-with a view to address issues affecting the industry

FINANCE Director of the Guyana Sugar Corporation, Mr. Paul Bhim has indicated that the issues affecting the Guyana Sugar Corporation (GuySuCo) will be addressed with the upcoming review of the entity’s strategic plan.

He acknowledged that the current world price market for sugar stands at US18c per pound of sugar and that GuySuCo production cost averages around US35c per pound, with sales standing at US25c per pound.

However, Bhim pointed out that world market prices fluctuate and reiterated that the review of the corporation’s strategic plan will address the issues that are currently affecting its cash flow.
“The world market price fluctuates. A few days ago it was at US20c and a few years ago it was nearly US30c per pound…we are not unaware of what the issues are and we are working to address these,” he said.
The Finance Director also addressed the debt burden of GuySuCo, currently pegged at $42B, and stated that this is expected to be significantly reduced by the end of the year.
Of the $42B debt, some $23B reflects long term debt and $19.4B reflects short term debts of the corporation. With regards to the latter are: $2.7B owed to the Guyana Revenue Authority (GRA); $729M for the National Insurance Scheme (NIS); $1.4B for the Sugar Industry Labour Welfare Fund; a $3B loan from the National Commercial Bank of Jamaica to cover operating costs, and $2.5B for seven local banks. Among its long term debts are: $56M for the World Bank, $32M for the Exim Bank of China; and $24M from Caribbean Development Bank (CDB).
“We hope to reduce the debt very soon; reduce it by a lot by year end, particularly as we get into the second crop,” he said.

TURNAROUND NOT AFFECTED
According to him, while the debt, production costs and selling prices are challenges for the Corporation, these will not affect the turnaround of the industry.
“We have a plan for the turnaround and we have a plan to finance that turnaround,” he said.
Bhim noted that GuySuCo was able to surpass its first crop target of 74,000, by bringing in close to 80,000 tonnes of sugar.
He underscored the fact too that there are other challenges facing the Corporation, including, climate change, labour and mechanisation.
As a result of climate change, weather patterns have changed and are affecting the industry’s output; for example the industry was used to 120 opportunity days, but workers now have to make do with 80 or less days.
Relative to the labour issue, a decreasing labour pool, steps are being taken to move to mechanisation, which will not displace sugar workers, but address the issue of labour shortage.
GuySuCo’s Chief Executive Officer, Mr. Raj Singh, reiterated similar sentiments and made it clear that while the corporation has its challenges, these will not affect the turnaround of the industry.
Among the measures to be undertaken to ensure a turnaround of the industry, for which the allocation addresses are: increased production and lower cost of production; diversified target markets and expansion of value-added production in order to survive.
Additionally, a $6B allocation, in this year’s National Budget, for GuySuCo was approved by the National Assembly. The $6B is expected to cover expenditures that include: mechanisation, through the conversion of 2,500 hectares of land to be suitable for mechanical operations, which will be done at a cost of $1.1B; tillage and replanting of 9,200 hectares, both efforts being consistent with improving cane production and yield, which will be done at a cost of $1B; factory upgrading of all sugar estates, including Skeldon, at a cost of $2B; and works to field infrastructure to improve field to factory access and purchasing of equipment, excavators, bell loaders, tractors, etc. to account for the remainder of the allocation.
The sugar industry is projected to record an improvement of over 16 per cent in output to 219,000 tonnes this year. In 2013, sugar exports accounted for 8.3 percent of total exports valued at US$112.2M and the industry contributed 3.9 percent of the country’s GDP.

(By Vanessa Narine)