| The Guyana Sugar Corporation (GuySuCo) has said that the US$3 million lost in revenue at the Skeldon Modernisation Factory during a test-milling operation was never budgeted for, nor was the money planned for by the sugar company.As a consequence such loss is irrelevant, the company said.GuySuCo was at the time responding to an article carried in Sunday’s edition of Kaieteur News. The article had outlined a number of problems being experienced at the new factory, including the amount of sugar being produced.Kaieteur News had reported that the authorities passed some 50,000 tonnes of cane through the new mill, but the amount of sugar produced was a mere 400 tonnes.A factory is expected to convert cane to sugar at a ratio of ten tonnes of cane to a tonne of sugar. A state-of-the-art factory would have an even better ratio of production.The 50,000 tonnes of cane should have produced 5,000 tonnes of sugar, and the 4,600-tonne loss cost the industry some US$3 million.However, in a statement issued to the media yesterday, GuySuCo stated that “it is normal when starting a new factory that there will be losses during the commissioning process, and the Guyana Sugar Corporation Inc. budgeted around 35,000 tonnes of cane for such expected losses.“It is therefore not reasonable to assume a normal conversion rate of tonnes of cane per tonne of sugar for a new factory undergoing commissioning for the first time. The losses therefore of US$3m are not relevant as the revenue was never planned in the first place.”This newspaper had also revealed that, after the rate of loss was realised by GuySuCo, the authorities brought back the old Skeldon factory into operation, but even this is not helping the situation, since the plan was to shut down the old plant to make way for the new plant.Kaieteur News was reliably informed that the authorities had halted all maintenance to the old factory, with the result that the equipment is so run down that it has taken everything possible to get the old plant back into operation.But the old plant is about 70 per cent efficient, which means that the rate at which it converts cane to sugar is even lower than the given ten-to-one ratio.Ten tonnes of cane at the old factory would yield 1,400 pounds of sugar instead of 2,000 pounds (one tonne), a loss that is further hurting the industry.In responding to this, GuySuCo admitted that no maintenance was carried out at the old factory as the new one was expected to be fully commissioned in time for the second crop. According to the statement, the old factory was held in reserve as a contingency plan in the event that there were problems with the new Skeldon plant.“In fact, very little money has been spent on the old factory since the construction of the new factory started, and it is a testament to the skill of the GuySuCo engineers that the old factory performed as well as it did.“It has been a very delicate balancing act to spend sufficient on the old factory to maintain it and keep it operating when a brand-new factory is being constructed to replace it. After all, if you are going to replace your car with a new one, who would re-spray it and replace the engine before scrapping the old one?” GuySuCo questioned.Kaieteur News was told that the sugar company could not mill cane that was some 80 weeks old and with little sucrose content. This cane had been left in the ground during the move to the new factory, and GuySuCo will have to throw it away.The cane was spread over some 1,400 hectares (3,600 acres) which would have yielded a further 200,000 tonnes of cane, which would have produced 20,000 tonnes of sugar.But the authorities had no option but to rush the old factory into operation some five weeks ago in the face of the massive losses.GuySuCo is denying this, but admitted that ‘some’ of the cane has aged. It assured that such cane will be carried over to the first crop of next year and harvested then.“There has only been 80 hectares of cane that had to be completely scrapped and this equates to about 6,400 tonnes cane, which is a far cry from 200,000 tonnes,” the statement noted.Further, as it relates to the two cane dumpers that were acquired from an American company to add to the equipment at the new Skeldon factory and where only one is operational, the sugar company now claims that the dumpers were supplied by Honiron and the contract was for the Chinese contractor to install them.This newspaper had said that the design of the American cane dumpers was all wrong as the engineers attached to Booker Tate had refused to consult with the Chinese engineers in this area.The Chinese have said that they are more comfortable with the local engineers than with the expatriate ones who form part of the Booker Tate team. Booker Tate, the company that currently holds the management contract, therefore refused to consult with the Chinese when it set about importing the cane dumpers at a cost of US$4.8 million.The cane dumper was expected to feed 350 tonnes of cane per hour, but the American dumpers are feeding cane at a rate of 175 tonnes per hour — only some 50 per cent of the required operational capability.In this regard, since the contract was for Honiron to supply the punt dumpers and the Chinese contractor to install them, GuySuCo is of the view that there is no need to consult with the Chinese contractor over the supply of the punt dumpers.“The punt dumpers will undergo their performance trials in the first crop of 2009 along with the new factory. There are minor works that the American contractor has to carry out prior to the tests. We are confident that the punt dumpers will perform as per the contract, which is to supply cane at 350 tonnes per hour,” the statement said.Kaieteur News had said that US$180M Skeldon Modernisation Plant is currently incurring GY$1.2B in losses.During the past year the contractors ran numerous tests, and the results were less than heartening.The new factory is designed to not only boost production at a time when the price cuts introduced by the European Community are beginning to be felt, but also to help reduce the cost of production, but the results are far from the intended goal. |
