Barama ‘bouncing back’ with $1B investment in expansion; eyes return to logging
Barama Company Limited, which has been associated with Guyana’s forestry sector for 30 years, plans to make an investment of $1 billion to expand its local operations and make a return to the logging industry.
This is according to the General Manager Mahendra Chand, who was speaking at the company’s Land of Canaan, East Bank Demerara headquarters on Sunday. Then, the company celebrated its 30th year of operations in Guyana.
According to a press release from the Office of the President, Chand in his presentation projected that the log intake for next year would be between $800 million and $1 billion from local operators. This is expected to create hundreds of new direct and indirect jobs.
And, on Sunday, the company also launched a new water-resistant plywood. Importantly, Chand highlighted that the company is looking to finalise an investment of nearly $1 billion to expand its operations again, which includes returning to the logging business.
For context, Barama had invested in excess of US$43 billion in its operations in Guyana since its establishment in 1991. The logging firm was considered one of the country’s largest employers with approximately 800 Guyanese workers.
But, in 2016, Barama did not renew its contract with the government and it was reported that some 600 workers were laid off. Subsequently, the company came under the management of Guyanese and began focusing on the production of plywood.
According to the press release, President Dr. Irfaan Ali said that the government is aware that Barama was forced to relinquish its forest concession in 2016. That concession was then divided and allocated to other players in the sector. As such, the company was forced to cut back on its operations and lost an investment of about US $15 million.
More recently, however, efforts have been made to assist the company in ‘bouncing back’. While providing the feature address at the anniversary celebrations on Sunday, President Ali said that the government welcomes and embraces the company’s bold projections for its future.
Importantly, the President added that his government will do all that it can to fuel the growth of Barama and others in the sector.
Already, the General Manager acknowledged that the government lobbied for the relaxation of the Common External Tariff (CET) of imported ply in Guyana from 10 per cent to 35 per cent, as well as the reduction of taxes on the importation of vehicles for the industry and other government policies.
These measures, the President said, were instituted because the government recognised the decline in Barama’s operations and the Forestry Sector as a whole.
Meanwhile, President Ali also emphasised: “The Government is willing to work with the sector in ensuring that we move towards product certification because we cannot speak about access to new markets or opening up new markets in isolation of the product certification.
“That is a necessary tool to enter the market.”
President Ali also said that a collaboration between the government and the Guyana Manufacturing and Services Association (GMSA) is needed. And, for production volume to increase, he said a value-added commitment that is linked to quality control and consistency must be made.
Additionally, it is necessary to develop a system of efficiency in the local market and a strategic formula on how local demands for value-added products are driven.
REDUCING ELECTRICITY COSTS
Importantly, the President underscored that the government recognises the negative effects of the high cost of energy on the manufacturing sector. He said that this is why his administration is moving towards the proposed gas-to-shore project, the Amaila Falls Hydro Project and others in a bid to halve the cost of electricity.
“My government is committed to supporting efforts to shift production to more value-added products.
“As such, I am impressed by the efforts that I have seen today and which are being made by Barama to diversify its product line,” he said.
The Head of State said that the GMSA, the Forestry Sector, the Government and all the stakeholders need to form a consortium that is not only driven by profit, but driven by the development of the sector and the development of opportunities for the sector.
Minister of Foreign Affairs and International Cooperation Hugh Todd, Minister of Natural Resources Vickram Bharrat and Foreign Secretary Robert Persaud were also at the event.