….Agriculture minister says $$$ will set Guysuco on road to profitability
By Svetlana Marshall
Just three months after the House approved $3B for the ailing Sugar Industry, the People’s Progressive Party/Civic (PPP/C) Government is back in the House seeking approval from the National Assembly for another $4B for the Guyana Sugar Corporation (GuySuCo), and according the Agriculture Minister, Zulfikar Mustapha, the funds will help the industry return to profitability.
The $4B forms part of a Supplementary Provision of Current and Capital Estimates totaling $17.4B the PPP/C Administration is seeking to approve using its one-seat majority in the House.
On Monday, when the Financial Paper was tabled, the main Opposition – the A Partnership for National Unity + Alliance For Change (APNU+AFC) – grilled the Agriculture Minister on the last minute request.
Shadow Agriculture Minister Khemraj Ramjattan grilled Minister Mustapha not only on the intended purpose of funds, but why the Government waited until the eleventh hour to request additional funds. Couldn’t the monies have been included in the National Budget passed in September? Opposition Shadow Minister of Agriculture, Khemraj Ramjattan questioned.
In response Mustapha said the supplementary funds will be used to execute “critical” capital projects across the industry. He said the three estates in operation – Blairmont, Albion and Uitvlugt – are operating at a 60 per cent capacity, and as such, there is need for re-capitalisation to achieve 100% capacity.
Of the $4B being sought, $2.1B has been budgeted for the Albion Estate while approximately $518M has been set aside for the Blairmont Estate. The remainder will be spread across the other estates, and GuySuCo’s Headquarters.
The minister noted that works are currently ongoing at the three of the estates – Rose Hall, Skeldon and Enmore – that were closed by the APNU+AFC Administration, with the intention of having them reopened. He boasted that already 1000 of the once sacked sugar workers, have returned to the factory and fields and another 3,000 will be hired in 2021.
With the Industry currently operating at a loss, APNU+AFC Member of Parliament Jermaine Figueira sought to ascertain whether the infusion of the $4B will help the corporation return to profitability, and if so, what is the estimated profit margin.
But the Agriculture Minister would only say that the supplementary provision would put the Industry “back on the road to profitability.”
In an effort to keep the industry afloat, governments, over the years, have pumped billions of dollars into the corporation. The Agriculture Minister had previously indicated to the House that between 2010 and 2014, GuySuCo received a total of $20B in government subventions. Between 2015 and 2019, billions more were pumped into the ailing industry.
However, notwithstanding significant capital investments, the sugar corporation continues to operate a significant loss. Over the last 10 years, GuySuCo produced one ton of sugar at an average cost of US$747.38 at a time when the world market price for sugar stood at US$388.57.
Additionally, its total indebtedness as of August stands at $72.5B.
