Key players want more markets opened up

Decline in forestry production

By Samuel Sukhnandan

The local forestry sector has experienced some level of decline in production over the past few years, with production on track to be the lowest this year.
This is the result of many factors, including the non-renewal of Barama’s forest concessions and the repossession of BaiShanLin’s concessions.
However, local players in the industry believe that the fortunes of the sector could turn around with the opening up of new markets not only in the Far East, but in countries across Europe.
Head of the Guyana Forest Producers Association (FPA), Ricky Ramsaroop said if Guyana managed to get on to the European Union Forest Law Enforcement Governance and Trade (EU/FLEGT) initiative, this could assist with boosting production in the local forestry sector.
Ramsaroop said it would result in Guyana having access to more lucrative markets in the EU for its timber products. It would also see improved governance at all levels, more revenues, capacity building, international recognition and reform policies and laws.
While Guyana had committed to signing the Voluntary Partnership Agreement (VPA) with the EU/FLEGT by the end of 2016, that deadline was pushed back to the end of 2017. This is the second time the timeline for signing the agreement has been pushed back.

Better marketing
However, besides this, Ramsaroop said in order for Guyana to see tangible improvements, it needed to improve its marketing in other countries and change the current procurement system.
In other words, builders should use only lumber that was recommended by the architect. This rule obtains in many developed countries, including the United States, where a designer recommends a specific lumber for construction use only.
He used the example of contracts being given to builders in Guyana who were then tasked with sourcing the lumber. This often results in them looking for the cheapest lumber to undertake the project. He used the D’Urban Park Project which cost Government millions of dollars, as an example.
“That is one of the ways of also improving equal utilisation of local lumber. Most contractors are going after greenheart which is causing low production,” Ramsaroop stressed.
Meanwhile, businessman and former Guyana Manufacturing and Services Association (GMSA) President Kim Kissoon told <<<Guyana Times>>> that while the reduced operations of both Barama and BaiShanLin had indeed contributed to the decline in production, especially since they both were selling timber products to markets in the Far East, what Barama would have produced would not have necessarily translated into more sales.
“People won’t cut logs (remember it’s a perishable commodity)…they won’t unless there is already a market for it,” he said.
Kissoon claimed the overall decline did not happen overnight. In fact, he is convinced that it started in late 2014 and early 2015, but peaked in 2014 and then the sector started recording a decline. “At the same time, two of the logs that would have commanded a price in the Far East were wamara and purpleheart especially in the case of wamara, where there is an African equivalent.”
The former GMSA head said that African countries have been exploring their forests and one would expect that competition would be greater especially since Africa was closer to the Far East. “So, the transportation cost comes into effect and that would affect the price,” he explained.
In expressing total agreement with the Government’s current policy on the forestry sector, Kissoon said that work started with the previous Administration, noting that things were headed in the right direction.
“The direction this country is moving is correct. It’s not going to happen overnight unfortunately; if we stay the path, we will get there in the end,” he added.
He said through FLEGT, Guyana would be allowed to sell not only logs but semi-finished timber products in Europe and, once accepted, the market for timber products would grow.
“The demand will grow and production will grow. That is not going to happen overnight. That will probably take between two to three years. But once you get it up there, it will stay because tropical woods are always in demand,” he stressed.

Underutilisation
While the forestry sector has been on a decline, Kissoon told Guyana Times that the 1.2 million cubic metres that has been allotted to persons within the sector has been underutilised for many years.
As such, production in the forestry sector has remained around 40-45 per cent – some 400,000-450,000 cubic metres lumber, with 10,000 to 15,000 people directly involved in the sector.
Kissoon said based on recent discussions, he was convinced that Europe would be more interested in purchasing more of the semi-finished products and this could mean that Guyana would get better value for money, as rough sawn timber would give up to 300 per cent more than if Guyana were to sell logs.
However, he noted if Guyana was to move in that direction, we would need to take into account the fact that we would need a professionally trained workforce. In addition, there will be high demand for more state-of-the-art equipment.
Forestry production for February 2017 amounted to 21,900 cubic metres compared with 25,319 cubic metres in February 2016. This resulted in production reaching 37,074 cubic metres, year-to-date, compared to 51,052 cubic metres in 2016.