IN THE past, GuySuCo operated as a country within a country, and thus most Guyanese outside of the sugar belt paid little notice to the internal affairs of that corporation, until it started drawing billions of dollars from the Treasury. Now that it is under the microscope, GuySuCo must shape-up on the little but very important things, such as its regulatory filings. GuySuCo is expected to be more transparent and accountable in how it spends taxpayers’ money.

I was advised that the last Annual Report for GuySuCo laid in the National Assembly, where the people’s representatives do the people’s business, was for the year 2009. So let me get this right: you took over G$23 billion of my money, plus I am the 100 percent owner of all of the shares in the company, but you cannot tell me in the National Assembly how you are running my company and spending my money? This nonsense has to stop!

GuySuCo was incorporated in 1976, and exists today under the Companies Act 1991. Under the Companies Act (Article 346), every government company is, by law, obligated to “submit to the National Assembly, not later than nine (9) months after the calendar year”, the auditor’s report. If GuySuCo was following the rule of law, then the 2014 Auditor’s Report ought to have been laid in the National Assembly. GuySuCo has not been following the rule of law! And the 2013, 2012, 2011 and 2010 reports have not been laid. Now let me be clear: I am not blaming the current Minister, Mr. Holder, since he inherited this mess from former Minister Ramsammy; but in management, we know that the monkey is now on Minister Holder’s back, and he has to own the process now to get this off his back.

To compound the eyepass for the National Assembly, I have been advised that the Office of the Auditor General has signed off on the auditor’s report for 2010, 2011 and 2012, so there is no excuse for lack of progress on this issue. How can such a large company with so many thousands of employees be so uninterested in following best corporate governance practices?

It is imperative that Minister Holder demand, yes demand, that GuySuCo get its house in order on this most elementary but fundamental act of corporate compliance. Someone in that company should be held accountable for this gross violation of the law and disrespect for the Guyanese people, especially when you have taken tens of billions of their money that could have been utilised paying teachers and nurses better wages. Such delinquency in corporate governance without a public explanation reflects an attitude of having no respect for the subject minister, the National Assembly, or the people of Guyana.

Now this SWOT Analysis

CO-GENERATION PLANT
The cogeneration plant fits directly into the operations of GuySuCo because of bagasse. It is cost efficient to use this waste product from the sugar mills to produce agro-energy and sell the excess power to GPL. So this is a great idea that should be expanded upon. So selling the Skeldon co-generation plant to GPL during the PPP term was an extremely poor idea.

As production and efficiency increase in the industry, there will be plenty of opportunities for GuySuCo to make valuable, new income from selling electricity to GPL. However, before this all makes sense, reducing the moisture content in the bagasse is mandatory before it can be transferred to the cogeneration plant to make top dollars for the industry.

Secondly, GuySuCo has to make its trash-recovery process more efficient, using greater technology. This will help to supplement the bagasse as fuel in the cogeneration plant without hindering the operations of the sugar mills. This trash- recovery strategy will definitely increase the volume of electricity sold to GPL, thereby expanding GuySuCo’s income stream.

In India, there is a new sugar mill design called the Compact Multi Roller (CMR) design, which consumes 30 percent less power compared to conventional mills. Much-improved mill extraction levels and a much lower moisture level in the bagasse are direct outcomes from using this technology. This is something that GuySuCo should seriously investigate, since it can offer tremendous benefits on account of the potential to substantially reduce the moisture level in the bagasse. Further, in India, it has been proven that the cost of adjustments to the mill using the CMR mill designs can be covered easily within two grinding seasons from the enhanced revenue, as a result of the greater efficiencies in the factory.

I strongly suggest that government asks the Indians to consider sending a few engineers to analyse this entire situation in conjunction with our local experts in the industry.

PACKAGING PLANTS
GuySuCo owns two packaging plants — a much smaller facility at Blairmont, with an annual capacity of 8,000 tonnes and the more modern facility at Enmore that was launched in 2011. The Enmore facility was rated at an annual capacity of 40,000 tonnes, but was reported to be capable of an annual production of only some 32,000 tonnes. These facilities are capable of producing Demerara Gold in 0.5 kg, 1kg, 5kg and 10kg packets, and even the 5g single-serve sachets.

In 2007, Blairmont produced 7,000 tonnes of packaged sugar. In that year, the demand for the product far outstripped the supply. Especially popular in the tourist destinations around the Caribbean was the Demerara Gold 5g single-serve sachet, which provided the greatest unit sale price compared to all other sugar exports. To give you an idea, Guyana can easily earn US$0.01 per 5g single-serve sachet exported, which translates into US$0.91 per pound. Compare that to the current export value earned for bulk sugar of approximately US$0.18 per pound. This comparison clearly establishes a solid business case for packaging over the exportation of raw bulk sugar.

GuySuCo needs to explain why, in 2014, it had not fulfilled its potential and exported 40,000 tonnes of packaged sugar in all sizes, from 5g single-served sachets to the 10kg packets. In the United States, the ratio between bulk sugar sales and packaged sugar sales is 70:30. Why could we not at least achieve a level of 20 percent packaged sugar sales from our production? These are the things that ought to come out of the Commission of Inquiry report (CoI), and it is hoped that the report clearly outlines the solutions on how to fix these challenges.

We will continue with the SWOT analysis next week.