The GAWU-GuySuCo meeting
November 23 2019
GAWU today said that GuySuCo has told it that it is planning for a new 55,000-tonne white sugar plant at Albion.
The sugar union said this was disclosed by GuySuCo at a wide-ranging meeting on Wednesday.
A statement by GAWU follows:
After more than a year of seeking to meet the GuySuCo about its plans to engender the viability of the miniaturized sugar industry, the GAWU was finally able to receive a presentation from the Corporation on November 20, 2019. The existence of a plan came to light following President David Granger’s address to the National Assembly in October, 2018. At that time, the President had disclosed that a plan was being developed. A few weeks later, Finance Minister, Winston Jordan informed the National Assembly, in response to questions posed to him, that a plan indeed had been formalized. Since then, our Union has been seeking to become acquainted with what the Corporation had in mind as it sought to put itself on firmer ground.
The GAWU had publicly lamented, over the last year, that despite several efforts, it was unable to meet officials of the GuySuCo on its plan. Apparently our continued insistence saw the Corporation’s Chief Executive Officer (CEO), Dr Harold Davis (junior) engaging a delegation from the Union. According to Dr Davis, the plan has been in existence since 2017 and it has been updated to reflect new circumstances. The GuySuCo Chief disclosed to the Union that the Corporation envisages investments in the fields to repair infrastructure and to further mechanization. He shared with the GAWU that substantial sums will be spent in the factories to repair and replace defective equipment and components as well as to upgrade them to produce higher-quality and better priced direct consumption sugars.
The Corporation’s CEO lamented that unlike other countries in the world, the sugar industry in the Caribbean does not receive State support. He shared that in Europe for instance, beet sugar production, which generally has a higher cost of production, farmers there are given significant support by their Governments to make them competitive and sustainable. In other countries, he disclosed various mechanisms are employed to protect their industries. In the region, he explained, though extra-regional brown sugar ought to attract a 40 per cent CET, importers are using innovative means to bypass the requirement and thus undermining indigenous industries. This matter, he informed, has been championed by the regional producers and COTED meeting, this week, decided to put in place monitoring mechanisms. The successful implementation of the mechanisms would allow for higher sales within the region. Dr Davis, pointed out, that there is significant scope in the region as there is a 200,000 tonne demand for refined sugar. This was also pointed out by GAWU during its ‘engagements’ with the Guyana Government on the future of the sugar industry.
According to the GuySuCo Chief, the Corporation envisages that by 2025 it would be producing some 160,000 tonnes of sugar. He shared they are positive signs and already their returns in the fields are above what has been anticipated though he cautioned that efforts must be sustained to realise the goals set. Dr Davis, on this score, did express his appreciation to the workers for their efforts. He shared that the situation in the factories has not been as positive and there is urgent need for capital investment to secure and consolidate the plants.
We learnt that the GuySuCo intends to construct a white sugar plant at Albion. A feasibility study conducted last year had found such a plant to be viable. At this time, the Corporation is in the process of inviting suitable firms to bid for the project. It is envisaged that the plant would become operable at the end of 2021. The recent decision of COTED to apply the CET on extra-regional refined sugar imports when regional production commences would assure a secured and lucrative market. The Corporation expects that this new plant would produce some 55,000 tonnes of white sugar per annum. Apart from that investment, GuySuCo will seek to construct a co-generation which a separate study had deemed to be a worthwhile investment as well. The sugar company expects also to transfer some aspects of the shuttered Enmore packaging plant to Albion to commence the production of packaged brown and white sugar at the location too. All the projects, we learnt, would be pursued concurrently and would be activated as they are completed. They are also plans to strengthen cane farming at the location while a section of the former Rose Hall Estate cultivation has been annexed to Albion to maximize production.
At Blairmont, the Corporation plans to expand the cultivation and to improve the capacity of the packaging plant at that location to that point where only higher-value direct-consumption sugars would be produced. A study will also be conducted to determine the viability of co-generation at the location, though it is felt from preliminary work that such an investment would be viable. At Uitvlugt, a co-generation feasibility study was found to be viable as well, however, this investment will be held off until cane production at the location can be improved. However, the Corporation intends to pursue packaging and bagging of sugar at this location. At this time, Dr Davis informed, there are discussions regarding a joint venture concerning with certain companies to establish a distillery at Uitvlugt or possibly at Blairmont.
Questioned about funding, GuySuCo informed that it is seeking to utilize the proceeds of the $30B bond secured by NICIL-SPU. It also is hopeful to approach to UN’s Green Climate Fund for support regarding the co-generation plants. The Corporation’s Chief did inform the Union that bond proceeds have stopped since June, this year. He did share that he is optimistic that the obstacles to access the funding would be removed in a short time and allow the company to pursue its plans in the shortest possible time. We did ask whether the proceeds of industry’s assets by NICIL-SPU were channeled to the sugar company and the Corporation shared that this wasn’t the case. The funding logjam, the CEO informed has prevented the company from planning properly and the matter needed to be resolved.
The Union pointed out that the success of the plan cannot be delinked from the workers who are very much distressed and troubled bearing in mind a freezing of their rates-of-pay since 2015. Dr Davis said he is not unaware of this and he recognised that people need better remuneration for the industry to go anywhere. He expressed the view that something must be done as he pointed out that the industry could not survive without its workers. The CEO said it is not a good feeling to being unable to pay workers and suppliers.
The GAWU while pleased with the engagement has sought to obtain a copy of the full plan. This will allow us to completely consider what the Corporation intends to do and assess the soundness of the initiatives proposed. We are hopeful that the plan could be soon be released to us for us to have a better understanding of the future direction of the industry.
