There is a distinct air of worry about the demeanour of some of the leading players in the country’s forestry sector. Domestic and international conservation lobbyists, the heightened sensitivity of the global timber market and mounting operating costs resulting chiefly though not exclusively from rising fuel costs have combined to threaten the industry’s viability. Increasingly too, and under pressure from global conservationists, government’s posture on the felling and export of selected, dwindling species has become more stringent, adding to the woes of an industry which the Forest Producers Association (FPA) says is already under siege.
David Persaud, Vice Chairman of the Toolsie Persaud Group of Companies and President of the FPA is under no illusions about the gravity of the problem. The local forestry sector, he says, “is probably on the verge of bankruptcy.”
That may, perhaps, be an overstatement of the case but there is no mistaking the fact that local forest producers are facing mounting difficulties. To make the point Persaud lists more than half a dozen local timber operations including Willems Timber, Nagassar Sawh, CRL and Guyana Sawmills that have “gone under” in recent years. The others, he says, are persevering rather than thriving.
Between January and October last year the production of logs declined to 630,688.97 cubic metres from 636,778,22 cubic metres during the same period in 2005. And while exports as a percentage of production increased from 34.59 per cent in 2005 to 44.03 per cent last year the FPA points to the decrease in production as indicative of a continuing decline in the state of health of the industry. The export volume of sawn timber also slipped from 82,561.82 cubic metres between January and October 2005 to 71,169.10 cubic metres last year.
S K Chan, the Malaysian-born Chief Executive Officer of Demerara Timbers Ltd shares the GFPA President’s view that local operators in the forestry sector may be heading towards further marginalization unless government intervenes to stop the slide. Chan, a one-time Chief Executive of Barama says that the potential contribution of the local forestry sector to the country’s economy coupled with the fact that it provides direct employment for more than 30,000 people is hardly matched by commensurate official attention to the sector.
High on the list of the FPA’s concerns is what its members contend is a discriminatory official climate that favors foreign investors in the sector. The Association believes that the key to the resurgence of local forestry products operators lies in their being allowed the concessions – like duty-free importation of equipment – afforded foreign investors. “What we need,” Persaud says, “is a level playing field.”
Chan goes further. He believes that a point has now been reached where a moratorium ought to be placed on foreign investors in the forestry sector in order to allow for greater attention to restoring the fortunes of local operators. The Malaysian forestry expert believes that time and circumstances have caught up with the local forestry sector. He estimates that as much as 80 per cent of the capital machinery currently in use in the industry has been overtaken by new technology. With almost 60 per cent of the local milling operations having gone out of production Chan says that the local forestry sector has not been able to afford to stay abreast of the technological advancements in the global industry. How to replace inefficient and near obsolete machinery with expensive new equipment is a question to which even the larger producers have no answer.
The FPA has contemplated the problems of the forestry sector in virtual silence for some time. The Association has become
weakened by a “drifting away” of members driven by an individual determination to survive rather than any collective will to succeed. Its Plan of Action for 2007 includes a membership drive aimed at swelling its ranks and, hopefully, enhancing the effectiveness of its lobby.
Among the goals outlined in its Plan are the creation of a voluntary levy on production to support the work of the Association and the commissioning of a study on the problems of the industry. The FPA will also be seeking to develop closer links with the Guyana Forestry Commission (GFC) and to secure grant aid from external sources like CARICOM and the European Union.
Managing Director of A. Mazaharally & Sons Ltd. Yacoob Ally believes that while focusing on initiatives that can enhance the effectiveness of the association is useful the key to the Association’s role in aiding the recovery of the sector lies in its ability to transform itself into an effective lobbying force. While some of the Association’s members are cautious about public pronouncements Mazaharally advocates a more robust public profile which, he says, could help the industry secure the public and official attention that could be critical to the restoration of its fortunes. He believes that recent critical comments on the environmental practices in the forestry sector warrant positive responses from the FPA which illustrate that the major players in the industry are responsive to the importance of sound environmental practices. “We need to develop mechanisms to ensure that the concerns of the Association and its members are publicly debated and that the resolution of those concerns become an issue for discussion at the appropriate levels,” Mazaharally said.
Chan says that local forest producers have come a long way in the development of responsible timber harvesting. He believes
that the major players in the industry are well within the environmentally allowable limit for timber harvesting and that issues of environmental recklessness do not arise in Guyana with anywhere near the magnitude that it does in other timber-produving countries.
