Using ethanol to mitigate State’s fuel costs could kill rum industry

Jan 22, 2017 News

– GuySuCo’s CEO

The Board of Directors and the management of the Guyana Sugar Corporation (GuySuCo)

GuySuCo CEO, Errol Hanoman

appeared on Friday before the National Assembly’s Economic Services Committee (ESC), to deliver an oral presentation on the state of corporation and the industry.
During the presentation, GuySuCo’s Chief Executive Officer (CEO) Errol Hanoman, spoke about the diversification of the industry stamping out the once heavily touted production of ethanol as a means of mitigating the State’s fuel costs.
Back in 2013, the then Minister of Agriculture under the former regime – the People’s Progressive Party/Civic (PPP/C) – Leslie Ramsammy had stated that government was considering legislation to facilitate this initiative. Little is being said of this initiative now, despite the mammoth attention it received in 2013, including the negotiations between the State and 14 groups – inclusive of foreign entities – with the aim of inking a Memorandum of Understanding (MOU).
It was envisaged that the ethanol would be mixed with regular fuel.
Hanoman said that this would kill the local rum industry which remains heavily dependent on molasses provided by GuySuCo.
The CEO was at the time listing several measures that were suggested in the past to rescue the ailing sugar industry. The conversion of molasses to ethanol was part of that list which was deemed as uncompetitive based on a study, the CEO explained.
Meanwhile, Hanoman revealed some statistics with regard to the Corporation’s performance during the last few years. He stated that the company would have lost some $17.5B in 2014; $18.1B in 2015; and 12.1B in 2016.
Stressing that if GuySuCo is not restructured immediately, the corporation is expected to lose $13.7B this year.
“Of even greater concern, if there can be greater concern given those large losses, is the question of subsidies. In 2012, there were some subsides of $4B; $4B in 2013; $6B in 2014; $12B in 2015; $11B in 2016 and if there are no changes in the shape or form of GuySuCo, we’re looking at some $18.6B in 2017.
These massive plugs, the CEO added, do not take into consideration the servicing of debts.
“GuySuCo’s status quo cannot remain. Changes must take place in the interest of the employees of GuySuCo and the interest of the economy. While we argue that funds are needed to keep sugar operational, at this point in time, the way sugar is structured; it’s probably better applied producing more profitable products. Time is of the essence, and decisions are urgently needed,” Hanoman stressed.

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