Jun 08, 2014 News
Given its inability to pay the Chinese for the loan that built the Skeldon Modernisation Plant, the Guyana Sugar Corporation will not be pressed to pay the China loan.
According to President Donald Ramotar Government will pay China and GuySuCo will repay the government.
In any event, it is a government to government loan.
Ramotar, who yesterday held a press engagement at State House and updated the media on the state of the sugar industry among other topical issues, told media operatives that GuySuCo was obviously not in a position to pay back any loan for a while.
He did note that things are now turning around for the industry and according to Ramotar, “I am heartened by the performance of the industry at the first crop of this year.”
Ramotar said that he was optimistic for a better second crop also given the level of work that has been undertaken at many of the factories.
“I anticipate that we will have a much better second crop,” Ramotar said.
The Skeldon Modernization Project was commissioned at a cost of some US$200M in August 2009, and was hailed as the boon to the survival of the sugar industry.
However, the factory has been plagued by numerous problems and has not been able to function as was intended.
The Skeldon estate was designated to produce 110,000 tonnes of sugar per annum but the flagship estate factory’s production for last year was a mere 34,000 tonnes.
To date several million US dollars have been plugged into the factory which remains plagued with problems.
Meanwhile, as it relates to the US$95M that the revised 2013-2017 Strategic Turnaround Plan has identified as investment into the industry over the next five years, Ramotar said that Government would not be able to give that entire amount.
According to Ramotar, “We would be willing to support the industry as far as possible helping them wherever it’s possible.”
He reminded of the $6B subsidy that was approved for the industry in the 2014 Budget and said that “going forward we might need to help them again in the future.”
Ramotar noted that Government would also provide assistance in terms of helping GuySuCo find soft loans.
“The Government is fully behind the industry and we are going to give full support to GuySuCo,” said Ramotar.
GuySuCo’s latest strategic turnaround plan, which focuses mainly on mechanisms to increase production, reflects the need for US$95M for capital expenditure to improve operations and rehabilitation of the various factories over the next five years.
GuySuCo had at least two other turnaround plans before, none of which met their objectives.
The new strategic plan is said to be based on the objectives outlined in the original Strategic Blueprint and incorporates new initiatives put forward by estates and other key management personnel.
GuySuCo under the new Plan intends to convert to mechanically friendly layouts a total of 22,724 hectares of land by 2017.
This would not only help to increase production but would be a desired alternative as labour supply continues to dwindle.
Moves are also aimed at increased partnership with private cane farmers, especially at Uitvlugt Estate where this partnership commenced in 2013. This, GuySuCo said, would increase the amount of cane available to be processed.
The entity also plans to return to best practices.
The report states that drainage and irrigation will also be addressed and already established programmes to address such will be continued.
GuySuCo, in its report, said that these initiatives are expected to lead the Corporation to produce almost 350,000 tonnes of sugar by 2017, reduce the overall cost of production by 23 per cent, and return the Corporation to profitability in 2015.
The Plan assumes all eight estates and seven factories to be fully operational for the duration of the plan, all working together toward achieving the industry’s goals and objectives. Each estate management put forward their strategies for the improvement of their cultivation and factory.
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