Guysuco hopes to make up for first crop shortfall in second crop

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…says on course to achieving 300,000 tonnes this year
The Guyana Sugar Corporation (GuySuCo) is on track for achieving its revised first crop target of 107,000 tonnes, as it forges ahead to breaking this year 300,000 tonne mark, for the first time since 2004.
This is according to Deputy Chief Executive Officer,  Rajaindra Singh, who spoke with Guyana Chronicle in an interview yesterday.

Singh said the last two estates – Enmore and Wales – closed their crops over the weekend, and to date, the corporation is accounting for 106,800 tonnes of sugar.
“We however still have to do our sugar declaration or sugar audit for the last two estates,” he said, adding that the final numbers from the audit are not expected to change much from the declared figures.
“We had set ourselves a revised target of 107,000 tonnes, so we are just about 200 tonnes off. There is still a certain amount of planting and tillage to do over the next couple of weeks,” Singh said.
He said that in terms of the second crop, “we had anticipated starting a few of the factories during the second week in July, and Skeldon is scheduled to start in the first week of August and Wales in the second week of August.”
He said, too, that Skeldon still has another four weeks of out-of-crop maintenance. This period, he said, is to sort out many of the issues that still plagued Skeldon’s production. “It is hoped that we would be able to maximise productivity there,” Singh said.
“We were targeting, at the beginning of the crop, 138,000 tonnes. Lots of people felt we were too ambitious, but we had the canes in the ground and had the weather permitted, we would have been able to take that crop off towards the end of April – early May, because we had the canes,” said Singh.
“We are still aiming for 300,000 tonnes for 2011. We are currently doing our second crop estimates, where the agricultural staff go to the fields and assess where we are. The forecast weather seems to be good, and if that prediction is correct, then there is no reason why we should not be able to claw back,” said Singh.
Raymond Sangster, Guysuco’s General Manager – Agriculture Services, said the company had set an initial target of 138,000 tonnes of sugar for the first crop. “We did close with close to 107,000 tonnes. The greatest shortfall came from Skeldon. We all know Skeldon is designed for fully mechanised operation [and] the weather pattern during the first half of the year was very unkind to Skeldon,” he said.
Sangster explained that normally, Skeldon would experience an average of approximately 1,400 to 1,800 millimetres of rainfall. “During the first crop which came to an end at Skeldon during the second week of May, Skeldon recorded 1,004 millimeters of rainfall. When we marry that to the long term mean of approximately 375 millimetres of rainfall; immediately you would recognize that the first crop at Skeldon was very wet. Because of the nature of Skeldon’s operation, whenever it rains, it is not possible to do mechanical harvesting.” Sangster said that out of the total shortfall of approximately 27,000 tonnes, Skeldon alone accounted for over 20,000 tonnes of this shortfall. He said that the company hopes to make up for the first crop shortfall in the second crop. “As long as weather conditions permit, and we could take up all the canes at Skeldon, our intention is to produce close to the 300,000 tonnes, which we targeted at the beginning of this year,” Sangster said.
As for supply of cane, this is being supplemented by private cane farmers and the bulk of them are located at Skeldon. “Skeldon has a total of over 2,000 hectares of cane farmers’ land under cultivation. Most of that land is designed for fully mechanised harvesting, just like the majority of Skeldon/Guysuco’s operations,” he said.
Sangster said that the farmers are also similarly affected in the first crop as was Guysuco, but fortunately for the farmers, the volume of canes under cultivation in the first half of the year at Skeldon was only about 25 percent of the total area. He said that the majority of lands under cultivation are for the second crop. “So in terms of areas not being harvested in the first crop for the farmers at Skeldon was very minimum, just 200 hectares that we were unable to take off for the farmers. But those areas will be harvested in the second half,” Sangster said.
Singh said that the company is still buoyant in terms of its cash flow. “Now that the crop has come to a close and we are in out of crop maintenance, we will have to be very careful in managing, because in the out of crop period [the corporation] does not earn,” he said.
Singh said that the corporation was able to send off a shipment of 5,700 tonnes over the weekend and the earnings from this, coupled with the financing from CitiBank will see the corporation in a comfortable position in terms of cash. He noted that the CitiBank financing was timely and has taken the corporation through until now. But he said the corporation must start repaying that loan in September, and it must be completed before the end of the year. Singh is confident that the corporation would be able to meet its obligations to CitiBank and other expenses.
“Once we can get to that 300,000 tonne mark, it would be the beginning of the turnaround in terms of the industry, including its cash flow situation. The last three years prior, we did below 250,000 tonnes. To break even in terms of cash flow, we have to achieve at least 280,000 tonnes. So if we can do that 300,000 tonnes, then we would be well placed to kick off for the next four years,” he said.
Singh said that most of the aspects of the turnaround plan are being delivered upon, although some of them are delayed for various reasons. “We are achieving in many instances,” he said.
On the new packaging plant at Enmore, Singh said that despite the unfortunate incident where a worker died following an explosion there, the plant is ready to go. “The contractor is currently working on that with some additional bits and pieces that they had to correct. We are still under the defects and liability period,” he said.
“Once the crop starts, that plant is going to be ready to go and we have got a commitment to doing, within a crop year, 20,000 tonnes through that plant initially, and I see no reason why we should not be able to achieve that,” he said. He noted that the sale of packaged sugar will assist the corporation in its revenue since the product is a value-added one which would be sold for more than the bulk or bagged sugar.
He said that the markets for now will be local and Caribbean. However, Guysuco will develop a new brand to target the US market, since current litigation precludes Guysuco from marketing its sugar under the brand Demerara Gold in the U.S.