Despite log export ban. - Bai Shan Lin proceeding with investment plans

http://www.stabroeknews.com/index.pl/article?id=56521142

Despite log export ban.
Bai Shan Lin proceeding with investment plans
By Johann Earle
Stabroek News
Monday, May 28th 2007

In spite of it being banned from log exports, Bai Shan Lin has not
shifted from any of its plans and still intends to carry out all that
it has committed to doing, including the building of sawmills for
downstream processing.

This is according to Admi-nistrative Manager of Bai Shan Lin, Karen
Canterbury who spoke to this newspaper recently. But she said that the
company is not prepared to make further statements at this time in
relation to the log export ban.

During its launch in January, the company had said that it plans to
establish two large-scale timber processing factories in Linden and
Georgetown, with the purchase of a sawmill in Linden that was
previously owned by Jaling Company.

Since the Ministry of Agriculture's action against Bai Shan Lin, stern
action has also been taken against Jaling Forest Industries Inc for its
failure to deliver on commitments made to the Govern-ment in it
agreement.

The government on May 6 announced that the Timber Sales Agreement (TSA)
awarded to Jaling had been suspended because of non-compliance with
undertakings made.

The GFC noticed that after the Timber Sales Agreement with Jaling, the
implementation of several key aspects of Jaling's business plan, such
as a kiln-drying complex and other value added activities were
significantly behind schedule. There were several meetings between
Jaling's management and GFC but the remedial actions taken were not
satisfactory.

Minister of Agriculture Robert Persaud along with the GFC then held
meetings with Jaling's senior management and a 12-month period was
agreed on for the implementation of remedial action beginning in
January, 2007. According to the Ministry, an evaluation of the degree
of compliance with that plan was recently conducted, and it was
determined that some critical areas are still behind schedule.

The Ministry of Agricul-ture release said too that to compound matters,
the shareholders of the company JFII were recently engaged in major
transfers of shares which have resulted in an internal shareholder
dispute now being addressed in China and that the change in
shareholding was done without the necessary disclosure to the GFC.
Jaling was not prepared to speak on the issue when contacted by this
newspaper last week.

Bai Shan Lin still plans to invest approximately US$100M dollars over
the next three years for value added processing as well as timber
harvesting and hopes to have an annual production capacity of 300,000
to 500,000 cubic metres. The company had in January announced its
US$4.5 million investment plan for wood processing.

Bai Shan Lin has so far brought in from China and other countries more
than US$10M worth of various kinds of logging equipment.

The company is 49 per cent owned by BUCC, a construction company of
China which has businesses in various countries of the world. Funding
for Bai Shan Lin comes directly from BUCC.

Bai Shan Lin had appealed to Minister Persaud to allow a grace period
of 12 months during which the export of round logs would be allowed,
but this didn't change things. Persaud reminded the company of the
commitment it had expressed to become engaged immediately in
value-added activities and encouraged it to move in this direction.

Persaud, speaking to this newspaper last week said that shortly there
will be an articulated forestry policy for which consultations have
been ongoing. He said that for Jaling and Bai Shan Lin, the position of
the Government remains the same. He said that he has not received any
feedback from the Guyana Forestry Commission indicating that the two
companies have approached the authorities with any new proposals
regarding their operations.