All of GuySuCo’s estates made losses for 2014, led by Skeldon with a whopping $4.2b, and this was likely one of the factors that pushed the Commission of Inquiry (CoI) into the corporation to recommend full privatization in three years.
The Skeldon sugar factory has been an enormous drain on GuySuCo’s finances from the point of construction and onwards and the scale of its impact on the corporation was revealed in the CoI report which was recently tabled in parliament.
The best performing estate financially was Blairmont but even it racked up a loss of $432m for 2014. The second highest loss after Skeldon was at the East Demerara estate of 2.8b. The other losses registered were as follows: Wales, $1.8b; Uitvlugt, $1.53b; Rose Hall, $1.52b; Albion, $983m. The total loss across all estates for 2014 was $13.3b.
The Albion estate was the highest producer of sugar at 51,080 tonnes followed by Skeldon at 35,890 tonnes. While Skeldon came second, its projected annual production capacity at its inception was supposed to be around 110,000 tonnes. Production at other estates was as follows: Blairmont, 33,499 tonnes; Rose Hall, 32,145 tonnes; East Demerara, 30, 931 tonnes; Wales, 18,897 tonnes; Uitvlugt, 13,916 tonnes.
Revenue by estate in descending order was as follows: Albion, $5.09b, Skeldon, 3,98b which included $279m in cogeneration income; Blairmont, $3.71b; East Demerara, $3,36b; Rose Hall, $3.3b; Wales, $1.89b and Uitvlugt, $1.5b. Without the cogeneration income, Skeldon’s revenue would have been slightly less than the Blairmont estate which is an astounding statistic considering that Skeldon was underpinned by a huge and costly modernisation programme.
While Skeldon produced the largest loss, the two West Demerara estates also seem particularly vulnerable when their production of sugar is compared to their losses. Uitvlugt produced 13,916 tonnes of sugar while registering a loss of $1.532b. Wales produced 18,897 tonnes of sugar at a loss of $1.8b. By comparison, Albion produced nearly four times the amount of cane as Utivlugt in 2014 and at a cost that was around $550M less.
In terms of the tonnes of cane/per tonne of sugar (TC/TS), Skeldon was the worst performer and this fuelled the scale of its losses. Skeldon’s TC/TS was 16.44. The best performer was Albion at 11.27 followed by Blairmont at 11.36. The figures for the other estates were as follows: Utivlugt, 13.23; Rose Hall, 13.32; Wales, 13.33, East Demerara, 13.8.
In terms of expenses, the figures contained in the report revealed that Skeldon was running a loss even in its co-generation operation. While it registered $279m in cogeneration income, the expenses amounted to $510m raising even more questions about the financial viability of the estate. Skeldon’s factory expenses for 2014 at $2.8b far exceeded every other estate with East Demerara coming the closest at $1.4b. The high factory expense at Skeldon is seen as a reflection of the continuing mechanical and other problems. By contrast, the factory expense of the highest producer Albion was only $989m. Rose Hall’s factory expense was $1.04b; Blairmont, $803m; Wales, $811m; Uitvlugt, $723m.
Skeldon’s agriculture expense of $4.47b was just under Albion’s of $4.53b though the latter produced 15,000 more tonnes than the former.
In terms of administration cost, the East Demerara estate seemed to be a particular problem at $688m, the highest figure. Albion’s administration cost was $558m; Skeldon, $381m; Rose Hall, $401m; Blairmont, $420m; Wales, $308m and Uitvlugt, $352m.
The Enmore Packaging Plant cost the East Demerara estate $242m during the year, the figures contained in the report said.
The parliamentary committee on economic services is expected to deliberate on the CoI report before the government takes a decision.
