GuySuCo’s rallying cry: Maintain, privatize and mechanize
For much of the period of the 2000s (and indeed for most of the presentation in this series of columns on sugar) attention has been chiefly directed towards the failure of the Skeldon Sugar Modernization Project (SSMP). This is to be expected, since by all accounts this project remains the main plank on which GuySuCo’s strategy rests for achieving its originally planned target of producing 450,000 tonnes of sugar annually. As readers are aware, the most critical component of this project is constructing a new factory at Skeldon. Although as I have indicated previously, the project is not simply confined to building a new factory at Skeldon, it is predicated on the view that factory capacity is the most binding constraint (or the main bottleneck) preventing the sugar industry from returning to sustainable profitability.
However, despite this, I am sure GuySuCo planners would be the first to concede there is no merit to expanding factory capacity (output or productivity) if there is an insufficiency of sugarcane grown for grinding and conversion into sugar. By parity of reasoning, the reverse also holds true. That is, it would be clearly pointless to increase the output of sugar cane beyond the efficient grinding capabilities of the available factory. This recognition leads to the inescapable realisation that, in order to raise overall industry efficiency (and thereby to reduce the unit cost of producing sugar), improvements need to be sought in tandem, for both cane supply and cane processing.
It is not generally recognised that this general strategy of GuySuCo has always been accompanied by what may be termed a ‘trio’ of supporting policies. The first of these derives from the consideration that because sugar production is an …..To continue reading, login or subscribe now.