Despite failing to meet yet another deadline to begin processing logs here, Asian logging company Baishanlin will be allowed to continue exporting logs even as it has requested two more years to acquire wood-processing equipment.
“Whilst in its re-structuring phase the company no doubt will still be carrying out some operations and it is expected that some logs will be shipped,” Minister of Governance with responsibility for the natural resources sector Raphael Trotman told Stabroek News yesterday.
Last week, Trotman told reporters that restructuring and lack of financing are hampering Baishanlin in meeting Govern-ment’s year-end edict to begin substantial value-added production or face the revocation of its contract. The Government Infor-mation Agency had reported that Trotman at a post-Cabinet briefing at the Ministry of the Presidency said that when he last spoke with the company three weeks ago, he was informed that they were in no position to have the mills that are expected within the next 10 months, and have instead asked for two years to acquire them.
“We have had discussions with them about an alternative mill or wood mill that would be available here in the region, but that is ongoing,” Trotman said. He said that much depends on Baishanlin securing new financing. He said that while this is on-going, the company’s restructuring, engagement between the government and the wood company is “on pause.”
“I am led to believe that the company is in the process of restructuring and when this is over, under the guidance of the Chinese government or state, then it will reengage with government,” he said, according to GINA.
Asked yesterday by Stabroek News whether the Chinese company will be allowed to export logs as normal, Trotman said that in its re-structuring phase it is expected that some logs will be shipped.
“In this sense I would not qualify operations as “normal” as already some temporary restrictions were placed on locust logs and there has been a reduced activity overall. We are also aware that some overseas orders may have to be fulfilled. Government has been advised that a Chinese state entity now holds the majority shares of the company and that every effort is being made to finalise the restructuring and refinancing,” he said.
The APNU+AFC government had vowed to ensure that the company fulfill its commitments. While in opposition, the two groups had also expressed concerns about Baishanlin’s operations.
In July, Trotman had said that should Baishanlin and Indian logging company Vaitarna Holdings Private Inc (VHPI) not produce value-added products by the end of the year their contracts could be terminated. “Both have been spoken to already. Both have given a commitment that within a matter of months they will be addressing the value-added concern… We are in July and I expect before the end of the year the nation will start to see value-added products being produced by those two companies,” he had said at a post-cabinet media briefing.
He added that should this not happen, “Well then their contracts will have to be reviewed for termination.”
Earlier, Trotman had taken a stronger line on the company. He had said that government will be pushing for logging and other companies operating here to do value-added processing locally and companies that do not fulfill their commitments would have to shape up or ship out.
“We just can’t allow companies to continue coming here, taking our raw materials… without any value-added being done, taking them out and then sending the product back to us. We’ll remain for all time… drawers of water and hewers of wood. We got to advance beyond that and I think this government would be pushing for companies to have a strong sense of corporate social responsibility, to be able to develop our resources, to transfer technologies, in terms of training and to be leaving a positive mark,” he had told Stabroek News in an interview.
He emphasised that government will push for more in-country processing. “We all know that we can do value-added in Guyana and our forest producers themselves have to get away from just doing logs and basic planks,” the minister said, while adding that he did not think that they were encouraged in the past to do so as much as they should have been.
Though Baishanlin has been here since 2007 and benefited from tax concessions, there is no sign of any progress towards value-added processing. In April, after numerous reports in the media about its failure to live up to its commitments, Baishanlin said that it has suffered “major setbacks” in completing its long promised wood processing facility and it said that this was due to the lack of adequate funding from its financiers, which it blamed on the “hostile environment” caused by the media.
However, the company has been building ships at its Moblissa site and exporting large quantities of logs. It is also involved in real estate and mining, among other ventures.
Meantime, Stabroek News reported in September that five years after beginning operations here, Vaitarna has finally begun processing of logs albeit on a small scale even as it continues to export them.