GUYSUCO forecasts $300M loss
Says large wage increase unsustainable
Stabroek News
October 26, 2002
The Guyana Sugar Corporation (GUYSUCO) expects to lose another $300M this year, making the figure $1.5B over the last two years.
In this context the corporation says a large increase in wages "cannot be sustained by any loss-making enterprise".
A release from the corporation yesterday said that a larger crop and the strengthening of the Euro helped to improve its performance in 2002 as compared to last year.
"The entity is fighting a survival battle in the face of declining sugar prices, and the need to reduce its unit cost of production to meet this challenge".
Chief Executive, Brian Webb told Stabroek News yesterday that the company needs to reduce the unit cost of production from US17.6 cents which it achieved this year to around US12 cents. He said the corporation has to make significant productivity gains to ensure its viability. Stabroek News understands that the corporation wants to reach this production figure by 2006.
Earlier this month former GUYSUCO director Ian McDonald told a consultation hosted by the Foreign Trade Ministry that the corporation is leading the rest of the regional industry in reducing the cost of production and modernising its operations to meet the challenges of globalisation and become competitive.
The GUYSUCO release said "The expansion of the Skeldon operation is the only immediate panacea for the reduction of the Company's operating costs" as "the economies of scale, good cane growing conditions and better labour productivity in the Berbice estate, and other cost saving initiatives would help to reduce the industry's overall cost of producing below the current US17.7 cents per pound".
The company's statement seeks to put its case to the public in the light of strike action by members of its workforce represented by the National Association of Agricultural, Commercial and Industrial Employees (NAACIE). (See other story on page 16.) NAACIE is pressing the corporation to refer the 2001 wage dispute to arbitration. The union is seeking a 38% wage increase. However, the release said that despite the $1.2 billion loss last year it paid all its unionized employees an 8.5% increase, which cost the corporation $1.1 billion this year. NAACIE is demanding a 30% across-the-board increase plus a merit increment between 3-9 percent on salaries but negotiations are yet to commence on the pay hike.
However, GUYSUCO says that its board of directors approved "a 2% across-the-board and a 2.63% merit increase for its Senior Management personnel for year 2002", in order to "assist its employees meet increases in the cost of living and also to continue to recognise and reward excellent performance."
The 4.63% increase will cost GUYSUCO $35 million, the release said.
It also warned that "the future of the Demerara Estates depends heavily on the Corporation's ability to improve productivity and reduce costs" and that "it is imperative, therefore that the unions and their members act with reason and good judgment, and that their demands take into consideration the need to secure the sugar industry in its present shape for the good of all. Excessive and unrealistic wage awards will undoubtedly hasten the demise of the Demerara Estates".