He said, while the intended project will increase production to 450,000 tons, it is hoped that cost of production would decline to US11 cents per pound, from the current average of US17 cents.

Chandarpal was addressing the gathering at the annual GUYSUCO Honours Roll ceremony, on the lawns of Albion Community Centre, also at Corentyne, Berbice, last Saturday, to recognise workers for outstanding performance last year.

"Along with a refinery and distillery, there will be co-generation with the utilisation of bagasse to produce electricity and reduce fuel cost," the minister stated.

He added: "So there is a lot of hope...there is potential, in spite of the difficulties, the industry will pull through and we are prepared to meet the challenges despite the harsh realities around us."

Chandarpal alluded to the problems faced by the industry in 2001, due to the decline in the Euro exchange rate which resulted in tremendous loss of financial resources and the decrease in prices through the Sugar Protocol.

"Our preferential markets are threatened because the European Union (EU) introduced 'an everything but arms initiative', intended to help the poorer countries but instead reducing countries like us which has been supplying them," the minister explained.

"But we, along with countries experiencing similar problems, have decided to negotiate with the EU, as our Government has made a lot of calculations in our national economy based on those expectations," Chandarpal said.

He declared that, while critics are saying it is time to get out of the business and it is not wise to expand, Guyana is taking a step "based on confidence we have in our ability to overcome some of those difficulties".

"It is in that context that the strategic plan for the sugar industry is enforced and we are beginning with the expansion of Skeldon," Chandarpal said.

He said, apart from expanding, the Government has refused to close the Demerara estates, which will soon produce 500,000 tons of organic sugar and other value-added products.

Chandarpal said the present cost of producing in the Demerara estates is US20 cents per pound but the expenditure is not uniform across the country.

With the expansion, thought, expense will be less and, on that basis, the Demerara estates will not be closed.

The expanded Berbice operations will offer comparative advantage and that ought to lessen production costs, he said.

Minister Chandarpal envisages an increase, to 74,000 tons, in supply to the Caribbean Community (CARICOM) market and more sales to the Dominican Republic and Brazil.

"...so there is potential that, despite the difficulties, the industry will survive".

He admonished management to change the style of operating and use some benefits from the good times to consolidate and prepare for the harder period.

"We cannot just say that every time we have an increase we have to spend it all, whether on infrastructure development, wages or other things. We have to have a realistic approach.

"Let us continue, in a realistic manner, to work toward getting this industry, not only to survive the crisis and difficulty, but to advance.