— Sugar turnaround plan tabled
THE Guyana Sugar Corporation, faced with a $9bln a year loss in revenue from sugar sold to Europe, is cutting costs by some $3bln this year in a bid to ensure the survival of the crucial industry.

This was announced yesterday at the formal presentation of a detailed three-year action plan, designed to turn around the fortunes, of a sector also hit by steadily declining production since 2004 rooted in inefficient management and poor field operations, bad weather and other factors.

SUGAR TURNAROUND PLAN TABLED: In photo, from left, are Mr. Errol Hanoman, who took over as CEO of GUYSUCO in February this year; Agriculture Minister Robert Persaud; Chairman of the interim Guysuco Board Dr. Nanda K. Gopaul; and Director on the Interim Board Mr. Keith Burrowes. (Cullen Bess-Nelson photo)

Accepting the strategic blueprint from Dr. Nanda K. Gopaul, Chairman of the interim Guysuco Board which Cabinet appointed in February, Agriculture Minister Robert Persaud welcomed the cost-cutting move.

“Simply pumping cash into Guysuco is not a viable solution”, he declared at his ministry in Georgetown.

“Guysuco’s cost base is unaffordable — more so in light of the very significant reduction in the price of sugar sold to the EU market, which used to be our most lucrative market to ensuring our survival and ensuring the viability of the company”, the minister said.

He noted that from October 1, the corporation will see the full year effect of the 36% reduction in the EU sugar price which will amount to a loss of revenue close to G$9 billion per annum, adding “to allow the status quo to continue would destroy the industry.”

From left: Mr. Kenneth Joseph, General Secretary of NAACIE; Mr. Komal Chand, President of GAWU; Mr. Seepaul Narine, General Secretary of GAWU; Ms. Geeta Singh-Knight, GUYSUCO Board Member; and Mr. J.B. Raghurai, Agricultural Adviser and GUYSUCO Board member.

The proposals are to go to Cabinet and Persaud said these will also be discussed with all other stakeholders, including the unions and management.

Gopaul, said a major factor to help the corporation save the $3 billion this year is reducing cultivation costs per hectare, throughout the industry and recommendations have been made on community and health centres as well as rationalization within the industry.

“But more importantly, putting emphasis on production in the fields…productivity must be improved”, he reiterated.

Sugar production has declined steadily from just over 325,000 tons in 2004 to 226,000 tons last year.

Output this year was set at about 290,000 tons and Gopaul said while floods spawned by heavy rains in January stymied production, the corporation has introduced a new variety of cane, that can mature within nine months and this can keep the target on track. A better picture of production projections this year, should be available by the end of next month, he said.

The industry accounts for about 18 per cent of GDP, and the interim management team has been charged with carrying through on an action plan centred on increasing production.

Guyana has a market for more than 300,000 tons of sugar annually and Persaud had previously said that the EU is the premium market with an agreement for Guyana to sell to a European company at fixed prices until 2015.

The minister said the sugar industry is too important to fail but the government is confident about its future and “that confidence is what we are reinforcing here today.”

Mr. Errol Hanoman, who took over as CEO in February, said “We have got an awful lot of work ahead of us” but is “very optimistic that we are going to turn this industry around.”

He called on all stakeholders to function as one team, adding that there is a great will to make the industry succeed and major decisions have to be taken.

Gopaul stressed, that the plan to rehabilitate the industry, to put more land under cultivation and to ensure maximum yields also involves a battle against bad weather which wreaked havoc as late as January.

Targets set include a 20 per cent replanting this year and full or well over 75 per cent mechanisation in five years, when the industry is projected to reach a turnaround stage by producing around 400,000 tons of sugar annually and moving to an estimated 450,000 tons.

“We believe that the industry can survive, that it has a future in Guyana; it is necessary that that future be secured, because the economic well being of Guyana is going to be affected if the industry doesn’t prosper the way we anticipate”, Gopaul said.

He pointed out, that emphasis has been put on the management of the industry, since there has been some neglect at that level, and on reducing strikes. “There has been a major shake-up of the management structure and we are hoping, that we will be able to rationalize and build a relationship, which will allow for discipline, because we have to maximize on the opportunity days; we are losing more and more opportunity days due to bad weather and we can ill afford to lose opportunity days to strikes, especially when strikes are in breach of procedures, when strikes can be triggered by management inaction”. According to Gopaul, “the partners in the industry will have to work, to eradicate the level of strikes we have seen. The future of the industry is securing their future also and therefore, I have no doubt that they will want to ensure a success story so we will have to work together to eradicate those problem areas which bedevil the industry”,

Gopaul declared that , Managers are crucial to taking advantage of opportunity days and “we are going to hold (them) accountable and they must ensure targets are achievable and that the fields are not allowed to go into neglect”.

He said poor yields have also been aggravated by untimely application of fertilizer and lack of action to destroy rodents eating canes.

“Some of the managers have been disciplined, some have gone on retirement and others have moved to different jobs where their skills are best suited and there has been some degree of reorganization in the industry”, he noted.

The government, he said, is also moving to get younger managers on board by reducing the two-year period they currently undergo after graduating and going through the mill before they are put fully on the production drive.

Gopaul said the board has recommended that the period be cut to between six months and a year.

“It has not been an easy task and it is not going to be easy for the next three years, but I can assure, that if all goes well from then onwards and the plans as tabulated in the blueprint are introduced, we will see a bright future in the industry”, he offered.

Persaud said the antiquated and unaffordable cost structure of the industry has to be rationalized, “especially if we are going to survive the difficulties facing the industry and the uncertain global economic realities and the possible impact these can have on the industry.”

Productivity of all of its assets, including human capital, has to be significantly improved and the construction of a packaging and processing plant at Enmore has to be accelerated, he said.

Mr. Kenneth Joseph, President of National Association of Agricultural Commercial and Industrial Employees agreed there were some poor management practices and no proper policies towards moving the corporation forward.

He suggested that the interim board members should be retained to fully implement the action plan.

Other members of the Interim Board are Mrs. Geeta Singh-Knight; Mr. Keith Burrowes; Dr. Rajendra Singh; Mr. Donald Ramotar; Mr. Jangbahadur Raghurai; and Hanoman, an ex-officio member.