…says locals to have ready access from GuySuCo

LOCAL manufacturers will have more ready access to white sugar from the Guyana Sugar Corporation (GuySuCo), as locally-produced white sugar is expected to add more value to the sector.

GuySuCo made the announcement on Friday while noting the concerns of the Guyana Manufacturing and Services Association (GMSA) which are relative to production and supply of white sugar (Plantation White) by regional sugar producers such as, GuySuCo and Belize Sugar Industries Limited (BSIL).

The GMSA’s rejection of a 40 per cent Common External Tariff (CET) on refined sugar reflects a “lack of depth of understanding” of the market requirements and classification of a range of sugars that are refined by annexing or standalone systems to sugar factories, GuySuCo said in a release.

Key findings of a study of the ‘Substitutability of Plantation White Sugar for Refined White in Industrial Processes’, done by LMC International on behalf of the Sugar Association of the Caribbean (SAC) in January, 2019, stated, “It is clear that a CET is required to sustain the sugar industry in the Caribbean. The current situation where the CET is applied to brown sugar only, has distorted the market, thus encouraging end-users to demand duty-free refined sugar even if it is not strictly required for their product”
Members of the manufacturing association were assured that GuySuCo and other Caribbean sugar producers have been addressing opportunities for the requirements of the Region’s industries in response to the major market adjustments that have arisen since the European Union (EU) announced the repudiation of the Sugar Protocol, which from October, 2009, removed price guarantees which impacted adversely on the sugar industry and markets of African Caribbean and Pacific (ACP) States.

“As shifts continue in the global, regional and local markets, GuySuCo has to become more and more flexible and agile and place more emphasis on the demands of the domestic industry,” said the corporation.

The corporation believes that the white sugar it produces will have to satisfy the quality requirements of all of its customers. Grades of sugar are produced in response to market requirements. Substitutes in the food industry have universally dominated market thrust, with the not so recent corn sweeteners which have been treated as replacements for sugar. This has not caused a reduction of quality of consumer food products.

The Inter-American Development Bank (IDB) 2017 ‘Latin America and Caribbean – Macroeconomic Report – Routes to Growth in the New Trade World’ stated that Latin America and the Caribbean have been hit by negative external shocks including declines in commodity prices and the rise in global interest rates.

“As negative external shocks reduce net income earned from abroad, countries …attempt to find new sources of foreign income, or rebalance their spending towards domestic production to maintain the same level of consumption,” the report stated.
The report further stated that import substitution exchange rate depreciation may also open up opportunities for local industry to substitute for foreign suppliers.
In that regard, GuySuCo decided to pursue the production of white sugar (Plantation White). It is also premised on the fact that as one of the largest businesses in Guyana, it is essential for the corporation to include into its reorganisation programme, factors to mitigate external shocks.

One of the concerns of the GMSA is the perceived potential loss of foreign exchange. From GuySuCo’s perspective, the ability of local manufacturers, as well as the country to save much needed foreign exchange, will be greatly enhanced since the local demand of 20,000 tonnes of white sugar can be supplied by GuySuCo.

The other 30,000 tonnes, of GuySuCo’s planned annual white sugar production of 50,000 tonnes, will be supplied to the regional market which will also save foreign exchange regionally.

In addition to the production of white sugar by GuySuCo as a value-added product, another benefit for the local manufacturers is reliability of the supply of white sugar.
As a part of its medium to long term planning, GuySuCo is maximising on Guyana’s geographic positioning, to develop its business to provide reliable brown and white sugar and molasses, even during periods of high risk in the Caribbean; as was seen in 2017, after the hurricane season, which saw local manufacturers being impacted negatively.
Plantation white sugar is an acceptable consumer quality sugar, and, like refined sugar, because of its high purity and microbiological stability, is one of the safest products on the market.

In fact, most of the white sugar that is deemed “refined sugar” imported extra-regionally from Guatemala and Columbia, and used by local and regional manufacturers, is actually Plantation White.

It is very important for manufacturers to note that neither sulphitation nor bleaching will be involved in the process of producing white sugar by GuySuCo.
Rather, GuySuCo would employ a re-melting process of sugar produced, that involves successive boiling and re-crystallisation with plantation white Sugar boiled from the highest purity of available ‘A’ re-melts.

Another key point, is that bottlers’ standards (Coca-Cola and PepsiCola for example) are different but not elusive, and GuySuCo will work with soft drink producers on the requirements of including in its processing, a decolourisation plant and corresponding equipment to meet those requirements. There is already a precedent from a successful collaboration with the Belize Sugar Industry Limited and the Coca Cola franchise in that country.