DDL’s interest confirms sugar estates still viable – GAWU

After submitting EoI for estate purchase

By Samuel Sukhnandan

The interest shown by the Demerara Distillers Limited (DDL) to potentially purchase a sugar estate proves that the sugar industry in Guyana is still viable and is worth keeping alive, President of the Guyana Agricultural and General Workers Union (GAWU), Komal Chand, said in response to this development, news of which was published in our Thursday edition.
DDL has raised concerns over Government’s plans to downsize the sugar sector, and has recently submitted an Expression of Interest (EoI) to the Special Purposes

Unit (SPU) of the National Industrial and Commercial Investments Limited (NICIL). That EoI is currently under review.
Chand said, “We have observed the fact that so much interest shown in estates to be sold testifies to our contention that these estates are all viable. That DDL is now seeking to purchase one of the estates confirms our position, and it tells you that the industry could be kept alive.”
While the GAWU head maintains that the decision taken by Government was not well thought out, he said Guyanese may have to face the reality of the decision to sell these estates. He is, however, of the firm view that local buyers stand a better chance of efficiently managing these estates.
“So, naturally, a local buyer would have more interest than a foreign buyer, in a sense that they would be able to hold the foreign exchange here. A local owner will have a better understanding of the culture of the workers, and the venture under new ownership could be successful,” he said, in reference to DDL.
The process by which these estates are sold may be lengthy, Chand noted, explaining that the process is expected to be completed by mid-next year, since the SPU has to assess the value of the assets owned by the estates. An accounting company was late last year awarded the contract to carry out that exercise.
And although a commitment was made by the SPU to keep the Enmore, Skeldon and Rose Hall sugar factories operational until they are sold, hundreds of workers from those entities have already been issued termination letters. A majority of the workers have already received their last payment for 2017.
“If there is a glimmer of hope that these three estates will function again, we are hoping that it can be early, and we are hoping that the SPU is able to be supported in this direction. They will have to evaluate how many workers they will need,” Chand told this publication in response to the evaluation.
Chand did not fail to reiterate that GAWU feels that the industry was being consolidated for a number of years, and noted that these estates should remain under one entity. “And it is in the interest of the country, and the economy, and the workers in particular to have all the estates under one (entity),” he added.
However, the DDL EoI was made for one of the sugar estates, and is aimed at keeping the company’s supply of molasses stable. This was confirmed by Public Relations Representative for DDL, Alex Graham, who said, “It was in the company’s interest to explore options with the intention of finding a solution.”
The company has said its distillery production for 2017 has increased by some 30 per cent over 2016, surpassing projections last year; and was projected to increase by a further 25 per cent over 2017.
However, the company is concerned that the downsizing of the sugar industry would affect its projections for 2018. “With the impending closure of estates, there will be a considerable shortfall in molasses’ availability, which is directly related to the reduced projection of sugar production,” the DDL has noted.
When the SPU was established, it was tasked with the divestment (sell-off) of assets owned by the Guyana Sugar Corporation (GuySuCo). It received an allocation of $200 million under the Finance Ministry’s 2018 Budget. This money would be spent on legal and professional fees, surveys, strategic partnerships with PricewaterhouseCoopers (PwC), travel and subsistence, as well as other expenditures.
Agriculture Minister Noel Holder has said that, based on presentations made by GuySuCo and the SPU, Cabinet will next week make a final decision on the divestment plans for the local sugar industry, in that a collective decision will be made on the future of each of the estates and factories.