The purpleheart exported by Bulkan Timber Works was either dressed or kiln dried

http://www.stabroeknews.com/index.pl/article?id=56530973

The purpleheart exported by Bulkan Timber Works was either dressed or
kiln dried
Stabroek News, Sunday, October 14th 2007

Dear Editor,

I have read the letters in the press by Janet Bulkan and Howard Bulkan,
constantly attacking the Government and the Guyana Forestry
Commis-sion, accusing them of being corrupt, inefficient and not
transparent. Also the attacks seem to be deliberately targeted at the
Asian companies. I read about the immense contributions that Howard
Bulkan has made in terms of NIS payments etc. I also read about how GFC
only gets US$6 per log. Who was responsible for the construction of all
the road networks in the interior? I think that DTL is currently
maintaining a large portion of the road that the Bulkans will need to
use to truck their lumber out of the Alglass area. How many employees
do the Asian companies employ? Certainly not 50 or 100, but rather,
thousands. How many spin off industries do these companies support? Or
does the economics of Mr Bulkan not consider this?

GFC has also consistently written publicly that most of these
concession agreements of the Asian companies were done before the PPP/C
government. The PPP/C government is bound by these agreements until
they expire. What is so difficult to understand about this? Can't the
Bulkans see that the GFC and government's hands are tied because of
poor negotiations of a previous government. Also why did they not
question those arrangements then? Is it because only now there is a
democracy which allows for freedom and in this case "abuse" of speech?
Also, Mr. Bulkan should not behave in public as if he has not benefited
from the government's generosity. He should let the public know how
many tax concessions his company has benefited from.

The Bulkans love to talk about adding value and that government must
ensure that the added value manufacturers get adequate supplies of raw
materials. They also talk a lot about illegal activities. How then do
they account for the following?

There is a large demand for purpleheart lumber by several manufacturers
of purpleheart doors. Howard Bulkan is fully aware of this yet in 2005
and 2006; he exported approximately 4,000 M3 of purpleheart lumber or
the equivalent of 1,696,000 bm of purpleheart lumber. For 2007, he has
already exported 1400m3 or 593,600 bm. How many purpleheart doors and
furniture would these have made, Mr. Bulkan; or how many more jobs
would have been created. How much would you have reduced the raw
material shortage for the manufacturers, had you sold the lumber to
them instead of exporting it?

Let us look at the issue of transparency. Janet is always lobbying for
repossession of the underutilized concessions, and reallocation of
these through open and transparent mechanisms.

Like the Bulkans, I also have my contacts. A Conces-sion (Alglass)
expired and the GFC approached the board for permission to re-allocate
same as small concessions. The Bulkans used their position as the GMA
representative on the GFC Board of Directors to try to get the entire
concession of 300,000 plus acres for a group comprising themselves and
one other partner. Their proposal to the board was that they would form
a grouping of 200 plus chain saw loggers, and allow them to cut logs
and supply manufacturers such as the Bulkans with raw material.

The GFC objected to this and pressed for the board to take a decision
to advertise publicly the entire area, after which the Bulkan group
could apply. The board overruled the GFC but in the face of stiff
opposition by the GFC finally conceded and awarded directly to the
Bulkan group, 80,000 acres. Note that this was without any due
diligence as is being requested by these same individuals now for other
companies.

This is not the whole story. The concession was awarded since July
2006. To date the group is working the area themselves. There is no
more talk about the grouping of 200 chain saw loggers being coordinated
to harvest the area.

Is this all? No !! The group then lobbied the board to allow them to
defer payment of acreage fees; fees which all other small
concessionaires have to pay before they uplift their concession
agreement and are allowed to harvest. The board again disregarded the
advice of the GFC and granted the Bulkan group this facility. To date,
14 months after being issued with 80,000 acres of prime virgin forest,
the group Sustainable Timber Inc or Sustainable Forestry Inc (the
Bulkan Company) has not paid a single cent in acreage fees to the
government or the GFC.

Yours faithfully,

Usha Pertab

Editor's note

We sent a copy of this letter to Mr Howard Bulkan of Bulkan Timber
Works Inc for his comments and received the following response:

"Thank you for providing an opportunity to respond to points raised by
Ms Usha Pertab in her letter concerning the forest products enterprise
Sustainable Forest Inc. (SFI). I think it would be helpful if my reply
concentrates on points of fact, so that readers can compare our new
enterprise with other companies in this sector, both local and
foreign-owned. I would note in passing that Ms Pertab appears to have
had access to business information not in the public domain but
supplied to the Guyana Forestry Commission (GFC). Clause 13 in the
revised GFC Act passed by the National Assembly in July this year
imposes severe penalties for making use of information in this way,
unless such release has been authorised by the GFC. Perhaps the
Commis-sioner of Forests can extend his current enquiries into a
variety of malpractices to the misuse of information by his own staff
or in the parent Ministry ?

