Guyana Sugar Corporation today reported preliminary results for 2021

GUYSUCO Reports Preliminary 2021 Results

    Guysuco reports that there has been a reduction in the annual financial losses to the Corporation despite unprecedented flooding in the sugar belt in 40 years.

    Pre-audited production results are reported at 58,025 MT in 2021 compared to 88,890 MT in 2020.

    The Corporation has met all the needs of the local market for 2021 despite losing some 35% of the standing cane for the 2nd Crop of 2021 as a result of the flood.

    At Albion, where 50% of the production was programmed to be made, the mortality rate for the standing canes planned to be harvested for the 1st Crop of 2022 is estimated at 80% due to the floods.

    On the Berbice Estates where more than 77% of the production is made, the rainfalls in 2021 were 72% more than the previous year.

    The Corporation drained some 4.5 million tonnes of water off the land daily during the 65 days flood which is enough water to fill 2,000 Olympic sized swimming pools.

Business Review and Outlook

The Chief Executive Officer, commented, “Despite the challenges from this unprecedented floods, the worst in 40 years on the sugar belt, Guysuco was able to soldier on and continue production soon after these devastating floods to beat the prediction in September 2021 that the industry will not pass the 50,000 MT mark. Guysuco pre-audit production as at December 23, 2021, is 58,025 MT.” The CEO stated that “The Agriculture Team was able to strategise and re-focus on rehabilitating the damaged fields. Some 4,300 Hectares of sugar canes were destroyed across the industry (this is land equivalent to over 52,000 houselots) and the industry was able to rehabilitate some 38% of those damaged cultivation in 2021.” The CEO stated that “I have seen nothing but champions by their thousands across the sugar belt who over the last year worked tirelessly to drain some 4.5 million tonnes of water from the flooded lands every day during those 65 days (that is water than fill 2,000 Olympic sized swimming pools every day). The CEO further stated that “this herculean effort allowed the industry to save the remaining surviving cane and secure a 2nd Crop for 2022.”

According to the Senior Marketing Manager, “Guysuco was able to meet its obligations of the local brown sugar market for 2021 and will have enough brown sugar in the Corporation’s bonds until Valentine’s Day 2022, when the factories are expected to recommence grinding.” She further stated “Guysuco has launched into a forward-looking marketing strategy that is advancing the sale of value added packaged sugar (Demerara Gold and Enmore Crystals brands) with the primary focus being the local and CARICOM markets. The Corporation’s strategy is to move the industry away from the EU bulk market that procures sugar at an average price of US$400 per MT when compared to US$600 MT in the Caribbean market.”

The Field Operations and Research Director (ag) observed that “the Corporation urgently needs to advance its mechanization strategy to be able to increase its harvesting capabilities and reduce operating cost especially in this new environment where unseasonal rainfalls are now the norm rather than the exception.” The Field Operations and Research Director (ag) stated that “in

2020 the industry was faced with a dire shortage of fertilizers and agro- chemical which had an adverse impact on 2021 cane growth which affected cane yield   In 2021 this shortage of critical agricultural input was resolved with great support from the Government of Guyana.

To compound the challenges of 2021, the industry was faced with a dismal shortage of labour (average turnout in the 2nd crop of 2021 being 49%) which compromised critical operational activities such as harvesting.  The outcome from this situation was that the factories did not have adequate canes to grind consistently for a 24 hours period, thus increasing inefficiencies.

This is why mechanization at this time is critical to reduce the production period and increase the throughput in the factories in the productive months The Field Operations & Research Director (ag) stated that what is critical is “two shorter crops with more output per day and this will help to reduce cost in the industry”.  He offered to achieve such a situation “required over G$3 billion in immediate and urgent capital investment in land conversion, machinery and field infrastructure”.

The Head of Human Resources confirmed that there were 63 strikes in the sugar belt for 2021 which cause some 20,000 man days to be lost.  The financial consequence of this situation was a loss in value to the sugar industry because of industrial action totaling G$740 million.  In October 2021 (the most favourable month of the year for sugar production), there were strikes for issued that were unrelated to the operations in the sugar sector (strike for G$250,000 cash grant and strike for flood relief). The adverse financial impact of those October strikes totaled some G$378 million.

The Chief Executive Officer, stated that, “the opening balance sheet given to the new executive management after the new Dr Irfaan Ali Government came to office illustrated that the Corporation was never compensated for the G$60 billion as a result of the Vested Order that harvested Skeldon, Enmore, Wales and Rose Hall from the books of Guysuco”. The CEO stated “when we turned up at Rose Hall for the initial take-over / hand over process, Guysuco found a grave yard of scrap metal as the factory was allowed to deteriorate and many of the functional moveable machines that Guysuco left at the location in 2017 either disappeared or fell into unrecoverable disrepairs.”

Executive Management has prepared a 5 Year Strategic Plan and this was approved by the Board of Directors in March 2021 but because of these destructive floods, this entire Plan had to be re-engineered to cater for the new dispensation. The modified 5 Year Strategic Plan is scheduled to be presented to the February 2022 Board Meeting.”

International Sugar Market

On average sugar prices internationally are set to increase, for 2022 this is expected to be around 20% and the Corporation is programming a tillage, planting and factory rehabilitation program to meet this future opportunity especially in the Caribbean Market.