Barama's inaction caused shortage at plywood factory - Minister Persaud

Barama's inaction caused shortage at plywood factory - Minister Persaud
Kaieteur News, 6 December 2007

Barama has only itself to blame for the shortage of peeler logs to
supply its plywood factory. So says Minister of Agriculture, Robert
Persaud.

The Minister's statement comes shortly after an announcement by Guyana
's logging giant that it is being forced to close its factory because
it is running out of Baromalli peeler logs which are being used to
produce plywood.

Barama Company Limited (BCL), in a press statement earlier this week,
said that affected employees, numbering over 300, will be absorbed by
its new sawmill lines at Buckhall, Essequibo , where there are plans to
substantially increase production.

Yesterday, the Minister said that Barama is only utilizing 20% of its
allotted extraction level and he expects the company to “significantly
increase the magnitude of operations in its own leased concession area
beginning in 2008…”

The Minister and Commissioner of Forests James Singh met with Barama's
Chairman Girwar Lalaram, Chief Executive Officer Peter Ho, and the
General Secretary of the Guyana Labour Union, Carvil Duncan, during an
emergency meeting on Tuesday at the ministry.

In explaining how Barama ended up in its predicament, the ministry
noted that, in October, the company was given a cease-order to harvest
in a number of third-party concessions because of breaches of Guyana
Forestry Commission's procedures.

Shortly afterward, the Ministry said, Barama indicated that, in the
interest of the workers, it was prepared to facilitate access to raw
materials for the plywood factory, “but only as part of a transition
process that will eliminate any approved sub-contractual arrangement by
December 31, 2007.”

The GFC then requested Barama to send staff members to meet with the
GFC in an effort to work out the conditions and logistics of such an
arrangement. “To date, the GFC has had no positive response to this
request by BCL,” the release disclosed.

The GFC is still willing to facilitate such a process, but in
accordance with very clearly defined conditions.

“It was later verified that BCL had committed additional breaches of
procedure in the forest concession leased to Guyana Sawmills Inc.
(GSM). GFC indicated that it would allow BCL to remove and utilize the
peeler species already harvested in GSM (GSM's concession), on
condition that BCL formally communicate its commitment to pay the
required compensation in accordance with the GFC procedures.”

This stipulation was necessary, says the ministry, because once the
logs were utilized, GFC would have no evidence in the event that BCL
refused to pay the necessary compensation. Despite repeated requests by
the GFC, BCL has sent no formal commitment.

“GFC has held several meetings with senior staff of BCL to express
concern that the forest concession of one million, six hundred and
twelve thousand (1,612,000) hectares was being significantly
underutilized. The GFC mandated BCL to pursue increased beneficial
utilization of the forest concession within the GFC's allowable limits.
BCL, at a meeting on October 31, 2006, gave a commitment to increase
the utilization of the area issued to it.”

According to the ministry, BCL's utilization of its concession is about
20 % of its allowable harvest. For the period 1998-2006, the total
cumulative allowable production was 3,382,470 cubic metres, or an
annual allowable cut of 375,830 cubic metres. “The actual production
for the period 1998-2006 is 676,372 cubic metres, or an annual average
of 75,152 cubic metres. This corresponds to a level of utilization that
is approximately 20 %. These figures illustrate the point that BCL is
under-utilizing its concession, even though it gave a commitment in
2006 to improve productivity in accordance with the limits established
by the GFC.”

According to the ministry, as a consequence, a substantial number of
felled peeler logs are on the ground in the concession leased to GSM.
Another quantity of felled peeler logs is also currently on the ground
in a concession leased to Toolsie Persaud Limited. The GFC has informed
BCL that it can access these logs if certain requirements are met.

The stated “severe supply shortfall of peeler logs” is therefore as a
direct consequence of inaction on BCL's part.

“The Ministry expects that the Company will review its position and
take a more compassionate stand regarding the future of the employees
of the Land of Canaan Plywood Mill ,” the release urged.