The Guyana Sugar Corpora-tion (GuySuCo) recorded an operating profit of $85 million in 2009 compared to the $4.5 billion operating loss it recorded the previous year, while cutting its loss before tax to $1.9 billion against the $6.2 billion loss recorded in 2008.
The Corporation, however, bears the burden of owing the Guyana Revenue Authority (GRA) over $2 billion in taxes. The entity is in the process of entering an agreement to pay the outstanding sum by 2015.
GuySuCo’s annual report for the year ended December 31, 2009, was tabled yesterday in the National Assembly. According to the document, sugar production for last year was 233,736 tonnes, which represented a marginal increase over the 226,267 tonnes recorded the previous year. Total land preparation and planting/replanting were 9,763 ha and 9,946 ha, respectively, compared with 8,135 ha and 7,985 ha achieved in 2008.
Last year was the first year of a turnaround plan crafted for the sugar industry by members of the corporation’s board.
In the Chief Executive’s Overview, former holder of the post Errol Hanoman said “the significant reduction in operating loss” reflected in part the considerable efforts made in the year to improve performance and reduction costs. “This performance improvement was achieved in spite of numerous challenges; wet weather conditions, continued during the first quarter of the year; the highest number of strikes in six years (229 strikes); there were considerable labour shortages particularly at the Demerara estates and the final EU price cut took effect from 1 October, 2009. The high loss of skills and experienced continued.”
Regarding the Skeldon factory, it was said that this facility is expected to steadily improve to achieve the design throughput of 350 tch by next year. Chairman of the Board, Dr Nanda Gopaul noted that while “the early expectations of the factory have not been realized…it is expected that the factory will be able to produce at its full capacity and efficiency level. “ According to him, “the numerous defects which have been identified have been or are in the process of being fixed.”
However, GuySuCo owes the Guyana Revenue Authority (GRA) amounting to $2,319,952, 485. According to the Acting Auditor General Deodat Sharma, “the GRA has accepted the Corporation’s proposal to discharge the liability over a period of five years (2011-2015).” GuySuCo has requested a waiver from penalties and interest payments, and this will be addressed in an agreement between the two entities. “The exact terms of this agreement has not yet been determined,” Sharma said.
Meanwhile, Hanoman said that co-generated power supply using bagasse increased in 2009.”However, power exported was lower than planned since increased power export was dependant on the commissioning of the 69 KV transmission line by the Guyana Power and Light Company (GPL).” According to him, this was expected to be done in the first half of 2010. “Negotiations with GPL on a Power Purchase Agreement progressed in 2009 and are expected to be concluded by July 2010 after which the approval of the Public Utilities Commission will be sought,” Hanoman said in his report.
Meanwhile, according to the Finance Director’s Overview, the Corporation benefited from the reduction in the price of some of its key inputs last year after there were steep increases in 2008 due to the global financial crisis. These key inputs included fertilizers, fuel, steel and freight.
The overview by the Finance Director also pointed to “two lucrative freight contracts” which were entered into for the movement of sugar to our European customer Tate & Lyle. The contracted freight rate was lower than what prevailed in the rising spot market and the benefit is expected to continue.
“For the fifth consecutive year, crop financing was obtained from ING Bank of Holland. The amount advanced of $3,000, 000,000 was fully repaid by the 31st December in keeping with the conditions attached to the borrowings,” the overview said. “Additionally a consortium of local banks continued to provide working capital which amounted to $3,100,000,000. A letter of credit for US$11.6 million was also established with the Bank of Nova Scotia, the review added.
Meantime, it was also stated that “by the end of the year the Corporation had reached an agreement with the Government of Guyana for the sale of land situated at Diamond on the East Bank of Demerara to the value of four billion dollars.” This particular transaction has been the source of much contention within the National Assembly with the Opposition benches arguing that there was some measure of illegality surrounding the transaction.
