Better log-to-lumber conversion rates can be achieved with appropriate equipment

http://www.stabroeknews.com/index.pl/article?id=56522417

Better log-to-lumber conversion rates can be achieved with appropriate
equipment
Stabroek News, Thursday, June 14th 2007

Dear Editor,

In your report captioned "FPA against 'indiscriminate' restrictions on
log exports" published in SN on June 11, you quote the FPA on sawn
timber and log export prices for prime species. The FPA suggests a best
domestic and export price of US$ 374 per cubic metre, and a
log-to-lumber conversion rate of 40 per cent. As Andrew Mendes of
Farfan and Mendes has shown for the Guyana Manufacturers and Services
Association, recovery rates can be improved with more appropriate
equipment (lighter, cheaper, mobile bandsaw mills) to 70 per cent or
better. Instead of the FPA rate of 2.5 cubic metres of log @ US$ 190
per m3 for 1 cubic metre of lumber, the sawmiller would need only 1.43
m3 of logs with better mills.

The miller is then using US$ 271 worth of logs instead of the FPA's US$
475 so milling is immediately a more attractive financial proposition.
In fact, the monthly statistics from the Forest Products Marketing
Council (FPMC) show that some prime timbers may obtain considerably
higher export prices as lumber, but would be more rationally converted
into higher valued finished products such as flooring and furniture.

For comparison, in Peninsular Malaysia, merbau timber comparable with
our purpleheart sells for millgate log prices of US$ 420 upwards and
the sawn timber sells at millgate for US$ 570 upwards, per cubic metre.
The low price suggested by the FPA for sawn timber exported from Guyana
is a reflection of poor quality control and weak or non-existent
marketing by locally-owned enterprises (see Lachlan Hunter's
consultancy report of 2001), and possibly some manipulation of data
provided to Customs (as Guyanese prices are lower than regional prices)
by enterprises with closely linked overseas buyers. Moreover, the FPMC
data show that some parcels can make much better prices.

It is indeed unfortunate that so many of the traditional family-owned
mills in Guyana are equipped with sash gang saws intended for
near-perfect north-temperate zone conifer logs, but quite unsuitable
for the often-defective Guyanese hardwood logs from natural rainforest.
In the national interest of maximum net social benefit, that is not an
argument for allowing those decrepit and unprofitable mills to be used
as an excuse to continue log exports. There is no national policy in
favour of log exports but four major policy statements in favour of
local processing (National Development Strategy 1996 for 2000-2010,
National Forest Policy 1997, National Forest Plan 2001, and the
Go-INVEST website declarations). In addition, the pre-election
manifesto of the PPP/C in 2006 contained no less than four statements
in support of a value-adding timber industry (page 15).

It is disappointing that the log export ban, however feeble, has not
yet been implemented, following agreement by the Ministry of
Agriculture after the February 17 consultation on log export policy.

Why should Guyana continue to export jobs and skills and national
income because some FPA members choose to landlord their concessions to
foreign loggers and will not modernise their mills?

Yours faithfully,

Mahadeo Kowlessar