V G Siddhartha, owner of the Coffee Day group which controls 1.82 million acres of forest in Guyana through one of its subsidiaries has said that a processing centre for logs will be set up here but the main facility will be in India.
He did not say definitively when the processing centre will be set up here only telling the Indian newspaper, Business Standard, that it will be done “in a period of time.” Coffee Day set up its subsidiary here in 2010 with the promise of a processing plant. Currently, the company is working to set up a processing plant in Chikmagalur, India but is facing land issues. There is no indication that it is currently actively pursuing a processing plant here. Commissioner of Forests James Singh could not be reached for comment yesterday while Minister of Natural Resources and the Environment Robert Persaud is out of the country. The export of unprocessed logs has long been a concern of activists.
Siddhartha told the Business Standard that no law of the land had been breached. “On projects such as the one we are into, there is always bound to be some opposition from various stake holders. We got the lease for this land from a US company which was going bankrupt. We have been working on this project for around 18 months and we have around 100 employees. We will set up a processing centre in a period of time there, but the main centre will be in Chikmagalur,” he said, according to a report on the newspaper’s website. The company’s subsidiary here is Vaitarna Holdings Private Inc (VHPI).
He told the Business Standard that they have exported a small portion of timber to China. On the plan for putting up a processing factory in Chikmagalur for the timber, he said, “Yes, there is some delay and land is an issue, which we are solving.” According to the report, Siddhartha further explained that projects such as this one are tightly monitored under global regulations. “One such rule is a specific limitation on how many trees we can cut per acre and we just cannot violate those norms,” he added.
The Business Standard reported that nearly two years after the ambitious foray by Siddhartha to build a global-scale furniture business, there is growing rumbling over the way he has been handling the logging in the pristine rainforest in Guyana. Siddhartha, through one of his group companies, had acquired a 30-year lease for 1.82 million acres of forest. The intention was to take timber and ship it all the way to the small coffee-growing town of Chikmagalur in Karnataka’s Western Ghats, the place where Siddhartha grew up and has close to 11,000 acres of coffee estates. The plan was to process this timber into ready-to-fix furniture.
The report noted that however, nearly 18 months after, noted experts and some established non-government organisations in Guyana have expressed serious doubt on how this activity is being done. A key aspect these experts are stating is that there has been no value addition in Guyana to the timber before being shipped out, which is required.
Janette Bulkan, who has done much research on forestry here, has written a series of articles in this newspaper on the various alleged transgression by Siddhartha’s companies. The Alliance For Change (AFC) has also raised doubts over how the lease had been given to Siddhartha and how the process had not been transparent. The article noted that Siddhartha has floated a company, Dark Forest Furniture Company, to retail the furniture in India and has also tied up with Future Group for this.
Stabroek News had reported earlier this month that VHPI is yet to establish the wood processing facility it had committed to. The India-based company has exported unprocessed logs and seems likely to continue for the foreseeable future since it is some way away from establishing a plant for downstream processing, Stabroek News was told. Persaud last year, when he was the junior minister for forests, had said that there would be no large scale export of logs by Vaitarna.
VHPI in 2010 acquired the State Forest Exploratory Permit (SFEP) for 391,853 hectares of forest originally awarded in 2007 to US-based Simon and Shock International Logging Inc (SSI), after signing a Memorandum of Understanding with the Government of Guyana and with the original owners of SSI for a total buy-out in which 100% of the shares were transferred to a new subsidiary, Dark Forest Company (S) Pte Ltd. (DFCPL).
Subsequently, the company acquired the 345,961 hectares concession which was originally awarded to Caribbean Resources Limited (CRL). The government accepted an offer of $600 million by VHPI for the Timber Sales Agreement (TSA) which had been terminated and re-possessed by the government in 2010 from CRL, because of continuous non-compliance with the terms and conditions of the TSA. The total area now held by VHPI is 737,814 hectares of forest, around 1.822 million acres.
The company has been exporting logs from the former CRL concession since it has to convert the SFEP to a TSA before it can export logs from the former SSI concession. The export of 50 containers of logs was under the spotlight recently.
In a series of articles in Stabroek News, Bulkan said that Guyana has lost through allowing VHPI the export 50 containers of unprocessed logs of the best timbers, contrary to national policies which have been discussed and endorsed by the National Assembly.
