With the announcement that the Guyana Sugar Corporation (GuySuCo) will close down the Wales Sugar Estate on the West Demerara by 2017, Chief Executive Officer, Errol Hanoman yesterday stated that no other estate closure is planned.
He told Stabroek News that the Wales closure was not only due to the losses – in 2014 the Wales Estate operated at a loss of $1.8B – but also the amount of funding that would be required to bring the factory and the fields to a point of profitability.
Although he did not reveal the estimated funding that Wales would need, Hanoman said in 2016 mid-year maintenance would now allow for heavy investment to be made at the Uitvlugt sugar factory, also on the West Demerara. He said that simply put, the financial difficulties of the corporation have rendered it impossible to keep plugging money into the poorly performing Wales Estate.
Hanoman stated that a technical team is looking into the additional costs that would be faced by the private cane farmers at Wales on the West Bank of Demerara in shuttling cane to Uitvlugt on the West Coast of Demerara for grinding. He said that yesterday a team from GuySuCo held a meeting with private cane farmers to discuss the logistics. Hanoman asserted that the Uitvlugt factory was “more robust” and that a higher sugar recovery could be expected.
Wales’ sugar production was almost 5,000 tonnes more than that of Uitvlugt and the tonnes of canes per hectare was also higher than that of Uitvlugt in 2014. As for the tonnes of cane/per tonne of sugar both estates were on par according to the recent report of the Commission of Inquiry (CoI) into GuySuCo.
Hanoman said that the planned meeting with the two sugar unions, the Guyana Agricultural and General Worker’s Union and the National Association of Agricultural, Commercial and Industrial Employees today was to formally notify of the estate closure. He said that the company did not intend for the estate’s closure to be public knowledge as yet but a statement was issued on Monday to ensure that the facts were accurately presented.
Hanoman said that the talks today will address the redundancy of employees that was outlined in the statement. He noted that the company would have to pay out severance packages because the alternative was not palatable. “At the end of the day if you have to pay severance you have to pay instead of going on with the way it is,” Hanoman told Stabroek News.
The CEO reiterated that the decision to close Wales was initiated by both management of GuySuCo and the new Board of Directors, chaired by Dr Clive Thomas. On Monday, the Agriculture Ministry released a statement announcing that Wales would cease operating by the end of the year.
According to the Ministry statement, the Wales estate is projected to operate at a loss of between $1.6B and $1.9B this year. With immediate effect, there will be no further land preparation and planting. As the estate’s cultivation is reaped, the land would be retired and kept for diversification ventures, the statement said.
The statement added that Wales, by far, is the estate in the poorest shape. The statement said that 60% of its drainage and irrigation infrastructure is run down while 75% of bridges are in poor condition. In addition, the cultivation is also in a poor state and the factory is old and requires significant investment.
The statement on the closing came as a surprise since the CoI report had not recommended the closure of any estate although Wales and Uitvlugt were seen as the two most vulnerable.
