Int’l firm to value GuySuCo assets to be selected next month
The international financial service provider to evaluate the assets of the Guyana Sugar Corporation (GuySuCo) will be announced mid next month, according to the Special Purpose Unit (SPU) under the National Industrial & Commercial Investments Limited (NICIL).
Head of the Unit, Colvin Heath-London disclosed in a statement that three of four firms invited to participate in a restricted tender did so on Monday.
The three firms, PriceWaterHouseCooopers, Ernst & Young, and Delliote, all made presentations to the NICIL/SPU evaluation team at the Marriott Hotel, Kingston. KPMG which was also invited to tender did not make a submission by the October 30 deadline.
The selected services provider will be conducting the valuation of all assets related to the estates up for privatization and diversification, in addition to advisory, financial, and other related services.
According to the statement, the SPU Head told the international firms that “the presentations were all very engaging and the firms all have the international and regional experience as expected. Each of the firms included persons with substantial experience with sugar diversification and privatization in the region, and as such the dialogue was rigorous and engaging.”
Heath London also indicated that the other preparations are on track to have the assets ready for privatization and/or diversification. The statement said that the SPU has been meeting with the management of GuySuCo as well as with other industry stakeholders including the unions, Guyana Agricultural and General Workers Union (GAWU) and National Association of Agricultural, Commercial, & Industrial Employees (NAACIE).
In letters to the SPU, after the meeting, the statement noted that both GAWU and NAACIE expressed support for the SPU’s efforts to keep the estates operational in the interest of the economy and the workers.
GAWU General Secretary, Komal Chand was quoted as saying that “from this encounter, it was heartening to have learnt that the SPU holds the view that the sugar estates identified for closure and divestment are capable of overcoming their difficulties and can be restored to viable and profitable state. We also believe that such feats are attainable with a different approach being taken towards the industry. The GAWU strongly contends that the industry’s success lies in its transformation from sugar to sugar cane industry. In such circumstances, the entire cane plant would be utilized to produce several products. Similar ideas, we recognize, are also held by the SPU.”
The unions also expressed concern over the reported moving of equipment from the estates set for privatization and diversification and urged the SPU to quickly safeguard the assets to ensure the best possible deal for these estates and the workers and communities they support.
The statement noted too that the NAACIE General Secretary, Dawchan Nagasar said, “In light of the interaction with SPU, NACCIE is of the view that the Estates that were identified for closure/privatization/diversification are to be properly maintained because of recent GuySuCo has been moving a lot of assets from those Estates, that is, identified for closure to those estates that GuySuCo will keep. Also, those estates that are to be closed, the fields and other areas have been deliberately abandoned and left to deteriorate.”
The SPU also met with executives of the Private Sector Commission (PSC). The Chairman of PSC, Edward Boyer is quoted as saying “we were very impressed with the head of the SPU during the meeting we had with him.In terms of the SPU’s approach to divestment and diversification, we believe that the PSC and the SPU are on the same page.”
Boyer further stated “we just cautioned the SPU that there should be full accountability and assessment, by a credible international firm, of the assets of the GuySuCo estates that are being put up for privatization and diversification. This assessment should include the goodwill and all of the community services that are provided by the estates. We need this to be done up front and not repeat the Wales experience where the estate was closed and then an assessment was being done.”
The plan ahead, the SPU Head had previously explained, includes selling off some of GuySuCo’s assets and using what remains to get into other profitable enterprises. The Corporation is already engaged in the cultivation of rice on lands once used by the Wales Estate, where production has ceased.
Heath-London suggested that companies that are engaged in rum production, other beverage manufacturing, and food processing, would be ideal as potential operators of some of the current GuySuCo assets.
He said that while factories could be sold to potential operators and investors, lands will not be sold but could be leased so that they remain the property of the State.
By 2020, GuySuCo aims to reduce sugar production to just three factories and with 10, 000 workers, which would be 6,000 less workers than it currently has. Most of the Corporation’s revenues have gone to pay wages and salaries.
To fill in the gaps over the years, the Corporation has been bailed out by the State – an incredible $32 billion over the last three years alone.
The Corporation sees itself being able to produce 150, 000 tonnes of sugar annually in the next three years from the estates that would be kept in operation – namely Albion and Blairmont in Berbice and Uitvlugt, West Coast Demerara.
The operations at these factories would be able to meet the demands of markets locally, in the Caribbean and further afield. In addition to selling raw sugar, the Corporation is looking at value-added sugars and providing electricity to the national grid through co-generation.