Granma publishes details about new sugar company

Granma publishes details about new sugar company

Announcing another round of layoffs in the sugar industry, Communist
Party daily Granma in a two-page spread laid out the structure of a new
state sugar company.

With the goal of cutting administrative cost by 55 percent and reaching
productivity goals that were not met after a first wave of changes and
cutbacks since 2002, the government dissolved the once-powerful Sugar
Ministry (MINAZ) and created a new state company that reports directly
to the Council of Ministers and whose success will be measured in profits.

The new company, called Grupo Azucarero, consists of 13 provincial
enterprises with 56 sugarmills; five aging mills will be completely shut
down, the newspaper said. Grupo Azucarero will manage a total of 814
production units, down from 932 in 2010, when the industry still was
directly operated by the Sugar Ministry. While the remaining sugarmills
will not be independent, they will enjoy more autonomy.

The company will pay sugarcane producers a price that adapts to world
sugar prices. In what is a novel move during the current harvest,
producer prices were raised from 50.90 pesos per ton to first 95 pesos,
and then to 104 pesos. Grupo Azucarero must liquidate existing debt with
producers within 20 years; sugarcane producers now pay a 5-percent sales
tax.

The government expects Grupo Azucarero to yield a profit of 120 million
non-convertible pesos in 2012, Granma said.

The Foreign Trade and Investment Ministry (MINCEX) is now working with
Grupo Azucarero to develop sugar export strategies. MINCEX also oversees
foreign investments in the sugar sector.

"A vital question in this reordering is decentralization, as a way to
lighten structures and eliminate red tape," Granma said. "In addition to
using resources more efficiently, this measure allows shortening
administrative distances and facilitating management. The new structure
will allow reinforcing contractual responsibility between entrepreneurs."

The sugar company is part of a new generation of state companies —
called Organizaciones Superior de Dirección Empresarial (OSDE) — that
enjoy a higher degree of budget autonomy.

http://www.cubastandard.com/2011/11/19/granma-publishes-details-about-new-sugar-company/