Chief Executive of GuySuCo Nick Jackson says the new Skeldon sugar factory can be operational if the Chinese contractor, CNTIC fulfills its obligations but was not hopeful that it would be in a state of readiness for the first crop this year.
The single biggest issue at the factory is the bagasse handling system and not the low purity levels, Jackson said, noting that there are also problems with the shredder among other things. He told Stabroek News on Tuesday that “these are problems that can be fixed on the ground if the willingness to do so is there”.
Jackson said that he is not overly confident the new factory can be ready for sugar production in the new crop season based on the weekly progress report that is coming in, and also pointed out that CNTIC is yet to complete work in certain key areas of the factory. He said that GuySuCo has documented a list of the problems that are besetting the start-up of the new factory, which has been forwarded to the Chinese contracting firm, to be addressed urgently. The new factory was to be ready for the second crop last year in August/September but a series of problems was experienced necessitating the old factory being hurriedly pressed back into service.
An official of China National Technology Import and Export Corporation (CNTIC) confirmed on Tuesday when contacted that the local sugar corporation had passed on ‘a list’, and added that their current focus in on improving the factory and carrying out maintenance work during the out-of-crop season. The official said the factory had a fairly good month in December, but noted that a few things must be done before it is ready for handover. The new US$110M factory is a turn-key project and the government is yet to take possession of it from CNTIC as it wants to be certain that all of the commissioning problems are solved.
Jackson observed that very little activity is going on at the new factory at Skeldon now that the second crop has ended. He asserted that the kind of necessary work that is required at the factory is suffering because there are not enough people within the contracting firm currently executing.
“…we have suggested to them [Chinese] in the past that additional persons are needed on the ground to get the work done, but this advice has been rejected so the work is not moving apace as it should”, Jackson stated.
On the issue of the low purity levels, which had been an area of concern for CNTIC as confirmed by a source close the firm, Jackson said the levels would vary and reiterated that this is merely one of several issues that must be addressed at the Skeldon factory. But he stated that purity levels would be affected if the factory is generally not functioning as it should.
Further, Jackson spoke on the issue of a proposed management shake-up at GuySuCo, and noted that whatever happens is not likely to have any impact on the new factory coming on stream. He said any concerns being raised by the Chinese about the likely impact cannot be legitimate given that there is a binding contract that sets out what the obligations of both parties are. He added that Booker Tate is the engineer on the project and carries out most of the “police work on the ground pointing out what needs to be in place”.
Meanwhile, GuySuCo in a statement on Monday said that there had been initial start-up losses at the new factory, noting that the company budgeted around 35,000 tonnes of cane for such expected losses. The company referred to an article that appeared in the Kaieteur News on Sunday on the issue, and pointed out that the losses of US$3m incurred are not relevant as the revenue was never planned in the first place. GuySuCo said the insinuation in the article that it discarded 200,000 tonnes of cane which would equate to around 20,000 tonnes of sugar is totally untrue. The company said that only 80 hectares of cane had to be scrapped and that this equates to about 6,400 tonnes of cane, adding that the cane in stock that has aged would be carried over to the first crop this year.
Further, GuySuCo refuted claims that the punt dumpers are in the scope of the Chinese contract as stated in the newspaper article. The company said the dumpers were put out for public tender as the normal procedure, and that Honiron won the contract. Honiron had won previous contracts and supplied all the other existing punt dumpers within the industry.
“The contract was for Honiron to supply the punt dumpers and the Chinese contractor to install them. As such there is no need to consult with the Chinese contractor over the supply of the punt dumpers”, GuySuCo said in its statement. According to the company, the punt dumpers will undergo their performance trials in the first crop of 2009 along with the new factory. GuySuCo added that the American contractor has to carry out minor works prior to the tests. Additionally, GuySuCo noted that no maintenance work was carried out on the old factory at Skeldon during the mid year out-of-crop season as the new factory was expected to be fully commissioned in the second crop. It stated that very little money has been spent on the old factory since the construction of the new factory started; pointing out that it is a testament to the skill of the GuySuCo engineers that the old factory performed as well as it did when they were forced to use it.
GuySuCo said that it has been a very delicate balancing act to spend sufficient on the old factory to maintain it and keep it operating when a new factory was being constructed to replace it.
A few weeks ago, GuySuCo admitted that several factors have contributed to a very poor year for the company resulting in its lowest production level for many years, but it affirmed that the situation has not deteriorated to the point where it has to turn to government for funding.
Later, President Bharrat Jagdeo said the company has significant management issues that have impacted on the current state of the industry, and declared that a few changes are expected to be made within the company in the coming year.
