THE Guyana Sugar Corporation Inc. (GuySuCo) has been in operation since 1976. It has been the main source of income for lower to middle-class families along the years, birthing to many highly-educated professionals across Guyana.
GuySuCo is known for producing mainly sugar, along with such by-products as molasses, bagasse and the lesser-known filtered cake mud. It exports raw sugar in bulk, along with packaged processed sugar to the EU markets, the USA, and the Caribbean. The bagasse is used as fuel for the boilers for the factories as well as to power the national grid in Berbice, through the establishment of Skeldon Energy Incorporated, which is a co-generation power plant attached to the Skeldon Sugar Factory. Filtered cake mud is derived from the filtration process and treatment of the sugarcane. This is used as fertiliser in the cane fields, since it has minerals and organic matter nutritious to plants.
Over the years, many have seen the company declining in performance, and making constant losses. In 2015, when the APNU+AFC Government took office, four of the seven operating sugar estates, Wales, Rose Hall, Enmore and Skeldon, were closed. This was clearly a political decision, as the Commission of Inquiry that was conducted did not recommend the estates to be closed. However, what was not taken into consideration is the impact that these closures would have on the economy as a whole, despite not being profitable. These four estates were located in key areas of the country, where they were the main source of income for breadwinners in the communities.
No proper succession plans were made to accommodate these thousands of workers who had lost their jobs. Many would have seen the impact of these closures on the communities. The areas became isolated, squatting areas increased, small businesses closed, children dropped out of schools, increase in children begging along the roadsides, breadwinners committing suicide in instances where they were unable to make ends meet for their families, while at the same time, the crime rate increased. Many of these workers also had credit terms and loans to be paid off. Even though they received a severance package, it would not have been enough to maintain their lives for a long period, and since alternative employment opportunities were hard to come by, this just compounded the situation.
Based on an analysis carried out during the period 2015-2019, sugar production dropped by 60 per cent, and its target declined by 51 per cent. In 2015, the actual production was 231,145 tonnes of sugar, which was 5.1 per cent more than the target that was set of 219,913 tonnes. In 2019, the actual production was 92,232 tonnes, which was 13.8 per cent less than the target of 106,997 tonnes. The major cause of this drastic reduction in production in just four years is the closure of the four estates.
In 2015, the export earnings from sugar amounted to US$80.9 million, where 216,613 metric tonnes of sugar were exported to the EU and CARICOM markets. However, in 2019, the export earnings from sugar were US$27.8 million, with an export volume of 78,071 metric tonnes. This resulted in a 65.6 per cent decline in foreign exchange earnings, along with a 64 per cent decrease in production, which could have increased the country’s GDP.
As can be seen from the above analysis, even though GuySuCo was making a loss, the economy still benefitted from its production, and stayed afloat. Needless to say that a proper inquiry was not done for the company. The main focus should have been on how the company can be better able to improve to become profitable again, as can be seen in the step that is being undertaken by the current government.
Additionally, GuySuCo is not only important to its workers and export markets, but also to other local industries, such as the beverage companies. These companies need molasses and sugar, which are key ingredients of their products. Demerara Distillers Limited (DDL) is a major consumer of GuySuCo’s molasses. Due to the closure of estates in the last four years, DDL was forced to import molasses from countries such as Guatemala and Mexico among others, as the amount received locally from the Uitvlugt Estate was insufficient. This would have increased the company’s production costs.
Over 5,000 persons were jobless after the closure, and the majority of them have still not been able to recuperate. With the current government’s plan of reopening three of the closed estates, many jobs will be available, which will assist families in getting back their ‘good life for all’, which they have been deprived of for the last five years. The entrepreneurs in these communities will be able to reopen their businesses, and have the economy flowing again.
The new administration is taking many steps to turn the industry around, while understanding that the industry is in need of modernization, and to do so, investors are required. There are currently a few investors who have shown an interest in the company, and in the coming years, the industry will hopefully reinvent itself in ways which the previous administration believed was impossible. GuySuCo is also looking at new marketing strategies to increase their market share, and also revise their operational plans, which will assist the company in achieving their objective in moving forward for the benefit of all stakeholders.
Let us all look forward to a new and improved GuySuCo!
