Guyana Sugar Corporation
Encyclopedia
The Guyana Sugar Corporation, best known by its acronym GuySuCo, is a Guyanese
sugar
company owned by the government. It is the country's largest cultivator and producer of sugar, a commodity which is responsible for approximately 20% of Guyana's annual revenue and 40% of all agricultural production. They are also notable of Demerara Sugar, and also honey
and sweeteners.
The company as GuySuCo was formed in 1976, when the government of Guyana nationalised and merged the sugar estates operated by Booker Sugar Estates Limited, Tate and Lyle and Jessels Holdings to form the Guyana Sugar Corporation. One of its noted products is brown sugar produced in the Demerara River
basin which is exported internationally to the European Union
, the United States of America, and the Caribbean Community
(Caricom) countries which include Trinidad
, Suriname
, St. Lucia, Grenada
, Antigua
, Dominica
, Barbados
, St. Vincent
and Jamaica
.
The Guyana Sugar Corporation, which took over the sugar plantations, initially lacked needed experience and perhaps more importantly, did not have access to the reserves of foreign capital required to maintain sugar plantations and processing mills during economically difficult periods. When production fell, Guysuco became increasingly dependent on state support to pay the salaries of its 20,000 workers. Second, the industry was hard-hit by labor unrest directed at the government of Guyana. A four-week strike in early 1988 and a seven-week strike in 1989 contributed to the low harvests. Third, plant diseases and adverse weather plagued sugar crops. After disease wiped out much of the sugarcane crop in the early 1980s, farmers switched to a disease-resistant but less productive variety. Extreme weather in the form of both droughts and floods, especially in 1988, also led to smaller harvests.
Guyana exported about 85 percent of its annual sugar output, making sugar the largest source of foreign exchange. But the prospects for sugar exports grew less favorable during the 1980s. Rising production costs after nationalization, along with falling world sugar prices since the late 1970s, placed Guyana in an increasingly uncompetitive position. A 1989 Financial Times
report estimated production costs in Guyana at almost US$400 per ton, roughly the same as world sugar prices at that time. By early 1991, world sugar prices had declined sharply to under US$200 per ton. Prices were expected to continue decreasing as China
, Thailand
, and India
boosted sugar supplies to record high levels.
In the face of such keen international competition, Guyana grew increasingly dependent on its access to the subsidized markets of Europe and the United States. The bulk of sugar exports (about 160,000 tons per year in the late 1980s) went to the European Economic Community
(EEC) under the Lomé Convention, a special quota
arrangement. The benefits of the quota were unmistakable: in 1987, for example, the EEC price of sugar was about US$460 per ton, whereas the world price was only US$154 per ton. (The gap between the two prices was not so dramatic in other years, but it was significant.) Guyana was allowed to sell a much smaller amount of sugar (about 18,000 tons per year in 1989, down from 102,000 tons in 1974) in the United States market at prices comparable to those in the EEC under another quota arrangement, the Caribbean Basin Initiative
. Maintaining preferential access to the European market was a priority in Guyana; in 1988 and 1989, production levels were too low to satisfy the EEC quota, so Guyana imported sugar at low prices and reexported it to the lucrative European market. Even so, Guyana fell 35,000 tons short of filling the quota in 1989 and 13,000 tons short in 1990.
The government of Guyana restructured the sugar industry in the mid-1980s to restore its profitability. The area dedicated to sugar production was reduced from 50,000 hectares to under 40,000 hectares, and two of ten sugarcane-processing mills were closed. Guysuco also diversified into production of dairy products, livestock, citrus
, and other items. Profitability improved, but production levels and export earnings remained well below target. In mid-1990, the government took an important step toward long-term reform of the sugar industry—and a symbolically important step toward opening the economy—when Guysuco signed a management contract with the British firms Booker and Tate & Lyle
. The Booker company owned most sugar plantations in Guyana until the industry was nationalized in 1976. A study by the two companies reportedly estimated that US$20 million would be needed to rehabilitate Guyana's sugar industry.
In 2004 it was announced that the Guyana was moving to modernize its sugar industry to cushion the impact of the African, Caribbean and Pacific ACP countries on the world market. As part of a strategic plan to reduce costs and improve productivity, the Guyana Sugar Corporation and the China National Technology Import and Export Corporation (CNTIC) signed contracts on June 22, 2004 in Beijing
. As a result of the $110 million agreement which was partly funded by the World Bank
, International Monetary Fund
and the Exim Bank of China, a new factory was built, which included the Skeldon Sugar cogeneration plant, a distillery and a refinery to be constructed at a later stage in 2008. The agreement was also made in compliance with the World Bank targest and obligations to contribute to an overall reduction of global greenhouse gases and to introduce modern technologies to the sugar industry which would improve efficiency. In November 2007, sugar factory workers of GuySuCo trained in South Africa
to become familiar with the new technology.
