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GUYSUCO Closes Non-performing Sugar Estate

GEORGETOWN, Guyana (CMC) – The Guyana government said, on Monday, it was no longer tolerating the practice of diverting scare funds from good sugar estates to keep “the poor performers in operation”, as it confirmed the closure of the Wales Estate.

The Ministry of Agriculture said, the “parlous state of the sugar industry is common knowledge” and that Wales is projected to record a loss of nearly two billion dollars (One Guyana dollar =US$0.04 cents0 this year.

It said, that the government had appointed a new board and interim management committee last July, charged with “bringing a greater level of discipline to
bear on the financial operations” of the sugar industry.

The Ministry of Agriculture said that, over the past 10 years, the Guyana Sugar Corporation (GUYSUCO) had been diverting scarce resources from the estates
to assist with the financing of the new Skeldon project.

“Additionally, the Corporation was denying the high productive estates funding as they propped up the poor performing ones. The result was a general decline in performance, production and financial, across the industry.

“The practice of diverting scarce funds from the good estates to keep the poor performers in operation can no longer be tolerated as the survivability of these
estates could not now be guaranteed,” the Ministry said, describing the Wales Estate as being, by far, “the estate in poorest shape”.

It said, that the investment required to refurbish Wales Estate remains significant and the finances “are simply not available.

“Diverting funds from the other estates to keep Wales afloat would seriously jeopardize the future of these estates. This cannot be allowed to happen.

“It is impossible to make sugar production at Wales viable. This is made worse by the gloomy outlook for sugar prices for the foreseeable future. Wales Estate
is projected to make a loss of GUY$1.6 to GUY$1.9 billion in 2016. This, coupled with the extent of refurbishment needed, render this estate prohibitively costly to maintain.”

The government said, to protect the other estates, GUYSUCO has no alternative but to take a number of steps with immediate action as it relates to the Wales Estate.

These include: no further land preparation and planting; the retiring of the land as the estate’s cultivation is harvested and held for other diversification ventures and that agricultural workers at Wales will be absorbed by Uitvlugt, up to the extent of suitable vacancies on that location, the government added.

“Surplus labour would have to be made redundant,” it revealed. It said, the Wales factory would operate throughout 2016, milling both the estate’s and farmers’ canes, but will close at the end of the second crop at the end of the year.

“With effect from 2017, farmers’ canes will be milled at the Uitvlugt factory. During this year, the routing of the farmers’ canes to Uitvlugt would be determined to ensure the least additional cost.”

GUYSUCO said, it would be exploring the feasibility of alternative ventures utilizing the Wales lands.

“The important criteria for such projects would be wealth creation andemployment generation. It is hoped that the first of such projects could commence
by October 1, 2016.”

GUYSUCO said, that the new measures have “nothing to do with the recommendations of the Commission of Inquiry (COI) into the sugar industry, though the
COI report does make reference to the Corporation’s plans for 2016”.

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