The second sugar crop for 2015 officially ended on Wednesday evening with the Guyana Sugar Corporation (GuySuCo) achieving 231,145 tonnes of sugar, 3,702 tonnes more than its target of 227, 443 tonnes.
The second crop realised 150,007 tonnes surpassing the set target of 146,300 tonnes, breaking an 11-year period of a second crop not fulfilling its target.
Chief Executive Officer of the corporation, Errol Hanoman told the Government Information Agency (GINA) that such achievement has come about because the management team was very motivated and workers gave of their best and most importantly, the corporation was allowed to do the job without interference
“We have been allowed to manage. The management team focused solely on getting the tasks done, there were no distractions,” Hanoman reiterated.
The Coalition Government, cognisant of sugar’s importance to Guyana and the livelihoods of the industry’s 17,000 workforce, appointed a new Board of Directors to manage the ailing company, and instituted a Commission of Inquiry (COI) to look into the company’s operations.
The last time the industry achieved its production target was in 2004 when it produced 325,317 tonnes of sugar. This is despite the company over the years, consistently lowering its set targets.
Last week when the second crop target was achieved, Prime Minister Moses Nagamootoo had commended the workers and the management for their accomplishment, reminding that the corporation has to work on regaining it’s profitability.
Meanwhile, Hanoman said he is keen to begin working on next year’s target which has been set at 242,287 tonnes, a five percent increase over the 2015 target.
“My mind is now on 2016. We will be working to achieve 240,000 tonnes so we have to start refining our strategies to be able to be on top of our game. There will be lots of challenges, so at every level we have to go systematically to achieve the target, and so as we go into the new year’s production, we all know where we stand,” the CEO stated.
Debt
Hanoman told GINA that the company’s debt is still huge, standing at $78.6Billion, down from the $82Billion it had racked up by July of this year.
Going forward
But while it has achieved increased production, the company has to address its huge debt, and high production cost. Production is only one element to returning the corporation to viability.
Reminding of the two strikes called by the Guyana Agricultural and General Workers’ Union (GAWU), which affected the corporation attaining its sugar target earlier, he said, “We are looking forward to a healthy, constructive relation with all the unions. All of us are working toward the same goal of ensuring viability of the company and security of employment for the workforce.”
Minister of State, Joseph Harmon on Wednesday, speaking on the issue of viability, said that some estates may have to merge. Wales and Uitvlugt, the West Demerara Estates are two targeted for merging.
Cabinet on November 28, held a retreat, where members were briefed on the state of affairs at GuySuco, based on a detailed report from the COI.
Harmon stated that it was agreed at Cabinet that “because the industry is vital to many people whose livelihoods depend on GuySuco and also because GuySuCo is important to Guyana’s overall economy, that there is a need for much wider consultations, with all stakeholders and (the) general public, regarding the future direction of GuySuco.”
He noted that based on the nature of GuySuco and its great value, the COI’s report will be sent to the National Assembly for deliberations before any decision is made. The report of the COI will be put before the Economic Services Committee of the National Assembly next week .
Over the years, the previous government injected billions of tax-payers’ dollars into the sugar sector yet it remained in a dire state. The industry’s output over the last two years did not meet expectations. The 2013 production was a meagre 186,770 tonnes, and only a modest target of 215,910 tonnes was set for 2014. This is despite the industry receiving huge sums as bailouts.
The removal of preferential prices which African, Caribbean and Pacific (ACP) countries like Guyana enjoyed from the EU, worsened the corporation’s problems. Guyana has to compete in a volatile sugar market, where market prices continue to decline. Removal of the preferential market, therefore has forced GuySuCo to be more efficient, to remain competitive.
Meanwhile, with regard to sugar sales, Agriculture Minister Noel Holder reported on Wednesday that the world market prices impacted negatively in this regard. “This was very evident from sugar sold to the European market where the price received is very much related to the World Market Price. Sales of value added sugar increased significantly from 2014 levels and our presence was re-established in most of the CARICOM countries. Sales of our latest brand of package sugar “Enmore Crystals” which is aimed at the North American market commenced in 2015 in both the USA and Canada,” he explained.
Guyana anticipates export sales to the amount of 210,000 tonnes by December 31.
Production costs and wages
Apart from the rising production cost that GuySuCo has to battle, the issue of wages and salaries impact greatly on the corporation’s operating costs. Wages and salaries have accounted for about 65 percent of GuySuCo’s operating cost.
The sugar industry’s recovery will not be without many challenges and set backs however, the coalition government is adamant that it will do all that it can to return the industry to a viable state. It has said that sugar ‘is too big to fail’.
