Saturday, December 26, 2009

King Sugar

King Sugar - GuySuCo and the Nation Part I

Excerpt from Sasenarine Singh's letter to Kaieteur News: (Direct Quote)

Reality check No. 1:- 2010 will remain a tough year for GuySuCo.

Let us accept that the best brains in sugar such as Dr. Gopaul’s were integral in designing the TP and thus we must accept this plan has merit in its contribution to the industry. However, does the plan cater for the following which I encourage any journalist to ask Mr. Hanoman the next time he is interviewed?

1. Are there adequate planning systems in place to optimise sugar cane cultivation using selective mechanisation? Mechanisation must be intensified in this industry as more and more of the off-springs of the cane cutter either migrate to other types of work or migrate out of Guyana. How much of the cane is harvested mechanically today and what is the plan for the next 12 months and by when 50% of the cane will be reaped mechanically?

2. Is the mix of cropping and grinding optimally matched? Are there enough cane available in the estates (save and except Skeldon) at the right time to feed the sugar factories? After the Chinese have sorted the teething issues at Skeldon, there is still an overwhelming concern that there are inadequate cane in the ground to feed the new factory. Does the TP cater for a timeline by which this anomaly is sorted and what immediate actions are in train to realise this objective? The Government can take actions such as providing partial bank guarantee in order for the private cane-farmers to secure the required resources to accelerate development and planting of the land. Is this action actively being taken? How much of the newly developed land is now planted?

3. Is the production chain well synchronised? Operations on an estate involve soil tillage, bed preparation, planting, herbicides application, fertiliser application, harvesting, loading, transporting and milling. Does the planning process identify early kinks in the production chain and thus allow for measures to be taken to resolve the issue in a timely manner to ensure that the milling process is not adversely affected?

4. Are there adequate utilisations of their owner-managed machinery? Should this process drive increased levels of equipment leasing (tractors etc) rather than owning? Essentially GuySuCo must own some of its equipment but there is scope for greater leasing of equipment whereby cash resources will only be used when equipment are engaged in productive income earning activities.

5. Is there active engage the workers to get their buy-in of the plans of the industry? GAWU most certainly is not fully on board and quite justifiable so. GAWU firmly believes that the management has under-performed resulting in this state of affairs. However at this critical junction in the industry’s future GAWU has to “give a little”, but when one reads in the national press that an Engineer is costing the industry over $2 million a month, there are no incentives for GAWU to give anything. The industrial relations aspect must be rebuilt since it appears that the employees no longer trust the employer. The sugar union should be brought to the table, along with their skilled accountant (thank you Yog) to assess the cash flow projections for 2010 with full evidence of each figure. The union must be advised of the strategies to increase revenue and reduce cost and what action the management will commit to, if there are significant adverse variances.

6. Is there adequate accountability in the industry? The term of employment for Heads of Estate and other Top Management Officers must be changed to contractual employees with clear performance benchmarks inserted into their contracts. For example, the Skeldon Estate will meet a target of X by 2010 and if not, these are the consequences, if there is no clear justification. No one should be sacred in the industry any more; it should be run like a business if it is to survive.

I said almost a year ago that sugar is Guyana’s blood stream and the haemorrhaging of the industry has to be stopped as it is intrinsically linked to the nation’s future. The evidence reveals that GuySuCo continues to suffer from poor decision making, improperly targeted resources, a mismatch of skills, under-performance of the operating systems and adverse weather. Of all these issues, GuySuCo’s biggest failure is its inability to strike a balance between rewarding hard labour/innovation on the Estates and executives protecting their turf. Weather disruptions can rapidly worsen an already poor financial situation as a result of poor leadership (I am not blaming Mr. Hanoman here; this is more directed at Booker-Tate Management and the previous local management many of whom are still in the system). Unfortunately, the weather was part of the problem, but the weather was not the main problem. It management duh!

Management has to come clean with the workers and slash waste and extravagance at all levels. The culture of investing in world class agronomical practices at all time must be embraced as well as listening to the workers. The industry itself is a reservoir of innovative ideas, but few of these bottom-up ideas see the light of day. Workers are best placed to know what would work best in their local situation but they get neither the resources nor support for their ideas to better the industry.

I think a start was made with the TP but the realities on the ground to date demonstrate that all is still not well at GuySuCo. The onus is on the Board of Directors to find out why the productivity, profitability and prosperity of the industry is not improving.

The management Guru Peter Druker said “Checking the results of a decision against its expectations shows executives what their strengths are, where they need to improve, and where they lack knowledge or information”.

He further stated that “Executives owe it to the organisation and to their fellow workers not to tolerate nonperforming individuals in important jobs.” I trust that members of the Board of Director at GuySuCo are students of Peter Druker.

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