Minister warns about idle forest concessions

-letter on restriction of timber exports cleared up

Forest concessions that are under- or unutilized may be reallocated to facilitate increased log production, Minister of Agriculture Robert Persaud told sector representatives yesterday.

Persaud met with members of the Forest Products Association (FPA) and other private sector representatives after they expressed alarm at a Guyana Forestry Commission (GFC) letter which informed that there would be a restriction of lumber exports from September 1. The government has said that based on its obligation to ensure that the domestic needs of local consumers are first satisfied before allowing the exportation of logs and lumber, it has asked the GFC to explore possible arrangements to satisfy local demand. There is a limited supply available on the local market.

“We’re happy to report basically that the minister has said this letter is just an indication of the concern that government had with the industry especially suppliers on the local building industry,” said Khalawan, a senior vice-president of the FPA. “Having met with him we have agreed that that restriction will not apply for the export of lumber, logs and other forest produce,” he told a media briefing. They have also agreed to stick to the current log export policy where concessionaires will only be allowed to export logs that originate from their concession, Khalawan added. The current policy is being reviewed and a new one will come into effect from next year.

The FPA VP said that they pointed out to Persaud that there are lots of persons sitting on concessions that are not productive. “The minister agreed he will look with the GFC to reallocate concessions that are not being fully utilized,” he said. According to Khalawan the letter that exporters received from the GFC was “very frightening” as it would have impacted their businesses greatly.  Coming out of the meeting, the ministry and the private sector representatives have also agreed to meet weekly to engage on issues. A joint sensitization workshop which will focus on current local timber demand as well as the specification and the species usability that the local industry needs, is also planned.

   Opportunity

Chairman of the Forestry and Wood Products subsector of the Guyana Manufacturing and Services Association (GMSA), Andrew Mendes said that what came out of yesterday’s meeting “turned what could have been a problem really into an opportunity to improve the situation.

“For Guyana to derive more benefit from its forest resources we need to have more in-country processing,” he explained. “The problem has been a restriction in raw material for that on the local market a position that the GMSA has been pushing for the last 10 years,” he said. “Clearly given the striking figures that were given to us today (yesterday), where in 2010, 37.5% of log production was exported, in 2011 that figure has now risen to 56%, so the whole idea of having more in-country processing in line with our stated forest policy and stated national forest plan, the actual opposite is happening so obviously something needs to be done,” he added.

     Standards

Executive Director of the Private Sector Commission (PSC), Roubinder Rambarran said that the meeting also outlined investment opportunities within the forest sector. He hailed the moves to bring standards to the industry as well as moves to determine the local demand for wood. This needs to be known so in a future log export policy, the percentages of what can be exported and what will remain, can be included. Rambarran said that the local demand for wood in Guyana has not been quantified but this is being worked on.

Meantime, Mendes said the sector has the capacity to saw almost double the amount of the total log production for 2010. He said that if unutilized forest concessions are opened, they have the capacity to increase above the existing levels of production. In addition, another mechanism by which the availability of lumber locally can be increased is by improving efficiency and recovery rates in wood processing. They are working with the GFC to develop a code of practice for this, Mendes said.

But Khalawan noted that in terms of value-added, over the last decade, the kind of investment into downstream processing has not been seen and Guyana is nowhere near what the market is really calling for.

He said that Guyana cannot supply the very large volumes that the market requires so only niche markets are being targeted. The limits to what can be supplied also shape investment to meet those markets, he said.

It is time to re-examine the industry, Khalawan said pointing out that the market has been changing and production capacity and technology need to be changed to meet those markets. “Over the past 20, 30 years that investment hasn’t been coming fully on board and that’s probably the reason why many of the producers would have targeted easier markets of selling logs,” he said.

Mendes noted that the GMSA since 2000 has been complaining of the shortage of quality sawn lumber for the local market for either construction or value added. “Nobody is gonna invest in a furniture factory or other facilities if they can’t get the raw material to be able to facilitate that investment. It’s not about the equipment, it’s about the raw material availability,” he said.

He disclosed that sawmillers themselves have now applied for timber concessions to get access to the resource to just maintain the production they have presently. “Now we have to understand that’s money that has gone backwards into primary log extraction that could’ve been invested in more processing and/or value added,” Mendes said.