With the sugar industry not being profitable anymore, Chief Executive Officer of GuySuCo, Errol Hanoman says it is best to have a smaller sugar industry with quite a significant diversification programme.”
Hanoman told Stabroek News in an interview on Tuesday that the diversification would be industrial as well as agricultural and questioned: “Why grow something [sugar] that is making thundering losses when we can grow something and make a profit?”
Major announcements by the government on the heavily indebted, cash-strapped sugar industry are expected before the end of the year. It is believed that the Rose Hall and Skeldon estates could face significant changes.
According to Hanoman, “What we have established is that there are a couple of estates that we can make profitable. But there are some of the others, no matter what you do, they can’t be made profitable… Over the years we have been denying the good estates investments to keep the poor estates going. So what we have done is a good job of bringing all of them down…”
He said too “when people write about saving the sugar industry, it is with emotional, sentimental position and they don’t have a clue about the economics of sugar.”
The CEO emphasized that “it is extremely difficult to make sugar production profitable” and opined that this is so because of the price for sugar and the anachronistic structure of GuySuCo.
To cut costs, he said, would mean scaling down on the workforce and noted “that is another issue but at the same time we also have to look at mechanization, a new technology so you need people with deep pockets for that.”
He said that “with the climate and the soil type that we have had and the loss of skills and experience over the years, we have been struggling to make mechanization successful.”
Speaking about the closure of the Wales estate at the end of this crop, Hanoman said they did not have the money to continue the operations there.
He said: “When we took the decision to merge Wales and Uitvlugt and to take the Wales cultivation out of sugar cane, it was driven by two main factors” the money and “we felt that we need to start seriously addressing the question of diversification.”
The intention is to develop at Wales a template for diversification, which, when the times comes could be replicated at other estates, he told this newspaper.
Preparations have already begun for the first diversification project and that is for the growing of seed paddy at Wales.
The feasibility study for the rearing of tilapia was expected to be completed in October but Hanoman said the consultant would be sending a preliminary report in a few days. The consultant has also advised that the study would be ready early in the New Year.
A task force from the Ministry of Agriculture had done studies on a number of activities and GuySuCo is waiting on that report.
Severance
When asked, he said GuySuCo did not consult with the sugar union; the Guyana Agricultural & General Workers’ Union (GAWU) during discussions with workers about their severance benefits because it had a process to follow.
He said GuySuco was ready to pay the severance but GAWU obtained an injunction from the court, which prevented them from paying. It was only paid after the injunction was discharged.
With regards to the other 1,600 workers who would be displaced, he said they [GuySuCo] have already started speaking to them and that Uitvlugt can accommodate a “fair number… [but] that is if they are willing to go.” They would also be given land to farm and would be part of the diversification programme.
Private cane farmers would now have to take their cane from Wales to Uitvlugt and GuySuCo is planning to construct a road to facilitate that process.
Funding for that has been an issue, Hanoman said, but the design has been completed and they have gone to tender. He hopes that the work can commence early in the New Year or until the weather is better.
Meanwhile, Hanoman said he would “like to see a transformation in the adversarial nature of the industrial relations (IR) in GuySuCo… and we are working on our managers to become more enlightened.”
He pointed out that in January or February of this year he had asked the IR team to invite the leadership teams of GAWU and the other union, NAACIE to have discussions with the leadership team of GuySuCo but the unions wanted to invite more people.
Among the topics that were slated for discussion was the planned closure of the Wales estate. GuySuCo had a “planned strategy on how to make the announcement” but the plan got “derailed because the information was leaked.”
He also informed this newspaper that at the moment, the European Union is using technical assistance funding to undertake cogeneration studies at the Albion and Uitvlugt estates.
The reports are due in May and he is confident that Albion would be a good candidate for a very successful co-generation project.
