Nov 23, 2016 Letters
Within recent days there have been quite a bit of tit for tat between the current and immediate past government, intermingled with a plethora of press statements and commentaries by GuySuCo and the sugar Union GAWU, as to who is responsible for the current sordid state of affairs of the sugar company. These arguments, mud-slinging and vitriolic statements and commentaries will not help to rescue an ailing industry or assuage the going concerns of the sugar workers on the future of their livelihood; they only add to their woes, confusions and distress. What seems not to matter most to the government, opposition and GuySuCo’s senior officials is the fate of 18,000 sugar workers and their families. When employment opportunities diminish by the day, where will these displaced workers go? The current exchanges focus, among others, on whether Booker Tate is responsible for the run-down state of the sugar industry. To determine whether this British-based management consultancy is responsible, let’s look at some statistics and be the impartial judge. I hold no brief for Booker Tate or any political party; it is just to put this seemingly contentious matter into a proper and sensible perspective, and use it to advise those who are willing to listen on the progressive way forward. Booker Tate’s services were solicited by the Desmond Hoyte’s government to manage the sugar industry after the most dismal performance was recorded in 1990, when 130,000 tonnes sugar was produced. They assumed responsibility for the management of GuySuCo in 1991 until their contract was terminated by the previous government in 2008.
In between 1991-2008 the average annual sugar production was 267,400 tonnes. The cane yield measured in tonnes cane per hectare (TCH) was 69, and the average cost of production was about US$0.24 per lb. Local management took over the management of the company from 2009 to-date. The average annual sugar production from 2009 -2015 was 220,400 tonnes, cane yield 59 TCH and cost of production almostUS$0.40 per lb; an annual decline from the Booker Tate period by 47,000 tonnes sugar or 18% per year, cane yield by 10 TCH or 15% and cost of production increased by US$0.16 per lb. Herein lies the core of the issue. The increase in the cost of production is just what the approximate price of sugar is on the world market; about US$320 per tonne.
If the volume of sugar production and the cost of producing it are used to determine the success or failure of the sugar industry, the decline of the sugar industry, therefore, cannot be attributed to Booker Tate, but to local management. The ownership of the decline has to be attributed to the three Chief Executive Officers who held the helm of the company from 2009 to date: vis-à-vis Errol Hanoman, Paul Bhim and Rajendra Singh. During Bhim’s tenure the company recorded its lowest production since 1990 when 186,000 tonnes were produced in 2013, and from media reports it seems that 2016 will be lower than 2013 production under Hanoman. It must also be borne in mind that in 2014 the company reported to the Economic Services Commission that it had incurred an overall debt of $58 billion. A built-up of the current $90 billion debt started then.
The common denominator from the time Booker Tate demitted office to-date is agriculture management. The head of this department was responsible for agriculture management from 2009 to date, and overlooked the perpetual decline in cane yield over the years; with the worst being 53 TCH in 2013. Editor, unless cane yield could be improved to an average of 70 TCH, there is no way this company has any hope of a turnaround where sugar production is concerned. Its fixed operating expense is way too high; as such, the only avenue of lowering its high cost of production to competitive levels is to improve on land productivity and cane yield, but it appears the company is not focusing on the right and core priority. Lastly, if media reports are accurate that Booker Tate was the designer and project manager of the Skeldon Factory, then it befuddles any logic as to why they were legally exonerated from a US$200M bungling-up.
Selwyn R. Narinedatt
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