Fri | Aug 18, 2017

Guyana closes state sugar factory as industry declines

Published:Friday | January 22, 2016 | 1:00 AM

A state-owned sugar factory in Guyana that had operated at a loss for years has been ordered shut down as the government seeks to scale back support for one of the country's leading industries.

The factory in Wales could only continue to operate with significant investment that would make little financial sense, given the outlook for the industry in Guyana and throughout the world, Agriculture Minister Noel Holder said late Monday.

Holder said the decision came as part of a broader review of the industry that concluded that better-performing factories, known locally as estates, were subsidising the rest and that the sector overall was in "dire" shape, requiring at least $60 million from the government this year alone.

"The practice of diverting scarce funds from the good estates to keep the poor performers in operation can no longer be tolerated as the survivability of these estates could not now be guaranteed," he said.

Opposition legislator and sugar union leader Komal Chand condemned the announcement on Tuesday and said it would leave about 1,500 out of work.

The closure of the factory, west of the capital, leaves five remaining sugar factories in Guyana.

The Ministry of Agriculture said Wales was projected to make a loss of GUY$1.6 billion to GUY$1.9 billion this year. For 10 years, the state sugar company had been diverting resources to shore up the lossmaking estates like Wales, but the ministry said that practice would end.

"The practice of diverting scarce funds from the good estates to keep the poor performers in operation can no longer be tolerated as the survivability of these estates could not now be guaranteed," the Ministry said, describing Wales as being by far "the estate in poorest shape".

The Wales factory will continue milling cane throughout 2016, and close at the end of the second crop.

"With effect from 2017, farmers' canes will be milled at the Uitvlugt factory," the ministry said.

- Wire reports