GuySuCo heading to its worst production in history – GAWU

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See full statement from GAWU:

The GAWU among the matters it raised with Minister of Agriculture, Zulfikar Mustapha expressed its deep concern regarding the ongoing 2020 second sugar crop. The Union shared with the Minister that based on the emerging trend, the Guyana Sugar Corporation Inc (GuySuCo) would not be able to realize this year’s revised and lowered sugar production target.

To put the production into context, the sugar company at the beginning of the year said it would produce 114,162 tonnes sugar – 46,475 tonnes in the first crop and 67,687 tonnes in the second crop. The Corporation, in a press statement on July 27, 2020, admitted that it only managed to produce 37,015 tonnes sugar during the first crop, a deficit of 9,460 tonnes sugar. It sought to whitewash its failure by disclosing that it was unable to harvest some 66,000 tonnes of canes. That quantum of canes, based on the Corporation’s data, could have only produced 5,080 tonnes sugar. That information points out clearly, in our view, that the GuySuCo did not have the canes in the first place to produce and meet its first crop target and, we hold,that Corporation engaged in an exercise of deception.

Turning to the second crop, after some revision, the GuySuCo informed that it will produce 69,480 tonnes sugar. If GuySuCo’s data is utilized, the Corporation should have a second crop target of 72,767 tonnes sugar (67,687 + 5,080) however, the projected target is 69,480 tonnes or a reduction by 3,287 tonnes (72,767 – 69,480). While GuySuCo, may seek to offer an explanation for the variation, we turn to the present-day situation.

As at this morning (September 03, 2020), the industry for the crop, now in its fifth week, has produced 9,519 tonnes sugar of which 1,326 tonnes were produced in this current week. For the year, actual production versus estimated production is as follows:-

The Corporation’s major problem continues to be the lack of quality canes in its fields. Our information indicates that in as much as cane yields, expressed as tonnes cane per hectare (TcH), continues to be nearly at or above budget we see cane quality, expressed as the tonnes cane to tonne sugar (Tc/Ts), woefully under budget. As at last weekend, for the second crop, those parameters versus budget at the operable estates were follows:-

We believe the data is instructive and points out that, though, the Corporation is apparently producing higher quantities of canes; those canes do not have the sucrose content that is expected. At the end of the day, the company is in the business of producing sugar however, the data suggests that the cane crop has considerably higher fiber (bagasse) than normal.

Based on the trend observed over the last five (5) weeks, we have derived the following estimate:-

Should these numbers hold it would mean that GuySuCo would produce 77,878 (37,015 + 40,863) tonnes sugar for year 2020. To put this into context, Albion Estate in 2002 produced by itself 67,916 tonnes sugar. We are nevertheless hopeful that the situation can improve and improve drastically in the coming weeks. As we consider what is transpiring, it is apposite to point out that the canes harvested now, have been planted and nurtured in 2019 and first half of 2020. The fruits of those efforts are now being reaped. Clearly, it appears to us that there was inadequate or improper crop management for which detailed explanations must be provided. It seems to us that a lackadaisical attitude has percolated deep into the psyche of those charged with managing the Corporation.

That attitude seemingly continues until now since no estate has tilled even one square foot of land although harvesting operations are ongoing for one month now. Tilling and subsequent planting are critical operations for the industry to regenerate and produce cane and sugar effectively and efficiently. The absence of such crucial work either by design or accident tells its own tale and demonstrates that all is not well.

It seems to us that there is really no effort by the Corporation’s leadership to aggressively and meaningfully address the challenges. Rather it appears that the laid back attitude has taken grip in the organization’s structure because the perennial whipping boys such as strikes and bad weather are the identified causes for non-achievement of targets at end of crops. Clearly, as the data bears out, the problem is much more fundamental and there appears no emphasis to meaningfully address those realities but rather to engage in a vicious cycle which serves to push the industry further down the path of unsustainability.

 

It sadly brings into focus the commitment of those entrusted with the Corporation’s leadership, many of whom championed and enabled estate closures resulting in massive layoffs. Today, all the talk about a smaller, efficient and resilient Corporation stands nakedly exposed and is yet another indicator that those at the helm cannot be entrusted with the responsibility and authority to retrieve the company from its present morass.