The new Skeldon sugar factory has finally achieved its uninterrupted 72-hour trial run and has started to produce sugar of export quality but parliamentary Economic Services Committee member, Anthony Vieira is concerned about its cane supply and level of utilisation.
Vieira, who is also Shadow Agriculture Minister for the People’s National Congress Reform-One Guyana, told the media that the factory was designed to work at 350 tonnes per hour but was currently operating at 170 tonnes.
Vieira who accompanied Minister of Agriculture, Robert Persaud on a tour of the factory on Wednesday along with officials from the new board of Guysuco and members of the media, commented that while he was pleased to see the factory working it was being underutilized.
The minister had pointed to the challenges faced in relation to cane cultivation and said the chairman and the new management have placed emphasis on private cane farmers expanding. The minister admitted that a lot of cane is needed to supply the “massive factory” and said right
now the aim is to get up to 200 tonnes per hour and then ultimately to the full capacity of 350 tonnes.
Vieira pointed out that he did not think that it would start operating at the full capacity of 350 tonnes per hour until later in the year.
He said the factory would continue to grind at 200 tonnes per hour to replace the other factory so Skeldon cane “can come out of the ground because it is overrun…”
The factory had experienced hurdles with the start up and interruptions from poor weather but has already produced “several hundred tonnes” of sugar and finally started grinding on a continuous basis from 4 am on Tuesday.
Site representative from the contracting company; China National Technology Import and Export Corporation (CNTIC), Andrew Jin had said that the factory had originally experienced technical difficulties during the second part of the commissioning exercise, involving a 72-hour test run.
These involved problems of the interface between the punt dumper and the conveyor belt and problems with the shredder bearings among other technical difficulties.
He had said too that the contracting company was conducting assessments and remedial work and was working collaboratively with the engineers and employers to move the project to the next stage of the commissioning.
Jin had pointed out that major construction was completed in May and the commissioning began on August 26 with three dry runs. From September 9 to 11 the factory crushed a total of 2,000 tonnes of sugar cane but then ran into technical difficulties.
He told this newspaper that the defects were identified by Guysuco and had been rectified during the out-of-crop season.
He said rain was one of the major setbacks for the testing as the cane-harvesters could not have been used and there was a limited supply of cane.
Meanwhile Vieira lamented: “What I have seen is a brand new factory; I think that we all should be happy that we are seeing a brand new factory. I have never seen a brand new factory in my 50 years in the industry.”
Further he related, “But I will say this, the challenge, especially in the current heavy rainfall, the shortage of labour and the fact that this factory will require eight or 9,000 tonnes a day, I myself am not as optimistic, as I would like to be, that we could in fact provide it with that amount.”
He said last year ended with an annual average in the whole industry of US 22 cents per pound for sugar and the world market price is just about 11 or 12 cents.
“We have a long way to go to catch up with that,” he related. “So those are the things that are bothering me but I am seeing a working factory which is a huge improvement from before but I still have reservations about our capability to supply the cane.”
He noted that the concern for the private farmers to meet the requirement is now becoming clear to minister Persaud who he said has hinted that he may have to “take a hand in Guysuco and I think that may very well have to happen.”
According to Vieira, “I don’t think the farmers are capable of planting an area which is equivalent to the size of Skeldon before this expansion started. I think there has always been an unrealistic expectation…”
The minister had stated that if the private farmers do not come on board “as full as they should we are looking at other options which we wouldn’t speak about now.”
The farmers have to deliver 35% to 40% of the cane to the factory and the administration has worked with them very closely and “so far has no reason to question their commitment to the project.” According to him, the plan is to have the full supply of cane over a period of two and a half to three years.
With regard to the other estates, Vieira said those are also “badly down” and that during last year the average price for sugar produced at the LBI, Wales and Uitvlugt estates was US30 to 36 cents per pound. He feels that the new Skeldon factory would “do a lot to change that. It is very uneconomical in the Demerara estates…”
He said that even if the new factory produces cane at 4 cents per pound it would still not bring down the price of the national average of 7 or 12 cents per pound “which is what has to be done to compete in the world as it is today.”
Minister Persaud had told the media that the testing which started on March 6 would continue for the entire crop and would be monitored closely.
He said too that the old factory has already been put out of use and the new US$181M factory would be producing the Skeldon quota of sugar The minister had said too that the results received from the technical managers have been encouraging compared to the previous test in early
September. The factory has so far crushed close to 16,000 tonnes of
cane amounting to “several hundred tonnes of sugar in the bins” which
are of export quality.
The factory was supposed to have been in commercial production from
the second crop last year but missed that deadline and also the start
of this crop. Liquidated damages were then applied in this turn-key