Jan 21, 2016 News
…parts acquisition for 100-year-old Wales factory a major problem
Government yesterday defended the planned closure of Wales Sugar Estate, saying that it had become virtually impossible to keep the 100-year-old factory running.
Responding to questions during Government’s post-Cabinet press briefing, Minister of Agriculture, Noel Holder, said that parts for the factory had become very difficult to acquire over the years.
Efficiency was another problem- the factory is operating at only 50 percent of its capacity.
The decision to close the factory was announced this week, with Government saying that grinding will bon December 31, 2016. The 3,000 acres that Wales has not put under cultivation will not be used. Private cane farmers who contribute the bulk of the cane to Wales will then begin supplying Uitvlugt factory, another West Demerara estate that is modern and more efficient.
Most of the staffers will be taken on by Uitvlugt which has several openings available, Government said. A few workers will be made redundant.
But the closure has met with resistance from the Opposition with ex-President Bharrat Jagdeo and his party, the People’s Progressive Party (PPP) insisting that the decision to close the estate was a clear attack on PPP supporters.
Both Holder and Minister of State, Joe Harmon, said that the decision was one made by the Guyana Sugar Corporation (GuySuCo) and its Board of Directors and featured in the entity’s 2016 plans.
It had absolutely no relationship to the findings of the Commission of Inquiry of GuySuCo that was commissioned by Government last year. The report is currently being studied by a Parliamentary committee.
Yesterday, the officials said that it was intolerable to continue running the estate especially in light of the losses which are projected to be more than $1.6B this year.
It was stressed that private farmers, who supply the bulk of canes to Wales, will not be affected as these will be handled by Uitvlugt.
The arrangements as well as how the farmers will be taking the canes to Uitvlugt will be worked out in the next few months, Holder disclosed. It may even see farmers getting more for their canes as Uitvlugt ramps up its efficiency.
Yesterday, the Government officials also admitted that closure of Wales will not be dissimilar to the closure of Diamond and LBI- for efficiency purposes.
Cane workers from Diamond were working to supply LBI. Eventually, the LBI factory was also closed.
There are other adjustments currently ongoing throughout the industry to ensure that GuySuCo improve its efficiency.
Last year, with only a few months in office, the administration announced that GuySuCo has for the first time in a decade met its original production target. The absence of political interference was credited to the improvement.
Yesterday, Harmon said that he has not been approached by Jagdeo for a possible reversal of the decision to close Wales at the end of this year.
However, Government remains ready to engage the Opposition, the Minister said- once the recommendations are practical and not purely political and emotional. “… (It was) not a knee jerk reaction for political points.”
The recommendations from the PPP would have to take the interest of sugar workers at heart.
Minister Holder, when questioned, believed that the US$200M Skeldon estate which has failed to live up to expectations could have been done for a third less, from analysis done.
That Skeldon factory, commissioned in 2009 by Jagdeo, faced one problem after the other, despite being hailed as the saviour of the struggling sugar industry.
Asked about the long term prospects for the sugar industry, Minister Holder admitted that it is not good.
The industry just producing sugar can never be profitable.
GuySuCo will have to diversify- whether it involved selling extra power to GPL or other things, the industry has to diversify.
Holder said that it is a fact that while GuySuCo is losing on the financial side, it cannot be discounted that the big earnings in foreign exchange has been a boost for Guyana.
In addition, GuySuCo itself has been providing a number of other services to communities including drainage, health centres and maintenance of playgrounds.
Any decision about GuySuCo will have to consider all the factors in play, he warned.
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