Contract signed for construction of $110M sugar factory
Kaieteur News
July 4, 2004
The Guyana Sugar Corporation (GUYSUCO) and Chinese company CNTIC have signed a contract for the construction of a modern US$110 million sugar factory and cogeneration plant at Skeldon, Berbice.
The contract was signed on June 22 in Beijing.
A symbolic exchange of the contract was done yesterday by Chairman of GUYSUCO, Ronald Alli, and China’s Ambassador to Guyana, Song Tao.
Alli told reporters afterwards that the project’s total cost was contained to the original estimate of US$110 million despite the current price escalation in steel, fuel and freight.
Funding is being provided in part by the World Bank, International Monetary Fund and the EXIM Bank of China.
GUYSUCO will contribute to the project via self-generated funds and revenues from land sales.
Alli announced that financial support in the sum of US$25M has been received from the Caribbean Development Bank for the agricultural extension of Skeldon estate to provide adequate supplies of cane.
He said preparatory works for the factory have been completed and land preparation for additional acreage to be planted by GUYSUCO is progressing satisfactorily.
He disclosed that the project will provide for increased private sector development via private cane farming which is expected to contribute to 30% of the factory’s cane requirements.
Commissioning of the completed factory is targeted for January 2007.
Alli said power generation will, however, commence sooner through the incorporation of a 10-megawatt (mw) diesel plant that will be functional in 22 months.
He added that thereafter, the Skeldon factory will produce 30 mw from bagasse of which GUYSUCO will export 10 mw to the national grid for continuous power to New Amsterdam and Corriverton.
“This project signals the sugar industry’s policy change from a sugar producer to a value-added processor, thus opening new markets and attracting higher prices,” the GUYSUCO Chairman said. “There will be efficient utilisation of bagasse through cogeneration providing power to the national grid. There will be utilization of molasses by the introduction of a distillery and there will be conversion of raw sugar to refined sugar with the addition of a refinery in the near future,” he explained.
Alli stated that the recent announcement by the EU on reforming its sugar regime and lowering the price of sugar paid to its traditional suppliers from the ACP countries cannot be taken lightly.
“We certainly are not prepared to accept such an act of bad faith and a departure from the Cotonou agreement at this time. We have registered our strongest objections and all is in train, both at the CARICOM and ACP level, to protest the EU’s bold and abrupt proposals which place many poor nations at risk of economic devastation,” he indicated.
The chairman said, the Skeldon factory is one component of a strategic plan which aims at improving GUYSUCO’s productivity and reducing costs to ensure the sustainability and viability of the industry.
Ambassador Tao said CNTIC is a renowned company with abundant material resources and high technical expertise.
The project is fully supported by the Chinese government, he said.
He revealed that the government of China is willing to provide a preferential loan to support the project.
He stated that with the completion of the project, Guyana’s sugar industry will be able to address and survive future challenges and continue to be the driving force of the local economy.
The Ambassador said China will always support Guyana’s efforts to develop the country and continue encouraging Chinese enterprises to invest in the country.
He expressed the hope that more Guyanese entrepreneurs will visit China to explore potential opportunities of cooperation.