Guyana
Guyana , officially the Co-operative Republic of Guyana, previously the colony of British Guiana, is a sovereign state on the northern coast of South America that is culturally part of the Anglophone Caribbean. Guyana was a former colony of the Dutch and of the British...
sugar
Sugar
Sugar is a class of edible crystalline carbohydrates, mainly sucrose, lactose, and fructose, characterized by a sweet flavor.Sucrose in its refined form primarily comes from sugar cane and sugar beet...
company owned by the government. It is the country's largest cultivator and producer of sugar, a commodity which is responsible for approximately 20% of Guyana's annual revenue and 40% of all agricultural production. They are also notable of Demerara Sugar, and also honey
Honey
Honey is a sweet food made by bees using nectar from flowers. The variety produced by honey bees is the one most commonly referred to and is the type of honey collected by beekeepers and consumed by humans...
and sweeteners.
The company as GuySuCo was formed in 1976, when the government of Guyana nationalised and merged the sugar estates operated by Booker Sugar Estates Limited, Tate and Lyle and Jessels Holdings to form the Guyana Sugar Corporation. One of its noted products is brown sugar produced in the Demerara River
Demerara River
The Demerara River is a river in eastern Guyana that rises in the central rainforests of the country and flows to the north for 346 kilometres until it reaches the Atlantic Ocean. Georgetown, Guyana's largest seaport and capital, is situated on the east bank of the river's mouth. The Demerara's...
basin which is exported internationally to the European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
, the United States of America, and the Caribbean Community
Caribbean Community
The Caribbean Community is an organisation of 15 Caribbean nations and dependencies. CARICOM's main purposes are to promote economic integration and cooperation among its members, to ensure that the benefits of integration are equitably shared, and to coordinate foreign policy...
(Caricom) countries which include Trinidad
Trinidad
Trinidad is the larger and more populous of the two major islands and numerous landforms which make up the island nation of Trinidad and Tobago. It is the southernmost island in the Caribbean and lies just off the northeastern coast of Venezuela. With an area of it is also the fifth largest in...
, Suriname
Suriname
Suriname , officially the Republic of Suriname , is a country in northern South America. It borders French Guiana to the east, Guyana to the west, Brazil to the south, and on the north by the Atlantic Ocean. Suriname was a former colony of the British and of the Dutch, and was previously known as...
, St. Lucia, Grenada
Grenada
Grenada is an island country and Commonwealth Realm consisting of the island of Grenada and six smaller islands at the southern end of the Grenadines in the southeastern Caribbean Sea...
, Antigua
Antigua
Antigua , also known as Waladli, is an island in the West Indies, in the Leeward Islands in the Caribbean region, the main island of the country of Antigua and Barbuda. Antigua means "ancient" in Spanish and was named by Christopher Columbus after an icon in Seville Cathedral, Santa Maria de la...
, Dominica
Dominica
Dominica , officially the Commonwealth of Dominica, is an island nation in the Lesser Antilles region of the Caribbean Sea, south-southeast of Guadeloupe and northwest of Martinique. Its size is and the highest point in the country is Morne Diablotins, which has an elevation of . The Commonwealth...
, Barbados
Barbados
Barbados is an island country in the Lesser Antilles. It is in length and as much as in width, amounting to . It is situated in the western area of the North Atlantic and 100 kilometres east of the Windward Islands and the Caribbean Sea; therein, it is about east of the islands of Saint...
, St. Vincent
Saint Vincent (island)
Saint Vincent is a volcanic island in the Caribbean. It is the largest island of the chain called Saint Vincent and the Grenadines. It is located in the Caribbean Sea, between Saint Lucia and Grenada. It is composed of partially submerged volcanic mountains...
and Jamaica
Jamaica
Jamaica is an island nation of the Greater Antilles, in length, up to in width and 10,990 square kilometres in area. It is situated in the Caribbean Sea, about south of Cuba, and west of Hispaniola, the island harbouring the nation-states Haiti and the Dominican Republic...
.
History
The rapid nationalization of the sugar industry in the mid-1970s led to severe management difficulties and an emigration of talent.The Guyana Sugar Corporation, which took over the sugar plantations, initially lacked needed experience and perhaps more importantly, did not have access to the reserves of foreign capital required to maintain sugar plantations and processing mills during economically difficult periods. When production fell, Guysuco became increasingly dependent on state support to pay the salaries of its 20,000 workers. Second, the industry was hard-hit by labor unrest directed at the government of Guyana. A four-week strike in early 1988 and a seven-week strike in 1989 contributed to the low harvests. Third, plant diseases and adverse weather plagued sugar crops. After disease wiped out much of the sugarcane crop in the early 1980s, farmers switched to a disease-resistant but less productive variety. Extreme weather in the form of both droughts and floods, especially in 1988, also led to smaller harvests.
