From reading all the articles in the media about GuySuCo, one gets the impression that things are not right and rather than getting better, will only get worse. The latest article – SN 30/11/09 -“GuySuCo plagued by run down equipment – Interim Board.” I empathise with the Board as I myself went through a similar situation. As long as working capital is short, as in this situation, problems will arise, for example, poor morale and inefficiency leading to increased production cost.

At present, we are all aware of the many problems in the Industry. There is very good evidence of poor morale and inefficiency and definitely increased production cost and believe me, as time passes, the situation will only get worse.

I myself experienced a similar situation in the mid 1990s when rice price fell by 50% and my earnings from exporting 60,000 tonnes of rice dropped from US$20.6 million to US$10 million. Many millers are now out of business as they, like myself, had borrowed heavily to invest in plant and machinery. Fortunately, I managed to pull through with help from the Banks, Government and the sale of some assets. With the facility at Hampton Court, Essequibo, still in my possession, by renting and a joint venture arrangement that worked out, and although we are not back to 100%, things are much better.

So how do we solve GuySuCo’s problems? I suggest:

(A) Sale of assets.

(B) Become more efficient and reduce production cost.

Both of the above will increase productivity and working capital. But how can they be achieved?

Plan A is straight forward, while plan B can be tricky. For B, I recommend GuySuCo form alliances with capable companies and split GuySuCo into four distinct entities.

(1) Mill operation

(2) Field operation

(3) Machinery availability

(4) Administration-which includes marketing, training etc.

Definitely, I will spin off 1 and 3 and refine the present system to take care of 2 and 4. For one, what I saw at the Utivlugt factory last week is not far from disaster. The mere appearance gives one the impression of low morale, inefficiency and high cost of production. Form an alliance with capable companies to operate all GuySuCo’s sugar mill and pay them a fee for every tonne of sugar produced and implement a penalty system for non-performance.

For 2, what I know of the availability of production machinery is disastrous. One can see many different makes and models of equipment in GuySuCo’s parking lot. There’s need to standardise when purchasing new equipment. When I was operating at Blairmont, I observed brand new tractors and excavators and equipment just lying idle for days on end and much mismatching of machinery to equipment. I have been told once that all estates need the required amount of equipment as the season is very short and intensive work has to be done quickly.

I appreciate that, but if you were to get a private company to inventorise all GuySuCo’s equipment workshop capability, personnel availability and establish one machinery pool based at Rosehall, Canje, one can, with proper planning, make sure that machinery and equipment are always available to all the estates.

The Berbice bridge will definitely facilitate this, as equipment can be moved around very easily from Skeldon to Utivlugt. My gut feeling tells me that there is more than enough machinery in the system, but this is poorly managed. I have observed also that GuySuCo is advertising for pick-ups. This I think can be easily solved without much cost to anyone as it can be seen that many pick-ups in relatively good condition are parked in Ministries’ compound. They should be evaluated by a private contractor, repaired and made available to GuySuCo, thus preventing them from spending about $300 million in their acquisition.

We all agree that sugar, like rice, is very important to Guyana. Sugar is managed solely by GuySuCo and doing poorly. Rice is owned and managed by many and doing relatively well. So let us look at this model seriously.
BENI SANKAR