One of the country’s leading rice millers has expressed intense interest in running the troubled Skeldon sugar estate, located in Corentyne, East Berbice.
While an official proposal has not been submitted, Nand Persaud and Company Limited, renowned for its Karibee rice brand in Guyana, the region and the US, handed in an Expression of Interest (EoI) a few weeks ago.
The company, headquartered in Number 36 Village, Corentyne, would be joining UK-based Tate and Lyle and East Berbice Development Association (EBDA), that have also expressed interest.
Tate and Lyle has been involved in the country’s sugar industry, not only buying the sugar, but in different levels of management in the corporation, in the past.
EBDA is a grouping of Berbice businessmen and farmers who have touted the idea of selling shares and running the various departments of the Guyana Sugar Corporation (GuySuCo) – which owns the Skeldon estate – as profitable ones.
Contacted yesterday, Chief Executive Officer of Nand Persaud, Rajindra Persaud, confirmed that his company is highly interested in Skeldon, following declarations of the administration that it is up for possible privatization.
“We believe that with our marketing experience, and that in logistics with field work and in dealing with farmers and packaging, that Skeldon can become profitable,” Persaud disclosed.
The Skeldon factory is a major pain for the administration and the previous one, despite being the newest kid on the block.
Commissioned in 2009 with an estimated US$200M spent on a new factory and bigger fields, the estate failed to kick-start the industry, leaving the previous administrations under Bharrat Jagdeo and Donald Ramotar, embarrassed.
The Coalition Government, under David Granger, has made it clear that the bleeding of the treasury by the loss-making GuySuCo, which demanded billions of dollars annually in bailouts, is unsustainable.
Despite strong resistance from the unions and People’s Progressive Party (PPP), which had built its support on sugar workers, the administration last December closed the 100-year-old Wales estate, citing a $2B loss that the facility would have racked up at the end of 2016.
Two more estates – Enmore and Rose Hall – are reportedly being considered for closure.
Skeldon, despite being the newest of the factories, faced major boiler issues this year, forcing GuySuCo to cancel its first crop.
Critical reports have pointed to several defects in other parts of the factory, that has been costing millions of dollars to repair.
With Government banking on the large chunk of foreign exchange that GuySuCo brings in, despite the massive losses and debts, there has been growing pressure for the Granger administration to find a local solution, instead of going with an overseas investor.
According to the Nand Persaud compnay’s CEO yesterday, he believes that his company with its years of logistical experience in rice, would feel right at home with Skeldon with its vast sugar cane fields. He said that it is a proposal at this time, with Government considering.
Persaud said that some of the ideas include using some of the vast lands of GuySuCo to plant a mix of cane and rice.
Nand Persaud recently struck a major deal with Cuba, impacting positively on the rice industry and exports, with the first shipments expected to start next month.
According to the CEO, his company is buying up all the rice it can get, processing over 80,000 tonnes annually – significant, as Guyana produces over 600,000 tonnes annually.
Karibee is selling not only in the region but in the US, with a major market in Queens, New York, where thousands of Guyanese live.
According to Persaud, his company’s experience in packaging and marketing is what will make Skeldon profitable.
“Currently, we plant very little rice. We buy from farmers. Our business is processing and exporting. We want to do the same with sugar. There is huge market for packaged sugar right here in CARICOM…the people depend on Central America for their sugar. If we can package, brand it and sell, there are huge possibilities. Our Demerara Gold from GuySuCo has tremendous potential.”
Currently, the Karibee brand is highly popular in Guyana, with Nand Persaud controlling more than 50 percent of the market.
“Our plan is to do business with more farmers. We are in the business of processing and we want to use the same model at Skeldon.”
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