Guyana exported about 85 percent of its annual sugar output, making sugar the largest source of foreign exchange. But the prospects for sugar exports grew less favorable during the 1980s. Rising production costs after nationalization, along with falling world sugar prices since the late 1970s, placed Guyana in an increasingly uncompetitive position. A 1989 Financial Times
Financial Times
The Financial Times is an international business newspaper. It is a morning daily newspaper published in London and printed in 24 cities around the world. Its primary rival is the Wall Street Journal, published in New York City....
report estimated production costs in Guyana at almost US$400 per ton, roughly the same as world sugar prices at that time. By early 1991, world sugar prices had declined sharply to under US$200 per ton. Prices were expected to continue decreasing as China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
, Thailand
Thailand
Thailand , officially the Kingdom of Thailand , formerly known as Siam , is a country located at the centre of the Indochina peninsula and Southeast Asia. It is bordered to the north by Burma and Laos, to the east by Laos and Cambodia, to the south by the Gulf of Thailand and Malaysia, and to the...
, and India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
boosted sugar supplies to record high levels.
In the face of such keen international competition, Guyana grew increasingly dependent on its access to the subsidized markets of Europe and the United States. The bulk of sugar exports (about 160,000 tons per year in the late 1980s) went to the European Economic Community
European Economic Community
The European Economic Community The European Economic Community (EEC) The European Economic Community (EEC) (also known as the Common Market in the English-speaking world, renamed the European Community (EC) in 1993The information in this article primarily covers the EEC's time as an independent...
(EEC) under the Lomé Convention, a special quota
Import quota
An import quota is a type of protectionist trade restriction that sets a physical limit on the quantity of a good that can be imported into a country in a given period of time....
arrangement. The benefits of the quota were unmistakable: in 1987, for example, the EEC price of sugar was about US$460 per ton, whereas the world price was only US$154 per ton. (The gap between the two prices was not so dramatic in other years, but it was significant.) Guyana was allowed to sell a much smaller amount of sugar (about 18,000 tons per year in 1989, down from 102,000 tons in 1974) in the United States market at prices comparable to those in the EEC under another quota arrangement, the Caribbean Basin Initiative
Caribbean Basin Initiative
The Caribbean Basin Initiative was a unilateral and temporary United States program initiated by the 1983 "Caribbean Basin Economic Recovery Act" . The CBI came into effect on January 1, 1984 and aimed to provide several tariff and trade benefits to many Central American and Caribbean countries....
. Maintaining preferential access to the European market was a priority in Guyana; in 1988 and 1989, production levels were too low to satisfy the EEC quota, so Guyana imported sugar at low prices and reexported it to the lucrative European market. Even so, Guyana fell 35,000 tons short of filling the quota in 1989 and 13,000 tons short in 1990.
The government of Guyana restructured the sugar industry in the mid-1980s to restore its profitability. The area dedicated to sugar production was reduced from 50,000 hectares to under 40,000 hectares, and two of ten sugarcane-processing mills were closed. Guysuco also diversified into production of dairy products, livestock, citrus
Citrus
Citrus is a common term and genus of flowering plants in the rue family, Rutaceae. Citrus is believed to have originated in the part of Southeast Asia bordered by Northeastern India, Myanmar and the Yunnan province of China...
, and other items. Profitability improved, but production levels and export earnings remained well below target. In mid-1990, the government took an important step toward long-term reform of the sugar industry—and a symbolically important step toward opening the economy—when Guysuco signed a management contract with the British firms Booker and Tate & Lyle
Tate & Lyle
Tate & Lyle plc is a British-based multinational agribusiness. It is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index as of 20 June 2011...
. The Booker company owned most sugar plantations in Guyana until the industry was nationalized in 1976. A study by the two companies reportedly estimated that US$20 million would be needed to rehabilitate Guyana's sugar industry.
In 2004 it was announced that the Guyana was moving to modernize its sugar industry to cushion the impact of the African, Caribbean and Pacific ACP countries on the world market. As part of a strategic plan to reduce costs and improve productivity, the Guyana Sugar Corporation and the China National Technology Import and Export Corporation (CNTIC) signed contracts on June 22, 2004 in Beijing
Beijing
Beijing , also known as Peking , is the capital of the People's Republic of China and one of the most populous cities in the world, with a population of 19,612,368 as of 2010. The city is the country's political, cultural, and educational center, and home to the headquarters for most of China's...
. As a result of the $110 million agreement which was partly funded by the World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
, International Monetary Fund
International Monetary Fund
The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...
and the Exim Bank of China, a new factory was built, which included the Skeldon Sugar cogeneration plant, a distillery and a refinery to be constructed at a later stage in 2008. The agreement was also made in compliance with the World Bank targest and obligations to contribute to an overall reduction of global greenhouse gases and to introduce modern technologies to the sugar industry which would improve efficiency. In November 2007, sugar factory workers of GuySuCo trained in South Africa
South Africa
The Republic of South Africa is a country in southern Africa. Located at the southern tip of Africa, it is divided into nine provinces, with of coastline on the Atlantic and Indian oceans...
to become familiar with the new technology.