SFI's State Forest Permission (SFP) - the SFP covering part of the
Alglas concession for the SFI group originated from a suggestion from
the Forest Pro-ducts Association (FPA) that the Guyana Manufacturers
and Services Association (GMSA) should put "our money where our mouth
is". In other words, if we wanted wood we should go and cut it
ourselves and leave the FPA to export the logs. The unworked Alglas
concession was rescinded by the GFC in 2005, and the FPA suggested that
we be given that area to work. This suggestion was taken up by the GFC
and the short-term State Forest Permission was awarded to three GMSA
members.

Our company - SFI is a joint venture company incorporated in 2006 by
three local companies: Precision Woodworking Ltd, Farfan & Mendes Ltd,
and Bulkan Timber Works. At our launch in November 2006, we made a
public commitment not to export logs in order to gain market acceptance
of Guyanese timbers less well known commercially. We are using modern
light-weight, thin-kerf mobile bandsaws in the forest so that all
naturally defective and unusable timber is left to decay back into the
forest soil, at or close to the stump of the original tree. We are not
transporting logs from the forest to our manufacturing plants and then
having to dispose of large volumes of waste wood; which is a long-term
problem for some members of the Forest Products Association. All the
purpleheart exported by Bulkan Timber Works and mentioned by Ms Pertab
was not rough sawn lumber, but either dressed or kiln dried and dressed
as flooring, decking, mouldings, etc. Such processed timber is
therefore considered a highly value added product, similar to wooden
doors.

Investment incentives - our fiscal benefits are published annually by
the Guyana Revenue Aut-hority. Benefits to Bulkan Timber Works in 2005
and 2006 were GY$0.6 million dollars and zero respectively. For
comparison, the GRA figures for Barama were GY$146.8 million and
GY$304.5 million. Readers can do the math and compare. To date we have
invested G$245 million in the concession, employing 40 Guyanese in what
is a model portable milling operation producing what we believe is the
best quality lumber in the country at conversion efficiencies
un-matched in Guyana. At no time during the negotiations for the
concession was there any suggestion that we would turn over the forest
area to 200 chainsaw loggers.

The road system - the road networks used by Sustainable Forest Inc. to
extract our lumber and access our concession were made by the
Government of Guyana (Mabura Road) and Mekdeci Mining Company (MMC) and
maintained by them and Omai Gold Mines. Not by DTL. All other roads
will be made by SFI. No doubt these will also be used by miners when we
move into our Mowasi compartment. Under the Public Lands (Private Roads
Act), Cap 62:03, a road constructed by a forest concessionaire cannot
be restricted except by ministerial order.

Production forecast - we hope to demonstrate to the GFC that we would
have paid more revenue in royalties per acre than any other timber
company in Guyana by the end of this calendar year, and we are only in
project year one. Our objective is to provide the raw materials for our
manufacturing plants. To date, only 3 per cent of our production is in
the two timbers which we prefer - purpleheart and locust - but we are
determined to market what is there in the forest. It is our intention,
once we have increased our production, to supply preferentially the
local manufacturers with high-grade accurately-sawn lumber, as we have
been doing - it is written into our contract with the GFC.

Acreage fees - all the acreage fees have been paid in full . The
moratorium on the payments for 2006 was not as a result of our lobbying
the GFC board. To date we have paid about G$ 2 million in acreage fees,
G$ 0.37 million sawmill licences and G$1.2 million in royalties - a
total of G$3.5 million - even though we only started production in
March of this year and lost close to 3 months due to the excessive
rainfall in these last few months.

A model for other enterprises ? - during the last few years I (among
others) pointed out the invasion by Asians into our forest sector who
are simply here to mine our logs. I urged the GFC to look again at our
log export practices (they have never been national policy), and
instead to insist that these investors (all of whom come with fancy
business plans) process the logs in Guyana thereby creating jobs for
Guyanese. So let me say as a Guyanese that I welcome foreign investors
in the forest sector with all of us operating on a level playing field.
That must include a commitment by these investors to process the logs
here. If not, they should stay in Asia.

Finally I am sure all patriotic Guyanese would have welcomed President
Jagdeo's who is also our Minister of Forestry, stated commitment at his
recent press conference to investigate the alleged wrong doings now
surfacing in the wood sector."