Logging company Vaitarna Holdings Private Inc (VHPI) says it expects to begin value-added production after equipment for its plant is installed in the first quarter of this year.
“The structure for the first phase of (the) saw mill project is complete and electrical works are scheduled to begin within a month’s time,” Chief Executive Officer (CEO) Chethan Narayan said in a response to an article published in the Stabroek News on Tuesday. He said that the machines for the first phase of project have already arrived in Georgetown and will be moved to the Wineperu site on the Essequibo River for installation during the first quarter of this year. “After installation, a trial run will be held to iron out any issues after which active added value production will commence,” Narayan.
Stabroek News reported on Tuesday that Vaitarna is yet to begin operations at a long-delayed wood processing facility and company officials are tight-lipped on its status, though one official said that they would start operations within two weeks. Narayan refused to speak on the matter during a visit by Stabroek News to the Indian company’s Wineperu concession on the Essequibo River last Thursday. He demanded that no pictures be taken and said that visits to the facility site were prohibited.
During a visit to the concession in August, Stabroek News had observed that the company had cleared land to set up the facility but no construction had begun. It was observed that grading and filling was also done but was incomplete. No work was being done and there was no machinery at the site. This was despite Minister of Natural Re-sources Robert Persaud saying in January last year that Vaitarna was in an “advanced” stage of setting up the promised wood processing facility.
Subsequently, the company in response to the Stabroek News report, said that it “tentatively” expected that the saw mill will be “near completion” by the end of last year.
In his response yesterday, Narayan characterized the Stabroek News article as “misleading” but did not identify nor rebut any section of the article which was “misleading.” He further stated that the article had said that Vaitarna was making no effort to establish processing facilities in accordance with its agreement with the government and that it was only engaged in the export of logs. The article did not make these statements.
Shed
A photo provided by the company of what is supposed to be the structure of the saw mill showed only a part of what appeared to be a shed. In the background was the land cleared by the company and which a company official had told Stabroek News last year was the proposed site of the wood-processing facility. It did not appear as though any work was done on that site since the August visit by Stabroek News. Stabroek News was denied access to the site during the visit last week.
Narayan, in his response, said that the company will sell lumber to both local and export markets depending on demand prices. According to the company official, two sawing machines from Woodmizer and a resaw machine to further scale up added value production are expected to reach Guyana in the third quarter of 2015 and are expected to be operational by late 2015 or early 2016.
He disclosed that last year, a total of 11,464 cubic metres of logs were sold and out of this figure, local sales were 5,705.26 cubic metres while exports were 5,758.7 cubic metres.
Exports of logs rather than processing the timber locally has long been a concern since numerous promises have been made by the government and foreign investors about value-added operations. The promise of value-added has been seen as sugar coating to enable the export of large quantities of logs, particularly to China and India, even though there is little job creation here or value enhancement. Foreign companies including Vaitarna and China’s Baishanlin have been exporting logs on a large scale even though Persaud and other officials have said that logging companies are encouraged to process wood here.
Vaitarna had acquired its concessions in 2010. According to Narayan, the company currently has 106 employees working and more than 90% are Guyanese.
The Vaitarna deal had not been known locally until an article surfaced in the Times of India in 2011. Subsequently, at a press conference in April 2011, Persaud said that there would be no large scale exportation of logs since Vaitarna has committed to getting involved in downstream activities. VHPI is not here as a logging company but will be involved in value-added, the minister had emphasized. Nearly four years after it is still to begin this value-added processing.
In 2012, V G Siddhartha, owner of the Coffee Day group which owns VHPI said that a processing centre for logs would be set up here but the main facility would be in India.
VHPI is a subsidiary of the India-based Coffee Day Group. Coffee Day, through its Dark Forest subsidiary, in 2010 it acquired the State Forest Exploratory Permit for 391,853 hectares of forest originally awarded in 2007 to US-based Simon and Shock International Logging Incorporated (SSILI), after buying out SSILI. The company has since been granted a Timber Sales Agreement for this concession and can now harvest logs.
After the acquisition, the company registered in Guyana as SSILI. Subsequently, Dark Forest acquired the 345,961 hectares concession which was originally assigned to Caribbean Resources Limited (CRL). The government accepted an offer of $600M for the TSA. The company registered as VHPI and had been harvesting and exporting logs from this concession.
The total area held by Coffee Day is 737,814 hectares of forest.
