Guyana records reduction in log exports as local demand rises, value-added production grows

Despite growing production in the forestry sector, there has been a reduction in the export of raw materials such as logs and according to the Guyana Forestry Commission (GFC) under the Natural Resources Ministry, this is due to the increase in local demands and more value-added products being produced here.
Over the last four years, Guyana’s forestry sector has rebounded from an almost bankrupt state back in 2020 when the current People’s Progressive Party/Civic (PPP/C) Government took office. Now, however, production has increased by 20 per cent at the end of 2023 and is expected to further grow this year.
However, Commissioner of the Forestry Commission, Edward Goberdhan, says that even though production is up, exports of logs have gone down.
“We have seen considerable decline in the exportation of primary products such as logs and [are now] more into value-added for use domestically and to be exported. Over the last four years, we have seen significant investments in value-added facilities and some high-value products being produced like kiln dry lumber, pre-fab housing, flooring and decking. These are all available on the local market and being exported,” Goberdhan stated on Wednesday at the ministry’s mid-year press conference.
Meanwhile, Natural Resources Minister Vickram Bharrat added that this increase in local demand as well as in value-added production is a “good sign” for the forestry sector, which he noted is already poised to not only meet its 2024 target but also surpass the 450,000 cubic meters produced last year.
“It simply means more of our products are being sold on the local market mainly because of the great demand created by the housing sector, the oil and gas sector and all the developments that are taking place throughout our country. So, it means more demands locally and that is good for the sector and our local economy,” he stated.
According to Bharrat, government anticipates that more value-added products will come on the market with the massive investments being made by local operators.
“What we’ve seen over the last few years is over 100 new sawmills in our country and over 50 new lumber yards establishing throughout our country… Linden had five sawmills in 2020; today, we have about 19 sawmills in Linden operating at present.
So, we’ve seen more and more people coming into the sector but not only coming into the sector but venturing into value-added, downstream activities. And we will see much more of that when the Gas-to-Energy (GtE) project comes online,” Bharrat posited.
The government’s model GtE project, which includes a 300-megawatt power plant, is expected to slash electricity costs in half and provide more stable power when it comes on stream in the first half of next year.
The natural resources minister explained that one of the major hindrances to manufacturers in Guyana currently, is the high cost of electricity and unreliable power supply.
“So, once we have the Gas-to-Energy project on stream, it simply means that more of our stakeholders would move to value-added and reduce the exportation of round wood or logs,” he stated.
In fact, Bharrat disclosed that these efforts are already being undertaken by some local operations. For example, he pointed to Parika Sawmills Ltd, which is expanding its operations with a new massive complex that will produce finished doors, cupboards, and windows.
Another sawmill in Parika, East Bank Essequibo (EBE), is also establishing a factory for the production of roof shingles.
According to the Natural Resources Ministers, these businesses have expanded their operations with assistance from the $900 million Revolving Fund that was set up by the government in collaboration with Demerara Bank Limited to help the forestry sector recover.
Grossly mismanaged
Meanwhile, as part of efforts to make the forestry sector more viable, steps are also being taken to increase the recovery rate of each log. When the PPP/C assumed office in 2020, the recovery rate of logs was about 40 per cent maximum.
Today, however, many of the sawmillers have retooled and recapitalised their operations. This has resulted in a few of the larger operators recovering between 70 to 75 per cent of each log.
“That is a significant stride and achievement. And, we’re working with the others so that their recovery rate can increase too so there is less wastage,” Minister Bharrat stressed.
When the People’s Progressive Party/Civic (PPP/C) Administration took office in August 2020, it inherited a “grossly mismanaged” forestry sector that was on the “verge of collapse.” However, through various interventions and initiatives implemented by the Government, this industry has made a turnaround.
In 2020 alone, the Ali-led Administration injected $350 million into the then cash-strapped Guyana Forestry Commission to cover operational costs and wages for staff for the remainder of the year.
Strategies aimed at boosting the financial performance and management capabilities of the GFC were undertaken and in 2021, the forestry sector was able to make a positive turnover and manage on its own.
Back in June, the Natural Resources Ministry reported that Guyana produced approximately 446,000 cubic metres of timber products in 2023, earning US$20.5 million from exports.
This year, timber exports are expected to increase to US$31.4 million, reflecting a growth of US$10.9 million or approximately 53 per cent.
More importantly, in 2023, Guyana’s forestry sector generated a gross domestic product of approximately US$86.32 million. With an expected growth of 3.9 per cent in 2024, the sector’s GDP is projected to increase to around US$89.68 million. (G8)