… behind target by 41,000 tonnes
THE Guyana Sugar Corporation is behind its production target by some 41,000 because of rain, despite producing 45,000 tonnes so far for the first crop with six weeks of it left; but there is an eerie uncertainty as to what the May/June rains may bring.
This is according to CEO of the company Paul Bhim, who spoke to the Guyana Chronicle in an interview on Wednesday.
“The rains have come again and it is really hampering our production. We have not really moved on a lot further. We had the rains last week and every single cultivation was under flood conditions,” he said.
According to Bhim, the land was just beginning to dry off again when the rains came back. “It takes another day or two to dry out if the sun comes out. Therefore, the biggest problem is still the weather. We still have those canes to take off that we have projected. We might lose some of it now because some of our cultivation is still under water,” he said.
Bhim said that some of the canes might die, but “we have to quantify that after the cultivation dries out and we cannot do that at this point in time.”
He said initially the company had projected 138,000 tonnes, but noted that with the May/June rains, nobody knows. “If the rains come in the second week of May, then we are looking at the possibility of another six weeks of production. We are still hoping that we can achieve 100,000 tonnes or so on top of the 45,000 tonnes we have done so far,” he said.
“If the weather holds up and we can keep going, the canes are there. Our biggest problem is Skeldon and cane supply. Skeldon is heavily mechanised in terms of the field production. We depend heavily on mechanised harvesting,” he said.
“We cannot keep that factory supplied with cane by doing manual cut and load or cut and stack. It has been raining consistently in Skeldon and we have not done any mechanised harvesting there for about three weeks,” he said. Bhim added that the factory that is really behind is Skeldon, in terms of taking out the canes and producing sugar. “All our estates are behind in production, in total about 41,000 tonnes behind where we should be at this point in time,” he said.
As for the teething issues with the Skeldon factory, Bhim said that about 20 personnel from the Chinese contractor that constructed the factory are on location, working to fix the number two boiler that was damaged last year.
“We signed a contract for it to be repaired by the Chinese. They are dismantling the tubes from the old boiler in order to replace them with new tubes; and there are another 20 persons coming in probably within a week to complete the dismantling of the boiler and replacing the tubes. That is expected to be completed by the end of June, in time for the second crop at Skeldon. That work is ongoing and it is progressing fairly well,” Bhim said.
Asked about the company’s financial standing, Bhim said, “We started the year in a pretty poor financial state. If you recall we had $1B from the Government back in January, and we also got a working capital loan from Citibank for US$17M.”
He noted that those funds have assisted Guysuco in paying off all its overdue debts. “Basically, it is now a matter of producing sugar. If we produce the sugar, we will be fairly well off. If we produce 300,000 tonnes of sugar, we will be in a better financial position than last year,” he said.
The CEO noted that the money from Citibank must be repaid between September and December 2011. “It has allowed us to pay off the overdue debts and keep the creditors off our backs,” he said.
“We are progressing fairly well now because of cash, because we have shipped about 30,000 tonnes to Europe, and we have another 10,000 to go by next week; so once we can ship sugar, the financial situation will improve, but again it depends on our producing that sugar,” said Bhim.
“It’s the weather, nothing else. We have the machinery. Every time the sun shines, people come out to work so we don’t have a problem with that at all. We must make mention of that, and we have to thank the workers for that. I mean…who wants to go to work in the rain at 05:00hrs, when they have to go into the back dams?” he said.