Demerara Timbers to be taken over by Bai Shan Lin

http://www.stabroeknews.com/index.pl/article?id=56527266

Demerara Timbers to be taken over by Bai Shan Lin
By Johann Earle
Stabroek News
Tuesday, August 21st 2007

Chinese logging and wood processing company Bai Shan Lin is in the
process of taking over the operations of another Asian-owned firm,
Demerara Timbers Limited at Mabura, says site manager Earl Julien.

But he could not provide the details of the arrangement since he is
stationed away from the administrative office. Bai Shan Lin was
recently banned by the government from making any export of logs
because of its failure to live up to its commitments outlined in its
agreement with the Government. Julien assured that the logs from the
new supplies will all be processed at the company's sawmilling facility
at Coomacka in Region Ten.

Also Asian-owned, DTL in February 2006 signed an agreement with
Iwokrama for the sustainable harvesting of the latter's forests.

Concerned letter writers said that DTL, the second largest Asian
multinational company in Guyana, was logging in large leases outside
its concession, also through direct and indirect contracts. DTL was
formed out of the previously state-owned Demerara Woods Limited.

Bai Shan Lin's Administrative Manager Karen Canterbury said that the
company would be providing more information on the details of the
takeover in due course.

Officials from DTL were tight-lipped when asked yesterday about the
possible merger between the two companies or takeover of DTL by Bai
Shan Lin.

DTL entered into a partnership with the Iwokrama International Centre
for sustainable forestry harvesting and processing of timber in the
Iwokrama forest over the next two years. Iwokrama has already invested
some US$360,000 of its self-generated and donor funds in forest
harvesting preparatory studies and DTL is investing between US$1M and
US$2M.

The two entities last year signed a Memorandum of Agreement (MOA) for
the establishment of a joint venture in which Iwokrama, through its
subsidiary Iwokrama Timbers Inc (ITI), will have the majority
shareholding of 51 per cent. A separate profit-sharing agreement will
allow DTL to maintain a reasonable return on its investment.

Asked why DTL, Director General of Iwokrama Dr David Singh said that in
the centre's view, that company has a proven track record of
large-scale logging in Guyana.

He said monitoring would be done on two levels: on that of management
to ensure that all the targets are met, and on the level of regulatory
requirements to ensure compliance.

Harvesting will be restricted to the half of the Iwokrama forest
allocated for sustainable utilisation. It is unclear what impact Bai
Shan Lin's takeover will have on this agreement.

An observer said that she passed through Mabura recently and saw a
signboard which read DTL/Bai Shan Lin. "It seems these two companies
have joined forces. So I think from now the export of logs from DTL
will be on the increase," the observer said.

According to the person, the workers were already told of a scale down
of Guyanese workers and a subsequent increase of Chinese.

Bai Shan Lin has been in the news of late with accusations of
mistreatment of its workers and the breaching the labour laws and
regulations. A visit to Coomacka by the media recently found that the
company was very lax in its enforcement of safety standards and allowed
workers to carry out dangerous tasks with little or no protection. The
company uses very old, outdated machines leading to wastage of wood.
Julien had told this newspaper that the company has a recovery rate of
just 35 per cent whereas industry expectations are around 50 to 60 per
cent.

There is growing concern here about the practices of Asian-owned forest
companies and the absence of transparency in their operations. DTL,
following its purchase by Singapore-based investors several years ago,
has hardly been open to media enquiries.