Private sector can be mobilised to put together company to buy sugar estates

Dear Editor,

I have noticed that the government mentioned that it is still to make a final decision on the closure of more estates. It, therefore, suggests that this is not yet a closed deal.

Simultaneously I have seen the Private Sector registering some grave concerns and at the same time proposing to buy some of the estates.

I have read the grave concerns of Demerara Distillers Limited (DDL) in relation to the availability of molasses, the main raw material for its core product, rum.

With all of these legitimate positions by various entities the industry can be saved from closing and made profitable again. The Wales Estate can go back into production as well.

It is my view that the Private Sector can be mobilised to put together a new company to buy estates that the government does not want to hold on to. Two of those companies, DDL and Banks DIH Limited can benefit tremendously if this industry is allowed to continue. I say “allowed to” because I am convinced that the industry could be very profitable and can continue to make a great contribution to our country as a whole.

If they could be persuaded to take the lead in creating a new company to take over the estates, that would be a major step forward. The rest of the Private Sector can also be part of this new venture.

If the more recognized private sector companies want to be conservative and don’t want to put all the capital needed at the start-up level, they could also make shares available to the workers, the Unions in the industry and the public at large.

We still have in Guyana a considerable amount of skills and experience in the sugar industry. If this initiative is pursued quickly those skills can be retained to help manage this new company. If it is not done soon most of those technical skills and managerial experience will migrate and can be lost to our country.

Already Guyanese are playing vital roles in the Jamaica Sugar Industry as well as in the US and further afield. We can harness them here and allow them to save this industry once given the opportunity.

The industry is not difficult to turn around. It can be done with good management, which it did not have since 2015. The government hired persons who had no interest in making the industry profitable.

Before the infrastructure in the industry is broken up completely this initiative needs to be pushed now.

As I have said over and over many new revenue streams can be established and the industry can be made very, very profitable. Already, the programme to transform the fields into more machine-friendly layout has started. At Skeldon estate it has gone a far way. At Enmore estate some 80% of the lands are already converted for more machines-friendly operations.

While this process is going on, the productivity of labour has gone up by use of cane loaders.

The industry can have a distillery, a plant to produce ethanol; a sugar refinery and more cogeneration plants, to name some additional products. Its by-products can help create other factories.

Already, one company was using its bagasse to produce bio-degradable containers, for example, food boxes.

A lot of cost-cutting measures can be applied. Liquid fertilizers can be used and that will bring down our import cost greatly. Bagasse could be compacted and replace wood in starting up the factories. Another huge cost benefit. This was already tested and proved hugely successful. It was done together with scientists from IAST.

Such investments in the industry would pay great dividends in a very short period of time.

Providing resources to sugar should not be seen as subsidy. Indeed, it is an investment. The industry can be made very profitable.

The government will benefit a lot from such an initiative. From the point of view of the economy it would create considerable employment, both traditional and for new products that can be done. With more employment much more disposable income would be available to power the economy. The industry is a net earner of foreign currency, therefore, the economy would benefit from having a stable exchange rate. Since our import bill is big, a stable exchange rate would keep inflation down something that all government throughout the world towards achieving.

Moreover, businesses in the society that supply steel and other material would grow and be able to employ more people. This means more importation of goods that are unavailable locally for the industry and more customs revenue for the government.

Over the centuries the sugar industry has proven to be very resilient. This is not the first time that it has been in crisis. But it always bounced back stronger. This can happen again, if the regime thinks and involves others instead of throwing in the towel after the first punch.

Yours faithfully,

Donald Ramotar

Former President


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