Dear Editor,
In my last letter published in the Stabroek News on November 16, 2024, I opined that to properly assess the state of the sugar industry at the end of 2023, one must do so in the context of what was met in August 2020.
In August 2020, Rose Hall, a factory worth over G$10 billion was met in a shuttered state. From all observations in August 2020, it was patent that this factory was not professionally decommissioned. The factory was left to the elements which resulted in the rapid rusting and deterioration of this important state property. Several pieces of plant and equipment were in an advanced state of rot. Additionally, some G$3 billion in field assets including access dams, cane punts, field equipment (not one working tractor was available to the industry), and standing canes were found abandoned. Every movable piece of field equipment (tractors, excavators, Land Rover vehicles, cane loading machines, etc.) was cannibalized. Most of this field equipment was deemed permanently inoperable by the engineering professionals and therefore was useless to the industry; it was just plain scrap iron.
However, to understand how deep the destruction was at Rose Hall Estate in August 2020, one must understand the state of the entire business that we met at the takeover. The sugar industry in August 2020 had the following pertinent features associated with a technically bankrupt entity, namely:
• Declining revenues since the marketing approach was focused on dumping the production on the cheaper bulk market rather than doing the hard work of recovering the better-priced bagged and packaged CARICOM markets;
• Negative cashflows so much so that the employees were already waiting six weeks for their wages (the first act of the Government of Guyana was to release funds to pay the sugar workers their earned wages on August 10, 2020);
• A trade debt in 2019 that was 102% of the sugar sales which drove almost all of the suppliers to demand cash for all services rendered;
• Extremely low morale within the workforce (I was told by an Estate Manager just before I took over, it took some 27 pieces of communication, to get a hearing at the executive level to buy a chain saw and in the end, the decision was that he would not get the chain saw since there was no cash);
• Obsolete technologies and very aged machinery both in the fields and in the factories;
• Major supply chain challenges where no supplier trusted GuySuCo as a reliable business partner to provide critical input on credit;
• Extremely high migration of the most talented away from the industry;
• A mismanaged brand that was losing visibility leading to declining market shares in the higher-value markets;
• A culture that was resistant to adaptability to better techniques that were urgently needed to leapfrog into the future (such as the embracing of the Brazilian field techniques which was proven in 2023 to be more successful than the old system).
These are just a few examples of what my opening assessment found.
So today I want to start a conversation with Guyana as I narrate what I found in August 2020 and what we did together (my first leadership team included the following persons – Yudi Persaud, Vijay Gobardhan, Yudhistir Mana, Hutton Griffith, Threbhowan Shivprashad). They were subsequently joined by Fazal Bacchus. There were scores of others at a lower level in the management, who were on board with the new direction and strategy that culminated in the Board approved Strategic Plan (2021-2026). All the names above built together with me and persons like the Ramdeo Kumar, Abu Zaman and Alicia Rahim as strategic partners spent hundreds of hours on this Strategic Plan in order to present it to the Board of Directors. That document is still alive and relevant today but I am not sure if it is being followed. This can be a reasons for some inconsistencies today since the industry after the severe flooding was able to make 60,204 metric tonnes of sugar in 2023 and has enough cane in the field in 2024 to make between 70,000 – 75,000 metric tonnes of sugar. This was expected to rise every year, weather permitting, until it reached 130,000 metric tonnes in 2026.
Let me return to that first visit to the Rose Hall Estate, Canje. First off, the gates to the factory were padlocked with no security guards on site. The keys could not be found. A patriotic Guyanese who subsequently was re-employed at Rose Hall Estate came up to us and said he was the last man who left the factory when they were sent home. He took us to an alternative route to allow us to access the factory.
