Former GuySuCo Chair-man Vic Oditt says an alternative to the planned closure of the Wales sugar estate is turning it into a public company that could continue to cultivate sugar and make the needed investments to up the production.
Oditt proposed the formation of a public company during a Moray House Trust panel discussion on the closure of the estate last Friday, which also heard that the closure will likely attract significant costs, including at least an estimated $675M in severance pay to workers.
Since government announced the planned closure, it has generated a sea of criticisms. Hundreds of cane farmers and factory workers, it is estimated, will be directly affected by the closure.
Oditt, according to a statement issued by Moray House, proposed the formation of a public company, Wales Sugar Estate Inc. (WSEI), with shareholders including sugar workers, cane farmers, the public and the workers’ unions.
According to the statement, he said if one million shares were sold at a cost of $5,000, it would raise $5 billion in capital for the venture. Oditt told the audience, which comprised mainly estate workers, former workers, cane farmers and members of civil society, that the company would lease the estate, factory, lands and equipment from the government/GuySuCo at a rate of $1 per year for a 25 year period, with an option to renew it later for an additional 25 years.
He said the WSEI would not own any lands and therefore could not dispose of them. He explained that the company would continue the cultivation and production of sugar and by-products at Wales and also invest in field and factory equipment necessary to produce three or four times the 2015 production figure.
The statement added that Oditt, during his contribution, stressed that it is vital that field operations continue throughout this year so as to ensure that the estate remains functional. He pointed out that at present hundreds of workers “are turning up to work with nothing to do,” while at the same time noting that there is an 11-month variety of cane that could be planted and harvested at the end of the year to keep the workers active and the factory productive.
There was no government official or GuySuCo representative in attendance to hear Oditt’s proposal.
According to Moray House, in the interest of offering a plurality of views it had invited the management and board of GuySuCo along with several ministers and the private sector. GuySuCo was also offered a place on the panel. “The Trust was disappointed to note an apparent lack of willingness to engage, particularly on the part of those who hold public office or who are paid by the public purse,” the statement said.
Significant costs
Former GuySuCo manager Jairam Petam also spoke at the forum, where he noted that whatever transition is planned there are likely to be significant costs attached.
Petam, the statement said, raised the question of who would fund the development of cane lands into other crops or any diversification venture. He said that a conservative estimate of the cost of severance, based on 1,500 workers receiving an average of $15, 000 per week and with a service average of 15 years, would be $675M.
Based on the numbers cited at the forum, there are approximately 1,800 workers employed at the estate and about 800 private cane farmers farming at Wales. It was noted that these farmers account for over half of the estate’s cane supply and while yield from cane grown on the estate by GuySuCo dropped between 2008 and 2015, the farmers were able to increase their supply, which accounts for 51% of the total supply.
Accountant Christopher Ram, who was also in attendance, was quoted as saying that there was no apparent economic assessment of the closure as the sugar industry Commission of Inquiry dealt with a financial assessment and projections. He pointed out too that sugar industries worldwide are subsidized, so that the world market price is not a “true comparison” for what it costs to produce sugar anywhere.
Meanwhile, also speaking at the forum was Derrick Venture, of the La Retraite/Stanleytown Cane Farmers’ Association, the largest farming unit in the area, who voiced concern about the proposed plan to have canes transported to the estate at Uitvlugt for processing. He alluded to the fact that this will give rise to major obstacles, including the double handling of the cut cane and the loss of sucrose content in the cane.
Venture said that in a letter he wrote to President David Granger, when news of the closure was made public, it was indicated that cane farmers had the ability to take over the entire sugar production at Wales in time.
The statement added that Mark Khan, a plant foreman at the estate, was adamant that the plant was in good working order. He said that information being circulated in the media and to persons that the plant machinery is “old” is misleading. He explained that with the exception of the Skeldon, all estates have machinery that are over half a century old. He noted that sugar estates are built to remain operational for hundreds of years.
Inviting anyone to take a tour of the factory to confirm what he was saying, he noted that a “steam test” done recently showed that the plant was in good shape but was in need of some parts.
Khan, according to the statement, also used the opportunity to remind all that he and many of his fellow workers had mortgages and other financial commitments and that these “cannot simply be suspended indefinitely.”
Government on January 22nd announced its intention to close the Wales Sugar Estate, the first major decision it has taken on the beleaguered industry, which has seen slumping production over the last decade and severe debt.
According to a statement from the Ministry of Agriculture, the Wales estate is projected to operate at a loss of between $1.6B and $1.9B this year. It said with immediate effect, there would be no further land preparation and planting. As the estate’s cultivation is reaped, the land would be retired and kept for diversification ventures.
Government has said the Wales operation was not feasible and plans are in the pipeline to cushion the impact of its closure.
Sugar workers countrywide have made their position known that they are in solidarity with those at Wales. There have already been a number of protests and strikes.
