-aims to slash costs by $3b this year
The GuySuCo interim board yesterday submitted a five-year plan for improvements in management, significant cost cutting measures and maximum productivity in the field to lift the country’s key foreign exchange earner out of a production slump.
Nanda Gopaul
Chairman of the interim board, Dr Nanda Gopaul handed over the document billed as “GuySuCO’s Blueprint for Success” to Agriculture Minister Robert Persaud and expressed hope that the successful implementation of the plan will see production at the sugar company increase to approximately 450, 000 tonnes of sugar annually at the end of five years. The document will now be considered by the President, Cabinet and other stakeholders.
The handing over of the proposal comes approximately three months after the company was placed under new management. On January 14, Agriculture Minister Persaud, at a joint press conference with Head of the Presidential Secretariat Dr Roger Luncheon, announced the management shake-up that saw the longstanding Booker-Tate management contract end and the installation of a new Interim Board and Chief Executive. Gopaul was appointed interim chairman in the place of Ronald Alli, while Errol Hanoman was appointed the new Chief Executive of the company replacing Chief Executive Nick Jackson who stepped down to take up a new position in Swaziland.
At that press conference Persaud said that the interim board would produce the blueprint within a month’s time. Persaud said yesterday that the initial time line of one month was perhaps unrealistic given the amount of work that needed to be done. He said, however, that he was always in contact with the board during the time the document was being prepared.
Speaking at the handing over ceremony yesterday, Gopaul, one-time General Secretary of the sugar union NAACIE, said that strong emphasis needed to be placed on management and called for maximum use of the “opportunity days”. He said that part of the way forward was to reel in the amount of strikes in the industry. He said that frequent strikes only put the future of the industry at risk in addition to that of the employees. He said that various changes have already been made to ensure greater management efficiency and called on all the stakeholders involved, including the unions and workers to ensure that strikes were kept to a minimum.
The Chairman said that plans are on course to make up for lost ground as quickly as possible. He said that during this year, the company’s management is hoping that there is a 20 percent replanting exercise all geared at mechanizing harvesting and after five years to have the at least 75 percent mechanized if not all. By this time, the Industry should have arrived at its turn-around state, Gopaul said. At the end of this period, Gopaul said that the sugar corporation would reach a production level of 400,000 tonnes of sugar and move towards 450, 000 tonnes of sugar.
Robert Persaud
The Chairman also said that training of personnel was also an important factor that needed to be done. He said that government would be emphasizing the training of persons in the sugar industry. This was also stressed by Minister Persaud.
Persaud said yesterday that “the Industry is at the crossroads” and stated that major decisions have to be made “to ensure its survival and return to profitability.” He emphasized that “simply pumping cash into GuySuCO is not a viable solution.” He stated that the company’s “cost base is unaffordable more so in light of the very significant reduction in the price of sugar sold to the EU market.”
The Minister suggested that greater challenges await the industry and said that 2010 will see the “full effect of the 36 percent reduction in the EU sugar price which amounts to $9 billion.” He said that “to allow the status quo to continue would destroy the industry.”
He stressed that “the reduction of cost through increased productivity and elimination of wastage and corruption is of paramount importance.” According to Persaud, he has been informed that the Strategic Plan reportedly looks at options to cut costs by $3 billion for this year.
Meanwhile Persaud emphasized that while the intention is to “mechanize” and “semi-mechanize” the industry, this does not mean that sugar workers will lose their jobs.
He explained that while machines will be used, the workers will still be needed and that there is no fear of retrenching or widespread job losses. He said that in fact moves will be made to expand the industry and this would have positive repercussions such as larger areas coming under cultivation.
Chief Executive of GuySuCo Hanoman in his brief remarks underscored the importance of team work. He said that the workers, unions, management and all the stakeholders had to work as a team. Hanoman stated that a lot of work needed to be done and emphasized that major decisions have to be made in relation to the company.
Meanwhile, GAWU President Komal Chand and General Secretary of NAACIE Kenneth Joseph were both present at yesterday’s meeting and both expressed hope that the plan will lead to an improvement in the struggling industry.
Finance Minister Dr Ashni Singh in his budget presentation in February had emphasized the revival in the country’ sugar industry as being key to the country’s economic stability during the year. He said then that the turn around of the industry depended significantly on the successful implementation of the board’s blueprint. Singh projected a sugar production level of 290,000 tonnes for the year, which is the same as was predicted for 2008. However, last year the country fell short of its target badly, only producing 226,267 tonnes, which represented a 15 .1% decline from the 2007 output.
Gopaul yesterday did not comment on the production targets for this year but said by the end of next month the management will be better able to pronounce on its production target for this year. He explained that steps are being made to make up for lost time and this is being carefully monitored.
The new state-of-the-art factory at Skeldon has posed start-up problems which have prevented GuySuCo from grinding the amount of sugar projected. Liquidated damages are to be applied against the Chinese contractor CNTIC for the turn key project.
Does this plan contain anything different from the various plans of the 1990’s?
Guysuco has never been short of plans and ideas (until recently maybe) – the hurdle has always been executing those plans.
Goals like “replantling 20% of the land under cultivation annually” has been a routine budgetary target for the past 15 years at least – but rarely achieved.
What would be interesting is – what does the blue print have to say about HOW the objectives will be achieved. What will be done differently to acheive different results?
Sugar sells for 13 cents on the world market, residing in Guyana’s backyard is Brazil the world’s largest exporter, their cost is about 10 cents in some regions and as low as 5 cents in the south/central region. What is Guyana’s cost?
Brazil produces 30 million tons, that is 20% of global sugar production.
Brazil exports 17.7 million tons, that is 39% of global sugar exports.
