Dear Editor,
We refer to your articles and letters published in Stabroek News and Kaieteur News on October 18 and 19. We thank the editor and readers for their comments, and appreciate their feedback. We would like to take this opportunity to clarify some of the issues raised, while drawing your attention to salient points relating to our present situation.
We recognise that the issue of safety and safeguards are major causes for concern. As such, we wish to establish the fact that the boiler system at Barama’s plywood plant was installed and operated in accordance with the manufacturer’s specifications. More importantly, all key operators and maintenance personnel responsible for the boiler system have been adequately trained and have several years of experience operating it.
The boiler system at this plant had met the mandatory statutory and insurance requirements ever since we began operations. Every year, it is subject to an independent examination and certification audit by an independent certifier. Their primary focus is the efficiency of the safety system and performance of the boiler system. Barama has been complying with these requirements and these audit reports have been submitted and verified by the Ministry of Labour.
The primary cause of the boiler damage was careless employees who did not ensure that the boiler was fed with the required water supply and therefore led to the overheating of the boiler. The system’s safety alarm was activated, triggering an emergency shutdown of the boiler system. This timely intervention prevented a catastrophe that could have compromised the safety of our employees. Unfortunately, the damage to the boiler system was already done by this time. According to the manufacturer, it will take a minimum of one year to restore the boiler system based on the damage.
The boiler system is at the heart of our operations. The breakdown of this system means we have had to close down our plant and lay off 274 employees. This is Barama’s only plywood operation in the country. We deeply regret the impact of this action on our employees – the loss of employment is painful, and to make it more bearable, Barama has arranged for compensation that exceeds the legal requirement.
Our employment policy is to source, employ, train and retain locally available skills and labour before considering any other foreign sources. This is clearly evident in our employment records, which show that 100% of the plywood workforce consists of Guyanese.
To date, the financial implications for Barama to restore the boiler system are still being assessed but are expected to cost millions of US dollars.
This includes the loss of markets and re-positioning of our business outlook in the interim. More importantly, the immediate impacts on Guyana are extensive and involve direct and indirect job losses, loss of revenue earnings, shortage of local plywood supply, loss of business opportunities for local suppliers and service providers, inter alia.
Given these serious concerns, the Ministry of Agriculture, in collaboration with Barama, is currently reviewing a preliminary impact assessment to determine the appropriate course of action to cushion and regularise the situation at hand.
Costs notwithstanding, Barama continues to remain committed to its forestry operations in Guyana. We are a long-term player, with operations dating back to 1992 in Guyana.
With regard to our plant’s production capacity, we wish to clarify a few points. As most downstream operators are aware, the dynamics and challenges of upstream log supplies have a direct impact on the productive capacity of downstream activities. In fact, it is even more challenging for plywood production given the unique requirement and limited time span needed to deliver freshly harvested (without insect infestation) plywood logs to produce the desired marketable plywood sheets. This is unlike most other downstream activities such as furniture manufacturing where more naturally durable species are used and therefore have greater tolerance for longer delivery time.
Consequently, it is important to highlight that log supplies are affected by increasing transport distances, difficult terrain, adverse weather patterns, variable species composition and abundance, natural defects of species, natural durability of species, poor soil types, shortage of skilled labour force, tightly regulated industry and high capital intensity, inter alia. The global economic crisis over the last two years has also affected plywood demand from our key export markets. Overall, these challenges have had a subsiding effect on the productive capacity of the plywood factory.
It is in recognition of these limiting factors that Barama has recently implemented a Plywood Revitalisation Programme (commonly known as the Sunrise Project) to improve the efficiency and productivity of the factory in order to maximise the use of our logs for plywood. This programme included sourcing log supplies from all suitable forest concessions in Guyana to complement our available supply. However, the programme was prematurely disrupted by the unfortunate boiler incident.
We anxiously await the restoration of the factory in order to resume this programme for its intended objectives. We firmly believe, based on the short-lived positive results experienced before this incident, this programme has shown the capabilities of the Guyanese workforce.
At this juncture, we wish to state that Barama is fully committed to restoring the boiler system in the most cost effective and timely manner. This would mean producing plywood once again, providing employment, restoring the general economic benefits/revenue earnings to the company and country as a whole.
In closing, we would like to assure all stakeholders that as a socially responsible company we remain open and committed to addressing the various issues of concern. We thank our stakeholders for their support and understanding in ensuring the earliest regularisation of this situation.
Yours faithfully,
Mohindra Chand
Head of Corporate Affairs & Forest
Planning
Barama Company Limited
