…to no longer provide health services
The Guyana Sugar Corporation (GuySuCo) will by the end of the year, close two more Sugar Estates, cut short its annual production and have the medical services it once offered be turned over to government.
Agriculture Minister Noel Holder made the announcement today (May 8, 2017) as he presented to the National Assembly Government’s State paper on the future of the sugar industry — billed as a draft white paper on ‘hard’ decisions to be taken in order to rescue the industry.
The factories identified for closure by the end of the year, according to Holder, is the Enmore and Rosehall Estates while the Estates on the East Coast Demerara have been earmarked for divestment.
Minister Holder said GuySuCo’s sugar operations will be limited to the Albion-Rosehall, Wales-Uitvlugt, and Blairmont factories with the aim of producing annually 174,000 tonnes of sugar.
The Albion and Rose Hall estate’s cultivation will be amalgamated, according to Holder.
Addressing the members of the House, including Speaker Dr Barton Scotland, the Minister spoke to cost recovery and saving methods to be employed by GuySuCo.
“GuySuCo as part of its corporate social responsibility operates a number of health care centers and dispensaries in the Berbice and Demerara Regions,” he said.
According to Holder, the options available to the corporation are the health facilities to the government or for the recovery of costs from the government.
Speaking to the ‘crisis’ in the sugar industry, the Minister said, “GuySuCo incurred total losses of G$40B with sales of G$230B from 2006 to 2015…By 2015 the management of the company had accumulated a mere G$11B in internal equity and had decreased working capital by G$25B.”
On the matter of the company’s employment costs in the industry, Minister Holder said this accounts for some 48% of the total costs of the company between 2010 and 2015 and absorbed some 73 per cent of the revenue earned by GuySuCo during that period.
“The dire revenue situation coincided with the loss of preferential markets and prices that the company enjoyed from 1976 to 2009.”
The Agriculture Minister told the House, the chronic problems in the industry ranges from the migration of skilled and experienced managers, exhaustion of its cash reserves, deteriorating field infrastructure and factories and an unstable and adversarial industrial relations.
Holder in making the presentation to the House said government has also begun inviting Expressions of Interest (EOI) for the divestment of the state-of-the-art, Skeldon Sugar Factory.
The industry, he said, had racked up a debt of more than $82B by the end of 2015 and that “the government owing to the industry’s ongoing financial crisis had to provide the required financial relief from the treasury…Within less than two years, government subsidies were estimated to be $32B.”
GuySuCo, he said, has faced many challenges over the years but was able to maintain an average sugar output of 328,000 tonnes annually until 1992.
Sugar production in Guyana fell by more than 18 per cent over the previous year and according to Minister Holder, “this poor performance follows a pattern of inconsistent output in which the average annual output of sugar declined by 14 per cent between 2006 and 2015.