Cuba exports 1.3 million tons.
Robert Persaud admits that ‘“the Industry is at the crossroads” and stated that major decisions have to be made “to ensure its survival and return to profitability.”’ He then blames the EU stating that the company’s ‘“cost base is unaffordable more so in light of the very significant reduction in the price of sugar sold to the EU market.” He further suggested “that greater challenges await the industry and said that 2010 will see the “full effect of the 36 percent reduction in the EU sugar price which amounts to $9 billion.” He said that “to allow the status quo to continue would destroy the industry.”’
“He stressed that “the reduction of cost through increased productivity and elimination of wastage and corruption is of paramount importance.”’
The Minister has finally come around to accepting that the industry which Cheddi and the PPP cabal used to their political and wealth advantage is about to crumble under their management, under a PPP government. There is a saying in Guyana that goes like this: easy lesson good fuh dunce. Well, the Minister and his colleagues are now giving easy lesson to the Guyanese people.
This sudden change of tune by the PPP was expected but not so soon. They were warned about the plight of the Sugar Industry but pinned their hopes on the new state of the art facility in Berbice. The tune then was that with the increased efficiency of extraction by the new factory Guyana would do better than its CARICOM counterparts where sugar is concerned.
This complacency is really going to be costly in the long run and yet again,the poor will have to pay. The current state of affairs can be laid squarely at the feet of our leaders .They have showed a lack of foresight and stubborness typical of an administration that ignores advice except those coming from its own political quarters.
… all indicators point to the discontinuation of the sugar industry in GUYANA from as far back as when Cuba harvested a crop of 10 million tons of cane !… that aside ,, with Brazil production figures in the global market ,, it is visionless to even contemplate any high tech production of cane sugar ,, in GUYANA ,, where our sugar production is tied to the EU as a foreign exchange earner ! diversification of the sugar industry in GY should have been the first priority of the PPP in 1993…
this act tho ,, would not have helped to keep their power base in tact ,, so the stupidity continued to where it’s at now ,, there is a whole bunch of products that could be farmed since most of the employees of GUYsuco is of an agriculture base ,, and from these products can spinoffs be achieved and with state of the art packing presentation and marketing ,, the sky is the limit ,, one of these many products is pumpkin ,, our mangoes have restrictions to this USA market ,, i have bought and drank
mango juice imported from EGYPT !…. mango trees produce at 5 years i think !!!!!!!!!!
it’s less drudge than cane harvesting and with the research on the benefits of mango juice it can be very competitive in any market any place on the planet ! anyone who has lived in europe can tell how the natives crave exotic foods ,, that is very scarce ,, and very expensive ,, no vision ,, no development to suit the global trend of meeting the demands of the 21st century !!!!!!!!!!
This is plan is in the same likeness as the proposal that President Jagdeo give to the RICE Farmers of the MMA– turn to Aquaculture.
It is like the Plan that the PNC handed to their Industry –the Bauxite industry–which now is nonfunctional.
It is defintely the same plan President has been handing to UG(via Dr.Gopaul) for years—look at UG.
It is defintely the same plan that PPP handed to IAST.
Friends and fellow Guyanese both the PPP and PNC are un- developmental mode of thinking and it is called Jaganism—it been like this for 41 years—unless we all make sure they are prevented from entering government there would be relief from this misery.
Image telling Rice farmers of the MMA they should turn to Aquaculture–sign of things to come
The sugar industry started to crumble under PNC after nationalisation..
Re: “The sugar industry started to crumble under PNC after nationalisation’!
Are you “nuts”!
… is the truth only told by those of us who is legally sane ????????????????????????????????????????????????????
or only by those who is “nuts” ????????????????????????
How about asking surviving and past Members of the Guyana Defense Force (GDF) what “sugarcane field experience” they have had! That’s where some of the destruction started; and, find out who were some of the people responsible for those destructive actions.
Who cares who it started to crumble under?
You think Obama comes to work everyday and goes hmmm screw this economy fixing business I didn’t screw it up bush did or lincoln did?
PPP brainwashing apparatus have got these people completely stupid
Take a look at some who will be able to bring changes to “GuySuCo” and “Guyana” on the whole folks:
http://www.pmtcalumni.org/classnotes.htm
Watch that “Little Ship” in which those future “Masters” are presently sailing to the rescue.
Don’t give up the “Mother Ship”!
Guess what East Banner your ppp has fully embraced the PNC nationalization you see them running to sell any of the government owned entities that are losing money?
17 years now what have they done?
Once again the worse sin ever for Guyana. Putting politicians to prepare a company’s five years strategic plan. It will only work on paper, in the real world the targets set will never be achieved. Time will tell. The real problem with all these plan is implementation and monitoring. No one once to be critical about themselves so even when the review is done the public don’t see it. This is another step to win vote in 2011 and another way for Robert to demonstrate his MBA. During the MBA program they thought us project implementation and monitoring, lets hope he remember that at the end of every year. They also thought us how to be critical about ourselves.
GWI did a similar thing when they terminate Severn Trent. They called it the Three years “Turn Around Plan” Close to two years has gone and the company probably turned only 10 degrees.
Lets wait and see what will happen with this one.
The sugar industry is the backbone of the PPP. The sugar industry employs more Indians than the entire public service and bauxite mining operations employ Blacks.
It is by no means a coincident to save it at any cost. It is the core and future survival of the PPP.
The math and economics, regardless how bleek and cost ineffectiveness it is, the sugar industry is owned by the PPP. It is the only guarantee of the future suvival of the PPP.
Time to call it a day and sell GuySucko, Government should not be running large corporations (into the ground).