Signed in a blaze of publicity two years ago followed by the dismantling of the Enmore Sugar Packaging plant which is still to be reassembled, a planned machining investment has only now secured start-up financing and work should get underway shortly.
Source say that the Guy-sons and K+B Investments Inc. (GK+B) machining facility should commence soon as a US$2.5 million loan was recently approved.
When the project was announced two years ago in the presence of President Irfaan Ali it had been believed that financing had already been mobilized but this was not the case. This raises questions about whether there had been a careful evaluation of the project and whether the East Demerara Estate packaging plant should have been immediately disassembled.
Works at the facility had to be significantly scaled back to cater for changes to the packaging plant building and it is being retrofitted with a number of electrical and plumbing fittings, this newspaper understands. Last year a source had explained that “It is just the shell or the housing of the packaging plant remains there.”
Works were also stalled for more than a year due to paperwork which had to be completed, although the Guysons and K+B Indus-tries venture in the meantime continued to work and even expand their West Ruimveldt location, sources had pointed out. Those works are still forging ahead with pipes and fittings made daily to service ExxonMobil’s offshore project.
Sources close to the project told the Sunday Stabroek that accessing finance for the project here had been slothful and complex with the local banks, and the partners took the decision to take a US$2.5 million as a jumpstart, as work at the West Ruimveldt location was “bursting at the seams” and that “more space is absolutely needed.”
The Sunday Stabroek visited the location on Friday, and unlike other visits where the old packaging plant building was closed and the location was desolate save for the security and cows and other animals, the facility was open and persons were on location. Some cows still grazed in the yard.
This newspaper was barred from entering. The security explained that photos could only be taken from the gate, even as other personnel enquired as to the reason for the visit.
Around the back of the facility, that gate was also locked but two persons could be seen working; entering the building periodically and returning outside with objects in their hands.
A pathway was cleared for entry from the back gate also.
Ventilation
One source explained that additional investment sums had to be taken into consideration, given the packing plant’s ventilation could not be the same for the machining facility. Works to the roof and other upgrades and infrastructural works had to also be included.
Last November, a representative of the company had said that repairs were currently underway in preparation for the facility to be transformed to accommodate the machining project that Guysons and K+B Investments Inc (GK+B) say some $7 billion (US$35 million) would be invested in.
“Repairs are currently underway,” a representative of the company had said while informing that more comprehensive updates would have been forthcoming.
The GK+B development is one of the first projects to be assigned to the area as the government tries to find new business ventures as reopening of the estate did not seem to be on the cards..
At the 2022 February International Energy Con-ference, Guysons and K+B Investments announced their joint partnership, which President Ali had then said would create tremendous job opportunities for those laid off from the closure of the sugar estate. This estate was to be reopened by this government but plans changed.
“These are highly skilled jobs being created and the company has committed to commence that process almost immediately, to have the eventual 500 employees trained and ready to take up jobs in the company,” he said. This has not happened.
“We cannot be narrow-minded. I keep saying to every Guyanese, we have to up our level of thinking, [it] cannot be contained in a box anymore. It is a different era and a different scope that we operate in”, he said.
During the February 2022 signing, it had been said that Guysons Engi-neering and the United States equipment manufacturer K&B Industries had formed a US$60 million joint venture named GKB, a majority-owned Guya-nese company, back in 2020.
The public was inform-ed, via GKB’s statement, that the venture was expected to transform the packaging plant into a fabrication facility for the oil and gas industry. It stated that GKB had acquired the property at Enmore and would be plugging US$37.5 million ($7.5 billion) into the first phase, being a state-of-the-art Oilfield Services facility at the Enmore Packaging Plant.
The statement added that a minimum of fifty acres of land was required to effectively deliver Oil Country Tubular Goods (OCTG) & Premium Accessory Services to the oil and gas sector and for this, GKB engaged the government. The agreement with the government gave GKB access to 55 acres of land at Enmore. GKB had initially proposed a site closer to port facilities in Georgetown but later said it saw merit in the Government’s counter-proposal and recommendation of Enmore. The statement underlined that GKB’s lease is for the Enmore packaging facility, which is approximately 100,000 square feet, and not the sugar estate.
The government has never provided any information on the terms of the land transaction with the joint venture or what finances were accrued.
Financing was also not made clear by the companies, as what percentage of the stated investment sums that had to be financed through loans or other means was not stated. When the project was announced, it was believed that the companies had all the investment sums needed to be plugged in, readily available. The wait from local banks has now seen them accessing sums overseas.
This newspaper was told that the companies sought local financing for the project, and were “given the royal runaround from local banks.”
“You have a company that is producing, already has a ready market, has assets… for that matter a strong balance sheet and still the banks will have you waiting forever,” one source lamented.
“The access to financing issue here in Guyana is nothing new. The banks are just so reluctant to lend, even solid businesses, much less start -ups. It is nothing new…,” a private sector official noted.
However, banking officials pointed out that from the growing profits witnessed across the banking sector, this assertion was invalid. “Banks are in the business of making profits and that comes primarily from lending. Look at the profits of all of the banks for last year alone, you would see the exponential growth. Where do you think that money is coming from?” one official questioned.
“To get a loan from a bank you have meet all the regulatory paperwork… all your books and documents must be in order. Show me a company that brought their books, registration, taxes, insurance… and have the liquidity, and was turned down. Banks want to lend, the borrowers just have to meet the requirement,” a banking representative said.
“Banks are in the business of lending but the problem is being repaid. We are not reluctant to lend but are the projects viable? They have to be measured according to risks… I think the loans that are not approved are from just bad … projects,” another banking operative said.
Stabroek News last month reported that the packaging plant which was intended to be reassembled at the Albion sugar estate is still in mothballs. Only foundation works have been completed.
