US$12.5M Enmore plant…Minister confirms only ‘excess’ sugar packaged
The story behind the operation of the Enmore Packaging Plant took a new twist yesterday, with the Agriculture Minister Leslie Ramsammy confirming earlier reports by this newspaper that the plant only operates when there is excess sugar.
“Our main contractual obligations are bulk sugar and therefore, the excess sugar that we have after our bulk sugar obligation (is) then sent for packaging,” Ramsammy said on a visit to the plant yesterday.
Following a Kaieteur News report that the plant was sitting idle while the Guyana Sugar Corporation (GuySuCo) met its bulk sugar demands, the Corporation had offered a different explanation as to why sugar was not being packaged.
Managers Yudhisthir Persaud and Akbar Ally had told Kaieteur News that the plant was out of operation because the sugar being produced at Enmore was meeting bulk export demands, the same as the explanation given yesterday by Ramsammy.
However, GuySuCo denied that the managers ever told Kaieteur News this.
GuySuCo claimed that the factory equipment underwent significant maintenance work during the last out-of-crop period and it is standard operating practice for a sugar plant of this nature to ensure that the first batches of sugar be directed to bulk (bulk is intended for re-processing) after a maintenance period (especially a major one).
This period allows for operational “fine-tuning” and to guarantee product consistency for direct consumption sugars required for the packaging plant, GuySuCo stated.
The Corporation said that it is on this basis that managers advised that the plant has been focusing on bulk production, but no such explanation was offered by the two managers.
The Indian company Surendra Engineering was paid US$12.5 million to build the plant, which was commissioned in May 2011.
At the end of August, GuySuCo had sought to deny that the plant was sitting idle while the Corporation tried to meet its bulk sugar demands.
Yesterday, Ramsammy confirmed that that is in fact what happens at Enmore, saying that at times only 50% of the sugar produced at Enmore goes to the plant for packaging.
“In the initial stages we take all our sugar and put it to bulk sugar obligations,” Ramsammy stated. Therefore, while that bulk sugar demand is being met, the factory is out of operation, sitting idle until it could get sugar to package.
The plant was designed to produce 40,000 tonnes of sugar annually, but yesterday Ramsammy said that was not an indication that the plant would actually produce that amount of sugar.
Ramsammy said that thus far, the plant has only packaged 10,000 tonnes of sugar for this year, and he could not immediately give the earnings from the sale of the packaged sugar.
Given that sugar produced at Enmore first goes to meet bulk sugar demands, the plant is not fed with sugar to meet the capacity it was designed to produce.
“The fact of the matter is that this plant is designed to produce at about 40,000 tonnes on an annual basis and can be expanded later to double that amount,” Ramsammy stated.
The Minister’s visit to the factory, according to him, was to “make sure the nation knows that the plant is a working plant”.
He said that while there were teething problems, as is the case with any new factory, “the plant is working to expectation and I want to make sure the nation knows….”
He said that GuySuCo strives to fulfill its contractual obligations for bulk sugar, which amounts to in excess of 200,000 tonnes, purely because of the money factor.
He explained that with bulk sugar, payment comes in immediately and that provides the cash flow for GuySuCo to continue operations. On the other hand, he said that payment for packaged sugar sometimes comes four months after.
However, because of the greater earnings with packaged sugar, Ramsammy said that GuySuCo would be looking to increase the packaging of sugar to meet market demands.
He revealed that the Demerara Brown Sugar brand, which is now only being sold in Trinidad, would soon be introduced on the local market. In addition, he said GuySuCo is currently working on introducing new products on the market.
Surendra Engineering just ended its responsibilities towards the plant, with the Defects Liability period ending last month.
Ramsammy said he has been assured that the factory “is working up to scratch”.
He asserted that the fact that the plant had problems should not “shock” anyone since this is typical for new factories.
The Minister noted that for new sugar factories, it could take five to eight years before problems are ironed out.