What we found was a factory, that had lost more than half of its value (later assessed as a 65% destruction). But under the leadership of Mr. Vijay Goberdhan, we assembled a team to start the de-gutting and rebuilding process as soon as November 2020. Three major sections of the steel roof had already collapsed leaving huge craters above the factory. This reality was an active contributor to the rapid deterioration of expensive factory parts. For example, the cane reception area was a “no-go” zone since it was a risk to life and limb as a result of loosely hanging parts and rusting steel. It was on the verge of collapsing. The once well-painted cane gantry was now heavily rusted as a crumbling relic, with its original form barely recognizable. The cane preparation area was left uncleaned as if the staff were halted in the middle of the grinding process and chased out of the factory. The cane knives were left to rust with the motors to drive these knives falling off their mounts as rust got the better of solid steel. Unfortunately, when I arrived at GuySuCo in August 2020, there was no exit report to be found in the system. Clearly all the impressions derived from what we saw and heard from the workers, it was as if there was a rush to prevent hard-working folks from returning to their jobs the next day.
The entire juice extraction infrastructure was welded together by chunks of rust between the roller mills. This forced the Government of Guyana to subsequently spend several hundreds of millions of dollars to rebuild every single one of those rollers overseas; before they could have been made usable again. Every single major process tank was in a state of advanced disrepair and most of them required extensive repairs and even replacement to make the factory functional again. From the juice tanks to the massecuite tanks, to the molasses tanks, to the clarifier tanks, and several other tanks in the system, they were all left to be beaten down by elements without the benefit of a roof, exacerbated by years of vine invasion that even penetrated their internal parts. All of that had to be fixed and repaired.
Some G$9 billion was spent rehabilitating the Rose Hall Estate factory, fields, and administrative structures in full compliance with a Government of Guyana policy in order to start that factory. This was money well spent since it injected a new socio-economic energy into the Lower Corentyne and the East Bank of Berbice area including New Amsterdam where more than 17,000 Guyanese directly and indirectly benefited from this Rose Hall project. I led a process at Rose Hall where we hired more than 200 persons within one day, a record hiring in modern-day Guyana with more than 40 of them processed medically and administratively and hired the same day that they applied for a job. In the end, the Rose Hall Estate provided some 1,400 new jobs for folks and provided them with new hope and they were still hiring at the end of 2023.
We found all the storage bonds from the chemical bond to the fertilizer bond in total disrepair with their respective rooftops collapsing. All these buildings had to be rebuilt. We found stray dogs and cows sleeping in the Administrative Building, where human beings once occupied as an office space in the past. That entire administrative building had to be de-gutted and refurbished at a cost of some G$60 million.
On the field, we found over 1,700 hectares of canes more than 12 years old when the average cane life should be approximately 5 years old before those fields are re-planted. These canes were superimposed by a daunting mini-forest and that exposed what really happen in the Rose Hall Estate fields. All that cane was lost to the elements without the Guyanese people ever being allowed to harvest the bounties from them between 2018-2021. The net loss from these canes not being ground at the factory was some G$991 million after fertilizer and other agriculture inputs were invested in them during 2017; all spending lost to the wind.
Editor, it was imperative to reboot the industry and implement the 2021-2026 Strategic Plan. In executing this strategy, programmed capital spending between 2021 and 2023 aggregated to G$16.4 billion. This spending can be substantiated by more than 101 pieces of new field equipment currently in place at GuySuCo, more than 400 brand-new cane barges (punts), more than 40 heavy-duty bridges, several chimneys were rehabilitated, all of the factory parts from the Rose Hall Factory were chopped out and repaired or replaced in total and the list can go on and on. I recorded all these details in my exit report that was left for the incoming Chief Executive and the Chairman of the Board.
In the end, in 2020, the incoming Government of Guyana found out that over G$60 billion in assets were lost between 2017 and 2020. Since August 2020, some G$16.4 Billion was spent to replace vital equipment that was lost or scrapped during the period 2017 to 2019. In the case of the Wales Estate, everything was lost forever. This story can continue for 50 more pages, but I thank the letter column for permitting me the space to at least tell a small part.
In the final analysis, context is everything!
Regards
Sasenarine Singh
Chief Executive of GuySuCo for the full years of 2021, 2022 and 2023.