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The Guyana Sugar Corporation (GuySuCo) is in line to receive $6B to finance developments in its field and factory operations – a move Government has deemed necessary to turn the ailing Sugar Industry around.
Senior Minister within the Office of the President with responsibility for Finance, Dr. Ashni Singh made the announcement on Wednesday as he presented the 2022 National Budget to the National Assembly.
“Mr. Speaker, Government’s commitment to the Sugar Industry remains unwavering in spite of inheriting a devastating situation that was dominated by the callous shutdown of three sugar estates.
Since resuming office, our Government has been proactive in focusing on: reopening and recapitalizing the closed estates; rationalising cost structures; diversifying the sugar sales mix to maximise earnings; re-engaging previously displaced workers; and repositioning the industry on a sustainable path to profitability. Since taking office in August 2020, the focus has been on rehabilitation of assets and retooling of the estates,” he told the House.
According to the Finance Minister, the $6B will be used to strategically invest in the Albion, Blairmont, and Uitvlugt Estates. Such investments, will see upgrades to and mechanization of the field operations and packaging facilities to produce more value-added products for the domestic and international markets.
“These investments will be undertaken with the ultimate objective of ensuring that each estate is able to break in the not too-distant future,” he posited.
Minister Singh told the House that in anticipation of improved production levels, GuySuCo will be concentrating its marketing efforts on shifting from the low-value bulk-sugar markets to more bagged and packaged sugar products.
“To this end, these products will increase from 34 percent in 2020 to 64 percent of total production in 2022,” he said
He also informed the House that over 1,300 persons have been reemployed with GuySuCo and are now able to provide a livelihood for their families. Additionally, over 5,000 workers who were severed in 2016/17, each received cash grants of $250,000 in 2021.
He said notwithstanding the devastation caused by the flood, the sugar growing subsector managed to contain the reduction in its value added to 34.7 percent in 2021, and delivered total sugar production of 58,025 tonnes.
“This reflects the destruction of some 4,300 hectares of cane in inundated fields in the first half of 2021. It is estimated that approximately 35 percent of the standing cane for the second crop was lost as a result of the May/June floods. At Albion estate alone, it is estimated that the mortality rate for the standing canes planned to be harvested for the first crop was 80 percent. Having worked tirelessly to drain some 4.5 million tonnes of water off the lands, the industry was only able to save some of the surviving cane,” Minister Singh explained.
He said People’s Progressive Party/Civic (PPP/C) Government will continue to invest in GuySuCo even as it continues to consider the possibility of engaging private investor.
Just last December, the Government injected approximately $2.3B into GuySuCo when it ran low on cash. An additional $1.3B was used to facilitate the disbursement of a one-off grant of $250,000 to the 5,263 sugar workers who were severed under the APNU+AFC Administration.
Back then, the House was told that of the $2.3B directly injected into GuySuCo, $1.6B was used to offset wages and salaries while $286.6M was used for the purchase of fuel, and another $47.9M for the purchase of lubricants. Additionally, $130M was used to rent a lorry, $94.7M for the purchase of essential parts and materials, $86M for the payment of pension and $28.2M for the payment of union dues.
Notably, it was just last June that the Government got approval for an additional $1.5B for GuySuCo to complement the $2B initially approved in the National Budget. In 2020, a total of $7B was approved for GuySuCo.
