. In his statement Ramsammy accused both APNU and the Alliance For Change (AFC) of calling for the closure of the industry. Both APNU and the AFC have since denied this.
Ramsammy said that the PPP/C sees a Guyana where sugar is still a crucial industry.
“We accept the responsibility of investing in the sugar industry in a manner that prepares the sugar industry for an even greater role in Guyana’s economic and social future. The PPP/C will stand firmly behind GuySuCo and with the sugar workers of Guyana. We have and we will continue to invest resources as much as we can to ensure that GuySuCo is a major part of Guyana’s development”, Ramsammy asserted.
Despite the difficulties in the industry recently and the precarious financial position of the state sugar corporation, GuySuCo, Ramsammy said “we still gave a wage increase to sugar workers and in spite of reduced production in 2013, we still provided production incentive pay to workers amounting to 5 days pay.”
He said that at the time the PPP/C took office in 1992, it knew that the sugar industry would have to be refashioned to boost efficiency and to address changing circumstances.
Daunting
“The task was daunting, but very clear. First, we had to rehabilitate and modernize the factories for greater efficiency. In this task, the expansion and the modernization of Skeldon Factory became a flagship initiative. More than US$200M has been spent on this project and other improvements within the industry. Skeldon has been plagued with start-up problems; but new factories, with new technology, always face a period of about five to ten years of learning and teething problems before they become fully operational and meet full expectations. Yet, I expect that by 2020, Skeldon would be producing between 60,000 to 100,000 tons of sugar”, the Agriculture Minister asserted.
The Skeldon modernization project was the brainchild of former President Bharrat Jagdeo and critics have charged that it has failed miserably, continues to do so and is a huge drag on GuySuCo’s finances. While Ramsammy projects production between 60,000 to 100,000 tonnes per annum by 2020, critics have argued that it should have been producing 110,000 tonnes per annum from 2009 based on the premise on which the huge investment was made. It is producing only a fraction of this, 34,000 tonnes in the last year. GuySuCo’s total production last year was 186,000 tonnes, the worst output in 22 years.
Ramsammy said that rehabilitation and reconstruction of factories throughout the 1990s and to this day continue throughout the industry. He said this includes equipment replacement with improved designs for cane handling and preparation, milling, clarification, evaporation, crystallization, centrifugation, sugar handling, steam generation, power generation, and distribution to bolster factory reliability and efficiency. Boiler stations have also been improved through better control and monitoring instrumentation and installation of air-heaters, Ramsammy said.
He added that better syrup clarification and sugar drying systems have been set up at Blairmont and Enmore for production of packaged sugar and packaging plants at these two factories now have a capacity to produce more than 50,000 tons of value-added packaged sugar.
Ramsammy said “We have built a capacity to produce different brands of premium quality direct consumption sugar such as Demerara Gold, Demerara Brown and Genuine Demerara Cane Sugar.”
Though this capacity exists, critics say that the packaging plants are not being used anywhere near capacity because of the poor GuySuCo production.
Inevitable
Ramsammy said that in 1992 the PPP/C knew that mechanization was inevitable and knew that without it the sugar industry could not survive.
“But we also knew that the conversion for mechanization would be costly and would cause a period of under-production. Yet we could not postpone the mechanization trajectory. Today, almost 70% of sugar cane are loaded by bell loaders. There are now 56 bell loaders loading canes from the fields into punts. But we have now also ensured that 24% of the cultivated canes are harvested and loaded by mechanical harvesters. There are presently eight such harvesters at Skeldon and at Enmore and LBI. The outmoded and outdated crawler tillage machines are being replaced by more economical and efficient wheel-based tillage tractors. We have also introduced semi-mechanical planting where it takes only 5 persons to complete a hectare of planting compared to about 18 persons previously”, he asserted.
The reconfiguration includes new methods for fertilization, pest and weed control, more environmentally-sound methods, better types of canes and other improvements, Ramsammy said.
“The truth is that reconfiguring the industry was necessary and we could not postpone this important exercise any longer. The painful consequence is financial investment, delays in production increases etc. What some, like the politicians in APNU and AFC and others, characterize as the death bed of the industry has been preparing the platform for a more robust, more efficient and productive industry”, Ramsammy contended.
In another statement on the industry on March 9, Ramsammy had said “I believe that 2014 will begin to reverse the recent poor performances and demonstrate that sugar is not only a viable industry, but that it is capable of being a lead industry again. Each time, during the last three years when the weather was reasonably good, GuySuCo’s production demonstrated glimpses of success. For example, in the last two full weeks of operation, GuySuCo has produced almost 18,000 tons of sugar”.
He also attacked the view that in 1992, the PPP/C had inherited a thriving sugar industry and has since brought it to the point of destruction.
“I dismiss this lie and this myth that dishonest politicians and commentators are trying to promote. The PPP/C did not inherit a thriving sugar industry. Rather the PPP/C Government inherited a dying industry, a broken industry in which every aspect of the sugar industry, from fields to factories, was in a dismal, dilapidated and neglected state.
The PNC inherited a sugar industry which in the 1960s, routinely produced greater than 300,000 tons of sugar. But this production efficiency began to deteriorate and production fell to a low of 131,999 tons by 1991. The PNC cannot deny or hide the truth: they took the resources of the sugar industry and squandered it on failed ventures and mismanagement. The PNC’s sugar levy raped the industry and left it as a failed industry by 1991”, Ramsammy argued.
He said that under the PPP/C production eclipsed 250,000 tons 13 times in the last 20 years and went past 300,000 tons on three occasions.
In a third statement on Friday, Ramsammy responded to charges by the opposition, that the government had blundered in choosing Chinese contractor CNTIC to build the Skeldon factory and should have opted instead for a Brazilian or Indian firm.
“The PPP/C is well aware that there are credible Indian and Brazilian companies that would have been good candidates for the construction of the Skeldon Factory. But it is not up to the Government of Guyana to select any company just because we know they can do the job. The Skeldon Factory construction was advertised in a public tender, as are all our construction works, in accordance with the laws and regulations of Guyana. We are obligated to tender for any construction work and in the case of the Skeldon Sugar Factory we strictly followed the laws”, Ramsammy said.
No Brazilian Company tendered for the construction of the Skeldon Factory, he said. Ramsammy said there was a bid from an Indian company but that bid was higher than the one from the Chinese Company. “Had we awarded the contract to the Indian Company we would have been accused by these same individuals of favouring that company.
“People should know that the bids were evaluated by Booker-Tate experts and the recommendation for the Chinese Company which had the lowest price was based on a technical evaluation that found the company had the technical qualifications for the award”, Ramsammy said.
