Wood products sector saw 63 investments in 18 months -Go-Invest

http://www.stabroeknews.com/index.pl/article?id=56527780

Wood products sector saw 63 investments in 18 months -Go-Invest
Stabroek News
Wednesday, August 29th 2007

Go-Invest CEO Geoffrey Da Silva says from January 2006 to June 2007,
Go-Invest, the Guyana Forestry Commission and the Forest Products
Marketing Council have promoted and facilitated 63 investment projects
in the wood products sector with 32 coming from local investors.

DaSilva also noted that 'downstream production' is increasing to new
markets and he disclosed that most of the new foreign direct
investments (FDI) and joint venture (JV) projects are, or will be,
manufacturing finished products such as shingles, flooring, mouldings,
decking and dimensional kiln-dried lumber for new markets in North
America and China. He observed too that manufacturers have also been
making use of the lesser used species.

63 private sector projects

In a statement the Go-Invest CEO said the agency has had a very good
year and a half with 63 private sector investment projects coming from
24 foreign direct investments, 7 joint ventures with foreign investors
and 32 local investors.

The statement added that full details on the 63 projects, including the
names and investments of the companies, will be published shortly.

He puts the total investment at $16.1B or US$80.7M, adding that a total
of 1,740 new jobs were directly created.

Da Silva also disclosed that the foreign exchange earnings for 2005 was
US$48M and in 2006 it jumped to US$62M while for this year US$74M is
projected.

Highlighting (FDI) Foreign Direct Private Sector Investment which drew
24 foreign investors and JVI (Joint Venture Private Sector Investment)
with 7 Guyanese together with foreign investors, the Go-Invest CEO said
that amounted to US$72.6M - that is 90% of the total US$80.7M that was
invested in the sector.

Moreover, he said, 1,191 new direct jobs were created.

According to Da Silva, the 31 foreign direct and joint venture (FDI and
JV) private sector investments, including 10 overseas-based Guyanese,
came from the United States (6), Holland (2), Canada (4), Malaysia (4),
China (5), Trinidad and Tobago (2), Brazil (1) the United Kingdom (3),
Denmark (1), Cayenne (1), Venezuela (1) and Germany (1).

The six investments from the US, he stated, are a carbon credits and
reforestation project; a forest conservation project; two small
sawmills with overseas-based Guyanese; another small sawmill with an
American investor; and a joint venture shingles factory.

Local investors

DaSilva said further that 32 local investors invested $1.6B or US$8.1M
and created 549 new direct jobs. Of equal importance, he observed,
these 32 domestic investors are manufacturing finished products,
increasingly from the lesser used species, for the Guyanese and export
markets - doors, outdoor furniture, flooring, dressed and kiln-dried
lumber, office furniture, shingles, pre-fabricated wooden homes,
spacers, bedroom furniture, nibbi furniture, crane mats, joinery lumber
and mouldings.

Meanwhile, a very exciting new trend in this sector is the
establishment of offices in Guyana by five internationally-renowned
companies that are buying downstream tropical hardwood products,
including the lesser used species, from Guyanese companies. They are
McCorry Limited (from Malaysia/United Kingdom), DLH Nordisk (from
Denmark), KM Trading (from Venezuela), ATC (from Holland) and Totem
Forest Products (from the United States).

New projects at 37%

Forty of the projects are expansions/re-investments and the other 23
(37%) are new investments. This is better than the international
average, Da Silva added, where usually 20% of the total annual number
of investment projects are new. Forty-seven (75%) of the private sector
investments are at present in operation, and 14 are in the
"pipeline"/pre-operation phase, while 2 small projects have stopped
their operations.

Fiscal concessions

According to the Go-Invest CEO, 18 local companies, 11 FDI (Foreign
Direct Investment) and 2 JV (Joint Venture) companies applied for and
were granted through Investment Agreements (IAs) significant fiscal
concessions (waivers of Customs Duty, Value Added Tax and Excise Tax on
equipment, machinery and vehicles) amounting to hundreds of millions of
Guyana dollars.

The Investment Agreements (IAs) for another 9 companies are being
processed, while 23 companies did not apply for fiscal concessions
because they were seeking land or they are buyer companies.

In terms of size, 7 are large projects (11%), 21 are medium (33%), 34
are small (54%) and 1 is micro.

And looking at their geographic locations, 24 are in Region Ten (38%),
21 are in Region Four (33%), 3 are in Region Three, 3 are in Region
Nine, 2 are in Region One, 2 are in Region Two, 1 is in Region Six, 1
is in Region Five and 1 in Region Seven while 5 companies are operating
in more than one region.