Barama commits to restarting plywood operations by June

Barama Company Limited yesterday disclosed that it would restart plywood production in June 2011 to meet local demand, a week after President Bharrat Jagdeo threatened to pull the concessions the company currently enjoys.

Barama representatives, including CEO Clement Ooi, yesterday met Minister of Agriculture Robert Persaud to discuss the company’s status following the closure of its Land of Canaan operations and the laying off of 274 workers and the parties spoke briefly to reporters.

“We are very confident that by June 2011 we will put our operation in place and we will install a smaller boiler and we can start operation to cater for the local plywood market,” Ooi said in a brief statement to the media.

He said Barama will be exploring other options so that “maybe by December 2011” it could restart normal production. The company will also be looking to import plywood to meet its shortfall and this will be discussed with the government, Ooi revealed.

President Bharrat Jagdeo last week threatened to withdraw the concessions granted the company if it was its intention not to restart plywood production locally. The workers were made redundant following damage to a boiler at the company’s East Bank Demerara location in early October and the company had said that it would take a year to rectify.

At a meeting with the workers last week, the President said Barama had subsequently said that it would take 20 months to restart operations.
“…We have a sneaking suspicion that there’s no sense of urgency to resume operations. But let me make it clear, let me make it extremely clear, that if Barama thinks that they will just be cutting wood in Guyana and exporting that wood and not resume the plywood operations they have another think coming,” he declared.

He noted that the company had enjoyed “tremendous concessions” here including duty-free concessions and tax holidays because Guyana needed the jobs.

“If there is not this large-scale employment, I don’t see any justification for continuing any of those preferences,” the President had stated.
Persaud yesterday said a decision on the concessions would follow depending on what comes out of the talks with the company which he said would be an ongoing process.

“These concessions were based on the plywood operations as well as the veneer operations so we have to study the information and the commitments given by the company which will have to be verified and certainly that will advise the position of the president,” Persaud stated.
He added that the GFC will continue to monitor Barama’s operations and the expectation is that the company will resume plywood production within a “practical timeframe” once it is able to fix or replace its boiler.

The President had announced last week that the import duty on plywood had been removed because of a shortage and some dealers looking to profit from the situation.

“You have some unscrupulous people who have moved the price from $4,500 per sheet now to $9,500. So we’ll have to import and I’ve said to my Cabinet we’ll remove the taxes for the period whilst we’re not producing, when we start producing we’ll put back the taxes on imported plywood so that local plywood will have a preference.”

The President suggested that Minister of Trade Manniram Prashad examine the matter through the Competitions Commission.

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