Many questions can legitimately be asked about the deal announced on Wednesday, February 16 for 55 acres of land at Enmore (part of the East Demerara Estate) and the much-vaunted sugar packaging plant which had been hailed under the previous PPP/C government as the lynchpin of the hoped-for industry turnaround on the East Coast and further afield.
First, given the enormous political capital invested by the PPP/C and its 2020 government in the sugar industry and its planned restoration one would have thought that there would have been far more information available prior to the decision even if it was not one that could be vetoed by any single stakeholder. There was, however, no such disclosure by the PPP/C government or its Agriculture Ministry – let alone discussion with the Enmore community – prior to this deal with a local machining company and its American partner.
A release on Wednesday from the joint venture companies, Guysons and K&B, operating as GKB gave the barest information. It had “acquired 55 acres of land” from the government at Enmore and that continuous growth could see “500 employees over the coming years”. Exactly which lands are these? Cultivable sugar lands? Aside from a statement by the joint venture that it was committed to retraining sugar workers there was no other mention of the industry and certainly not of packaging plant. To date, there has been no statement from GuySuCo on the taking over of the site of sugar packaging and for its part the Office of the President barely mentioned it a day later on its Facebook page.
Even the usually clued-in and close PPP/C partner, GAWU appeared completely blindsided by the events. After no doubt a day of deep cogitation it issued the following terse release on Friday, February 18: “Following the recent announcement that the Enmore packaging plant will be utilized towards the oil and gas sector, the GAWU has written the GuySuCo on February 17, 2022. Through our correspondence, we have sought, among other things, to address the employment of the 30-odd workers currently employed in the plant.
“We have seen, from media reports, that GuySuCo plans to operate the plant through some alternative arrangements. We, at this time, are seeking to learn of these arrangements and what the next steps will envisage. The GAWU is aware that the Company continues to utilize the plant as it repositions itself as a value-added sugar producer.
“The Corporation, in a brief response to GAWU, has indicated that it will soon engage the Union in respect of the impending changes. At this time, our Union anticipates an early meeting with the GuySuCo”.
There must have been a significant level of uncomfortableness in the ranks of the PPP/C over this deal for the East Demerara Estate (EDE) sugar packaging plant. After all, the investment of US$12.5m in the plant came under the presidency of now Vice President, Bharrat Jagdeo. When on May 9th, 2011 he commissioned the plant – built by Surendra Engineering Company Limited which was later to be accused of fraud by the Ranotar administration over the Specialty Hospital – Mr Jagdeo defended the continued investments in the industry. He said that “The sugar industry is vital to Guyana, we have to succeed there is no other choice” and predicted a brighter future for it under the Donald Ramotar-led government which was elected later that year with a minority in Parliament. Mr Jagdeo’s defence of the Enmore investment would have been conextualised by the earlier failed Skeldon Sugar Modernisation Programme he presided over.
Around 16 months earlier, on January 20, 2010, then Agriculture Minister Robert Persaud, performing the functions of Prime Minister at the time, had emphasised the importance of the Enmore packaging project. He stressed that government had invested $2.4 billion, which included assistance from the European Union, in the new packaging plant because of the intended impact on the industry. “We cannot supply enough packaged sugar,” he said, contending that there is considerable interest in it. Initially, the Enmore packaging plant was expected to package around 40,000 tonnes of sugar per annum and with a capacity to process 80,000 tonnes per annum.
That investment within a plan for wider recovery of the sugar industry has now been canned and must be considered a failure even when account is taken of the brutal steps taken by the APNU+AFC government in shuttering the East Demerara Estate and three others. The key determinants of the success of this project at Enmore would have been robust sugar output which had been in disastrous decline and the availability of premium packaged-sugar markets which have since grown scarce.
At this stage, it is not even clear whether reassembly of this Enmore plant is easily possible at another location as this has not been clearly addressed by the various statements since the deal was announced at last week’s energy conference and expo.
Clearly stung by the public backlash over the deal, Minister of Agriculture Zulfikar Mustapha journeyed on Friday to Enmore for a meeting with the employees of the packaging plant in the company of the Chief Executive Officer of the joint venture, Faizal Khan of Guysons.
Minister Mustapha sought to provide assurances.
“We are here today because many workers expressed concerns after they learned that this packaging plant will be relocated to Albion. We are exploring that option because, as a government, we want to consolidate, recapitalize and we want to ensure GuySuCo is an entity that eventually becomes profitable. Over the last 18 months, since assuming office, we’ve allocated almost $14 billion to this Corporation. We’ve also injected funds into the shuttered estates like, here, at Enmore…
“As faith would have it, we are now looking to divest and we’ve met with an interested investor and signed an agreement that will see GKB leasing this packaging plant and transforming it into a modern machine shop. I want to make it clear that the workers who are employed will be absorbed by the company. So, you can rest assured that your jobs will be secured. From the government level, we’ll also make two months’ pay available to you to assist with the transition,” Minister Mustapha said, according to a release from is ministry.
Aside from the assurance that the 30 to 40 workers at the plant would have jobs no matter what, Minister Mustapha also described the deal as a lease as opposed to the term “acquisition” which had been used by the joint venture to describe the arrangement. What are the terms of the lease?
The elephant in the room and missing from all of the public utterances by the government is the fate of the East Demerara Estate. Is this the end of the estate? Or will it still be reopened even though its key asset has been severed from it? This is an important question as President Ali’s party staked much in the frenetic 2020 election campaign by stating in its manifesto that the East Demerara, Rose Hall and Skeldon estates would be reopened. While there are some signs of preparation for this at Rose Hall there is nary a stir at Skeldon and the loss of this packaging plant would raise serious doubts about the fate of the East Demerara Estate.
As recent as June 10, 2021, Senior Minister in the Office of the President with Responsibility for Finance, Dr Ashni Singh restated the government’s commitment to reopening all three shuttered estates. Speaking on behalf of President Ali at the launch of the International Labour Organisation-sponsored study on the Socio-Economic Impact of the closure of the sugar estates, Minister Singh said that the Government was in the process of developing a master plan for each estate that will guide the future development of the industry.
“Among the elements that are being considered within this master plan is the redirecting of GuySuCo’s efforts towards an optimised product mix, moving away from the current low value bulk-sugar market. This is high on the agenda and it is anticipated that there could be a quadrupling in sales from (the) packaged sugar market both locally and internationally over the next five years. This would require the expansion of the Blairmont and Enmore Packaging Plants,” Minister Singh stated. This divestment has put paid to any such expansion at Enmore.
Interestingly, in this year’s budget, aside from stating that since assuming office the PPP/C Government had been proactive in focusing on reopening and recapitalizing the closed estates, Minister Singh made no mention of the shuttered estates though he did advert to “the possibility of engaging private investor interest … in some of the estates”.
In a statement on May 23rd, 2017 to accompany a large protest against the closure of the East Demerara Estate, GAWU had pointed out that it employed “some 2,200 workers and its operations support tens of thousands more.” So this matter doesn’t only pertain to the three or four dozen workers employed at the packaging plant but the 2,200, according to GAWU, who had jobs in that sector of the industry. So the question remains. Will the East Demerara Estate be reopened?
