GuySuCo to get $2B this year

….Finance Minister announces in National Budget 

By Svetlana Marshall

In an attempt to salvage the ailing Sugar Industry, the People’s Progressive Party/Civic (PPP/C) Administration has budgeted $2B for the Guyana Sugar Corporation (GuySuCo) to facilitate the execution of capital projects.

Senior Minister within the Office of the President with responsibility for Finance, Dr. Ashni Singh made the announcement on Friday as he presented the 2021 National Budget to the National Assembly under the theme ‘A path to recovery, economic dynamism and resilience,’ in the visible absence of the main opposition – the A Partnership for National Unity + Alliance For Change (APNU+AFC).

Dr. Singh said the move was in keeping with the PPP/C’s campaign promise to reel back the negative effects caused when the APNU+AFC Government, between 2015 and 2020, took a decision to scale down the industry by closing three Sugar Estates.

He said when the PPP/C returned to Office on August 2, 2020, it met a situation where approximately 7,000 sugar workers were unceremonious placed on the breadline by its predecessor.  According to Singh, the move to downsize the industry not only placed undue hardship on the sugar.

“Hundreds of thousands of persons were affected directly and indirectly. Small and micro businesses, small market vendors were decimated,” the Senior Minister said.

He added: “While three sugar estates were closed, the other three that were reluctantly kept opened were left with little or no capital investment…By the time we entered office, sugar production had plummeted to its lowest level ever.”

Dr. Singh said notwithstanding the prophets of doom, the PPP/C Government stands resolute to its manifesto promise turn the industry around.  He said the new board and management appointed have been charged with conducting a detail diagnostic of the industry, and to make GuySuCo fit for purpose. He posited that a Master Plan for each sugar estate is being developed to guide the future of the Sugar Industry.

Changes to come include quadrupling sales into the packaged sugar market locally and internationally over the next five years; improving access roads at the estates and the cane transport fleets; rehabilitating the estates to profitable cost centers and more.

“Mr Speaker, given the importance of sugar in the domestic economy, the manner in which this sector affects over socio-economic conditions in rural Berbice and rural Demerara, we shall continue to work with all stakeholders, including the private sector, in ensuring the private sector, in ensuring that the viability of this industry is preserved,” Dr. Singh said.

The $2B budgeted for GuySuCo this year comes less than four months after the PPP/C Government injected $7B into the Sugar Industry.

In September the National Assembly had approved $3B for the Industry, however, less than three months after, the Government returned to the House for another $4B in supplementary funding.

In defending the request for supplementing funding for the Industry, Agriculture Minister Zulfikar Mustapha had said the money was needed to execute “critical” capital projects across the Industry. He said the three estates in operation – Blairmont, Albion and Uitvlugt – were operating at a 60 per cent capacity, and as such, there was need for re-capitalization to achieve 100% capacity.

Of the $4B, $2.1B was allocated to the Albion Estate while approximately $518M went to Blairmont Estate. The remainder was spread across the other estates, and GuySuCo’s Headquarters.

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, 2020 stood at $72.5B.

On Friday, the Senior Minister with responsibility for Finance told the House that the Sugar Industry contracted by 3.7 percent in 2020.