Gov't assured no assets, shares moved from DTL to Bai Shan Lin -Agri Minister

http://www.stabroeknews.com/index.pl/article?id=56528591

Gov't assured no assets, shares moved from DTL to Bai Shan Lin -Agri
Minister
Stabroek News,
Tuesday, September 11th 2007

The Guyana Forestry Commission (GFC) held a meeting on Tuesday August
28, with the senior management of Demerara Timbers Limited (DTL) and
Bai Shan Lin and received assurances that there has been no transfer of
shares or assets from DTL to Bai Shan Lin.

According to Minister of Agriculture Robert Persaud, DTL was still in
control of both the management and administrative aspects of its
operations.

He said the companies were considering either a complete or partial
takeover of DTL by Bai Shan Lin in the future. However, he added, both
parties have committed to keeping the GFC fully informed of any such
development and following the required government/GFC procedures.

According to the minister, DTL has been engaged in logging and the sale
of logs/lumber to local and overseas markets and was now about to enter
the value added arena.

"DTL does not have the necessary expertise to produce the quality of
the value added products, nor access to the niche markets to get better
prices," the minister said.

In order to address these shortcomings, he said, DTL has formed a
strategic alliance with Bai Shan Lin for these specific purposes
(product development/marketing). The minister said there have been no
staff changes at the Mabura complex.

President Bharrat Jagdeo said at a press conference last week that he
had mandated the GFC to ensure that the arrangement between the two
companies was given due attention. Repeated efforts to reach
Commissioner of Forests James Singh on the issue had proved futile.

Observers had expressed scepticism on the arrangement between Bai Shan
Lin and DTL, given the way change of ownership and transfer of assets
had been effected among Asian companies operating in Guyana.

DTL had told this newspaper that it was involved in a technical
management arrangement with Bai Shan Lin, but was in full control of
itself. Speculation had been rife over whether Bai Shan Lin had taken
over DTL.

According to Howard Bulkan, writing in this newspaper's letters column,
if DTL only has a 'Technical Assistance Management Agreement' with Bai
Shan Lin, "why did they erect a giant signboard at the gate of their
Mabura operations announcing 'Bai Shan Lin/Demerara Timbers'? And why
was the signboard taken down a few weeks later?"

He pondered that if DTL's agreement with Bai Shan Lin only covered the
movement of shares within a specific company as stated by letter writer
Preamnarine Karan on August 30, it may be similar to what he referred
to as the recent buyout in which Danny Chan of Jaling sold state
forests to Bai Shan Lin for over US$19 million.

A few months ago, Bai Shan Lin had been banned from exporting logs
because of its failure to live up to investment timetables.

Earlier this year, this newspaper had reported that Bai Shan Lin Inc
had secured the rights to 400,000 hectares of forest for a period of 20
years, according to the company's website. The website said the company
would be processing logs harvested from the Jaling concession.

CEO of DTL S.K. Chan had said in a letter to Stabroek News that in line
with government's policy of further downstream processing of timber
products, the company had embarked on a technical assistance management
agreement with Bai Shan Lin "to secure the market linkages in China…"
It did not provide any further details on this agreement.

Earl Julien, Site Manager at Bai Shan Lin's Coomacka operations in
Region Ten, had earlier told Stabroek News that his company was in the
process of "taking over the operations" at DTL's Mabura location. This
was confirmed by Bai Shan Lin's Administrative Manager Karen
Canterbury.

However, Chan's letter said the arrangement with the Chinese-owned
company would add processing equipment to its existing mills at Mabura
to produce a wider range of value added timber products. He said too
that DTL only deals in logs it harvests itself in its licenced areas of
operation under the Forest Management Plan and Annual Operations Plan
as approved by the GFC.