US$26M saw milling investment set to take off next month
Stabroek News, Sunday, March 16th 2008
US saw milling company Simon and Shock Incor-porated (SSI) hopes to get
its US$26 million investment in Guyana started next month.
It is in the process of working out some aspects of its agreement in
the light of changes owing to problems in the industry with
land-lording of small concessionaires.
Speaking to this newspaper on Tuesday, CEO Kelly Simon said that with
the new measures in place to prevent land-lording by companies on other
concessions, the newly tailored arrangements for the use of equipment
in these concessions were in their end stages.
He said that the company proposes to lease its equipment to the
concession holders and train them in the safe and proper use of the
equipment, which he described as brand new.
According to Simon, someone on the government side asked whether the
company was willing to give the equipment to the concessionaires, to
which he said no way, since his investors wouldn't allow US$4 million
in equipment to be handed over just like that.
After months of due diligence and some tension between the company and
the Guyana Office for Invest-ment (Go-Invest) last year, government
through the Guyana Forestry Commis-sion (GFC) granted a State Forest
Exploratory Permit to SSI about two and a half months ago.
The company has been awarded concessions totalling 391,892 hectares in
Regions Six and Nine and expects total employment to exceed 112 with at
least 85 per cent local hire, ranging from senior management to
starting positions.
The company plans to invest over US$26 million in three years.
The technology that the company hopes to introduce to Guyana is said to
have impressed government, which has been chirruping its desire lately
to bring sustainable forestry, high recovery rates, and value adding
investment to the industry. This followed President Bharrat Jagdeo's
offer of Guyana's forests to the world to combat the effects of climate
change.
The company is also working out with the government, the exact location
for the sawmilling plant to be constructed at Linden.
While on the phone with this reporter, Simon was also speaking to the
company's lawyers on the paperwork to be drawn up for the commencement
of the investment. He said that another company executive would be in
Guyana during next week to further the arrangements with the
government.
Simon said SSI hoped to achieve recovery rates upwards of 70 per cent,
twice as much as is being achieved in Guyana today.
The company is building from the ground up, a brand new, modern
sawmill, which, with the aid of computer imagery, will be able to scan
a log and calculate the number of boards that it would yield.
In this way, the little waste it produces would be used to power its
kiln-drying plant. The company would be buying about half of its logs
from other concessions.
As a direct result of the talks with the government, the company
offered three written guarantees. Firstly, that SSI would not export
logs from Guyana, since it was a lumber company and not a logging
company; secondly, that SSI would build an advanced milling complex in
Linden before any logging activity took place; and thirdly, that if SSI
did not build the advanced mill in Linden in a specific time period,
all logging concessions granted to SSI by the government would be
returned uncut.
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