Gov’t still concerned at plywood price – Persaud

Barama opens outlet at Land of Canaan

Agriculture Minister Robert Persaud says the government  remains concerned about the high prices that local home-builders are being charged for plywood by Barama Company Ltd (BCL) and he warned the company that the extended deadline for a veneer plant must be met.

Speaking at the opening of the Barama Plywood Depot at Land of Canaan yesterday, Persaud said that President Bharrat Jagdeo had previously expressed his concern about the high cost of plywood locally and explained that discussions were held with BCL on it. He said that during these discussions, BCL was urged to find ways of ensuring that local consumers were charged a fair price and that they did not pay above the export price for plywood, a release from GINA said.

According to the Minister, domestic consumption for plywood to date varies between 678 m3 to 1,000m3 a month. At present, plywood from Barama starts at about US$450/m3, a statistic which the Minister described as “worrying”. Last year domestic prices skyrocketed to an amount as high as US$583/m3.

Persaud pointed out that while the company had argued that it was the distributors who were doing the mark up, this was not entirely true since the company’s local prices were more than 10 percent higher than the company’s export price.  Persaud explained that Barama had said that this was necessary to ensure that the distributors do not undercut their export market by buying from them at low prices and exporting at higher prices. However, the Minister said that BCL now contends that with the opening of the plywood depot, prices on the local market will be comparable or below the export prices as there will be no intermediary

Meanwhile, over the last six months, the BCL has represented its inability to obtain premium prices (US $424/m3) on the world market. According to Persaud, plywood from Ghana ranges from US$422-728/m3, Malaysia US$394-$480/m3 and Brazil US$469-512/m3.

Improvements
in the sector

Persaud stated that the total production level for logs, lumber and roundwood production for January and February of this year was approximately 44,450 m3 for all producers.  This is an improvement on the production level for the comparable period last year, which was 33,088 m3.

To date, the Barama Company has produced 8,000m3 for logs and lumber.  This figure is a marked improvement from the same period last year, when production was under 1,000 m3. According to Persaud, Barama is expected to increase its production for this year as they have already approved blocks to commence harvesting.

While there are currently less than 400 employees at the plywood mill, Persaud said that he hoped that this improves considerably over the next 12 years, as the company looks to increase its production.

The Minister also urged the company to fulfill its promise to complete the Veneer Plant at Buck Hall, on the Essequibo Coast, in spite of the current global economic environment. According to the Minister, the company had said that the plant will be completed by September 2009. A complex which includes a saw mill and a veneer plant will be constructed on 500 acres of land at Buck Hall. The project will also entail the construction of three wharves, a marine slipway and repairs area, log storage facilities, a workshop, water treatment plants, housing for the workers and a guest house.

He stated that he had recently written to the company and had indicated that “no further deviation from the newly submitted schedule of activities will be entertained.”

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