Oct 31, 2016 News
Stakeholders in the sugar sector have their fingers crossed for a boost in the industry’s export earnings, with its breakthrough into new markets. These markets include Italy, Canada and the USA.
This is according to the Board Members of the Guyana Sugar Corporation (GuySuCo).
In 2015, the Corporation said that it continued to trade in the markets that it has been historically supplying with bulk raw brown sugar and direct consumption (value added) sugar.
The Board said that these markets remain a strong focus for the entity.
Additionally, the Marketing Department of the state owned company said that it continues to work with the Corporation’s marketing agent Czarnikow Group Limited to seek out new opportunities and markets worldwide.
This effort has led to the Corporation being able to enter into a new market within Europe, namely Italy, by supplying the customer with Demerara specials, packed in one tonne sacks.
This endeavor also enabled the Corporation to penetrate the Canadian marketplace with its direct consumption sugar. Also, the Corporation was able to re-enter the United States of America (USA) market last year with its branded sugar ‘Enmore Crystals’.
According to Chairman of the Guyana Sugar Corporation (GuySuCo), Dr. Clive Thomas, ‘Enmore Crystals’ is only being done in small quantities for the markets in Canada, USA and Britain.”
The GuySuCo Chairman said that the Board and Management believe that the packaged sugar will do better than “the ordinary sugar sold in the transparent plastic bag.”
He noted that samples are already being taken to the three markets he outlined, among other places where contacts are made.
Dr. Thomas said, “We are trying to penetrate the market with small quantities and build up as time goes. We are basically doing this to see how we can get a higher price for our sugar. And so far, it has been receiving favourable reviews from our international contacts, so we are looking to see how this works out but there are other plans in the pipeline for the diversification of this product and bringing the industry back to good health.”
The Economist noted that signs of good health in the local sugar industry are already being detected.
For years, the Guyana Sugar Corporation (GuySuCo) has been performing poorly.
Several sugar estates were failing to meet weekly and annual production targets, and the management of the State-owned company, among other factors, was blamed for the industry’s poor health.
However, Board Members recently noted that last year was certainly a period of “radical change” for the sugar industry.
Subsequent to the change in Government, and in recognition of the plight the sugar industry was in, the Board said that shareholders of GuySuCo appointed an Interim Management Committee (IMC) in June 2015 and a new Board of Directors thereafter.
The Board and Interim Management were confronted with many challenges, which included a weakened and demoralized management team, a very adversarial Industrial Relations climate, low sugar prices, declining production levels, high operational costs, serious loss making, a huge debt burden and consequently a major liquidity crisis.
The Board said, “It was evident that the sugar industry was in need of major reorganization; that it could no longer be business as usual. The Board and management team proceeded to develop urgently, a series of initiatives to arrest the situation while the elements of a longer term strategy were being contemplated.”
Given the gravity of the situation, the Board members reminded that the Government, in July 2015, appointed a Commission of Inquiry (COI) to look into the sugar industry, and make recommendations for its return to financial and economic viability.
The Commission Report was submitted to the shareholders in October 2015 outlining the Commissioners’ evaluations of the most economical options for the sugar industry to pursue.
The Board noted that the Commission’s main recommendation was that there should be no closure of any estate but that the Corporation should be privatized within three years. It recalled that other sections of the report pointed to diversification away from the reliance on sugar as an option.
Furthermore, the GuySuCo Board said that there were several initiatives identified in 2015 for implementation this year so as to reduce the operating cost, cash deficit, and/or generate funds for the Corporation.
They said that some of these initiatives included the merging of Wales and Uitvlugt Estates, transitioning the Wales cultivation from sugar cane to other crops and aquaculture, completion of the integration of the La Bonne Intention and Enmore Estates into the East Demerara Estate, relocation of the Information Systems and Head Office Departments from Ogle Estate to the former LBI Estate Compound, the sale of non / under – performing assets in particular lands, and the cost recovery of drainage and irrigation now benefiting external parties.
Additionally, the Board said that it was very encouraged by some of the achievements of the Corporation during the second half of the year 2015.
It said that the second crop’s production reflected a significant improvement over previous years.
Members said that there was a greater sense of purpose across the industry. However, the Board noted that the underlying and deep rooted problems remained which would best be addressed through the reorganization process. The GuySuCo Board said that a new strategic direction for the Corporation is currently being developed.
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