We are six years late with ethanol

Dear Editor,

Well, well, President Jagdeo speaks again to save himself from himself.  I quote from SN of October 2: ‘If Skeldon Factory doesn’t work; sugar is dead – Jagdeo.’ Is our President out of sync with the realities of the world?  World grain prices have been rising again on a long-term trajectory, and this rise is credited mainly to the shortage of ethanol stocks which can be derived from cane sugar.  To further expand the demand for ethanol feedstock, the world’s largest consumers of ethanol, the Americans, have just approved an increase in the blending of ethanol into gasoline from 10% to 15%, which is on target to increase their demand for ethanol from 14 to 36 billion gallons by 2020.  Well the market has reacted to this by increasing the price of ethanol, since neither Brazil nor America can meet this demand and this is where the rest of the world comes in, including our very own GuySuCo.  The market feels the rest of the world is not committed enough to ethanol, so the price goes up.

In addition to improving the agronomic practices on all the estates at GuySuCo and the construction of the now infamous Skeldon sugar factory, the setting up of a bio-fuel industry to complement the cash flows of GuySuCo was vital five years ago.  We are six years late because vested economic interest and political cronyism stifled the development of the ethanol industry in Guyana.

Six years ago a company called Angostura from Trinidad approached this regime to build a distillery in Berbice, but with the caveat that they get exclusive rights to all the molasses produced in Guyana.  This regime agreed to this foolishness with no respect for the tried and tested traditional relationship between DDL, Banks DIH and GuySuCo.  That historical relationship always provided access to the best cut of the molasses to these rum manufacturers.  Who was this Trinidadian that could have destroyed DDL’s ability to produce its world famous rums?

The Executive Chairman in 2005 at Angostura was none other than Mr Lawrence Duprey, who was also the Executive Chairman of the CL Financial Group, the main shareholders of the now infamous Clico Trinidad which owned all the Clico subsidiaries in the Caribbean. Well DDL defended their rights and the Trinidadian suitor went away and is now permanently out of the picture.

However, since February 2007, BioCapital (the second largest bio-fuel company in Brazil) has expressed an interest to invest US$300 million in the ethanol sector with a proposal to develop a distillery with GuySuCo, but without the caveat that they must have exclusive rights to GuySuCo’s molasses.  At the around the same time, 10 other global companies from as far as India expressed an interest in setting up distilleries to produce fuel ethanol in Guyana.  The IDB even chipped in with US$1 million in grant funds to evaluate these proposals, but guess what?

The go-ahead was not given.

The PPP does not appear to be interested in protecting the interest of the thousands of sugar workers any more, and seems to have few qualms about taxpayers footing the bill for any financial fallout in the sugar industry. If there is a reason not to vote for the PPP and their candidate come 2011, this is it.

In my opinion the announcement conveyed in the article referred to above, that government is looking seriously at an ethanol from molasses project, is just another ploy to deflect blame for the state of the sugar industry from the PPP as they play politics with the lives of the hard-working sugar workers. Well it is wake-up time because the sugar workers are not paying attention to them any more.  Why do you think there is an artificial shortage of sugar workers in Guyana?

Yours faithfully,
Sasenarine Singh