Log sellout explained

MEDIA STATEMENT BY
ROBERT M. PussAUD
MINISTER OF AGRICULTURE
WITH RESPONSIBILITY FOR FORESTRY

A number of articles have been published recently in the public media on several issues including the lack of adequate supplies of forest products for the added value manufacturers resulting from the exportation of logs, and the non-compliance of the companies - Barama Company Limited and the Jaling Forest Industries Inc. – regarding implementation of their business plans.

Log Exports
The Government of Guyana, through the GFC Board of Directors and the Hon. Prime Minister Samuel Hinds held several meetings with the Forest Products Association (FPA) and the Guyana Manufacturers Associations (GMA) over the past two years on the issue of log exports and meeting the raw material demands of the manufacturers.

I as the Minister responsible for Forestry, continued this consultation process by engaging representatives of the FPA and the GMA in separate meetings on November 17, 2006. The consensus decisions arising out of those meetings based on my proposal were:

The FPA and GMA to nominate two (2) representatives each to be part of a committee to be convened by the GFC.


The FPA and GMA would submit position papers reflecting their ideas on the issue of log exports and raw material supply. The GFC would summarize the outcome of the previous discussions and circulate these to the FPA and GMA respectively.
The Committee will then develop a position paper that would be the basis for a public consultation in January 2007.
Following the public consultation, the Government will then refine its position on the exportation of logs and other related matters.

It must also be noted that the Government had earlier taken positive action to assure a guaranteed supply of raw Material to the manufacturers by providing them with access to prime state forest lands.

The clearly stated intention in providing access to these state forests was to guarantee not only these manufacturers, but also others, access to raw material to do added value activities. This proposal was accepted by the manufacturers and several have received State Forest Permissions


Non-compliance of Jaling and Barama
With respect to the non-compliance of Jaling Forest Industries Inc. regarding the implementation of their business plans, I met with the top management of the Company on November 23, 2006. I articulated the expectations of the Government that the business plan must be complied with, and requested a detailed proposal outlining Jaling’s actions to remedy the situation. Jaling submitted a twelve (12) month plan beginning January 2007. This plan will see the completion of the sawmill, veneer and kiln drying complex by December 2007. It is also projected that there will be a total extraction of 60,000 m³ for 2007; of this 47.7% will be sold to the Karlam Sawmilling Complex in Linden, 30.0% will be converted into squares and 22.3% will be sold locally.

In terms of employment, a ratio of 80:20 (local to expatriate) is proposed for 2007. This is to be further increased to 85:15 in 2008.

A similar meeting was held with representatives of Barama Company Limited (BCL) on November 29, 2006 at which I made the following points among others:

Need for a reduced exportation of logs by BCL
BCL to submit a detailed proposal to address its non-compliance with the implementation of the Buck Hall complex.


Barama in its submission commits the company to the installation of Kiln Drying facilities and a finishing plant by March 2007. In addition, there will be installation of the veneer plant and construction of two (2) barges by September 2007.

The installation of the co-generation facilities is scheduled for completion by September 2007 and from January 2007, the sawmill at Buck Hall will produce three thousand (3000) cubic metres of sawn lumber on a monthly basis. This will see the reduction in the exportation of round logs, a condition I insisted on in the meeting with company officials.

Local employment according to the Company will be three hundred and fifty (350) by December 2007, while there will only be fifty seven (57) expatriates. Of this number, 40 will be skilled persons assigned specifically to the construction of the dry dock and barges.

The GFC will be increasing its presence at these operations to ensure strict compliance in accordance with the commitments made by the companies. Should there be any breaches, the Government will be forced to re-examine the terms of the concessions granted.

Further, the GFC will be carrying out, with immediate effect 100% verification of all exports to ensure species such as Locust and Crabwood are not exported.

I do anticipate that all stakeholders will support the initiative for broad-based consultations and discussion as we move to expand our forestry sector, particularly value-added activities.

December 8, 2006.