As indicated last week, today’s column is the last in the series of columns that I started on January 5, 2014 aimed at appraising the crisis state of Guyana’s sugar industry. This column will consider the four remaining steps, which undergird my proposal for a way forward in the industry. In the interest of full disclosure, I should let readers know that the series of columns I have presented so far is based on a chapter scheduled to be published in a forthcoming book on Guyana’s development challenges (The State of Guysuco’s Sugar Industry in the mid-2010’s). The book is expected to be available by the first quarter of 2015.
Readers would recall that thus far I have briefly described only two of the six steps embedded in the proposal that I am putting forward. These have been 1) deconstructing or unbundling the assets under the control of GuySuCo, and 2) creating a detailed portfolio of these assets in the form of business ventures, which are then put up for negotiated sale.
Step 3: Carve-out from asset re-bundling
However, despite my call for the creation of a diversified portfolio of assets based on those presently controlled in Guyana there should remain in principle a carve-out from GuySuCo’s assets to facilitate the supply of raw and value added sugar for markets, in which Guyana can reasonably expect to earn remunerative returns. At present, these markets include the local market, Caricom, and the United States’ tariff-rate quota market. It should be recalled that the European Union (EU) quota market is scheduled to end in 2017.
As earlier columns explained (see October 9, 2011) my proposal is founded on the ready acknowledgement that the investments which have been already made under the Skeldon Sugar Modernization Project (SSMP) (and which are above US$200 million, at 2011 prices) can be considered at this stage to be sunk costs. If so, these should not be