– will it be enough for govt?
Five years after beginning operations here, Indian logging company Vaitarna Holdings Private Inc (VHPI) has finally begun processing of logs albeit on a small scale even as it continues to export them.
Company officials have been tight-lipped on the long-delayed wood processing facility but during a visit to the company’s Wineperu, Essequibo River location on Thurs-day, Stabroek News was able to observe that a sawing machine as well as another piece of equipment to shape the lumber had been installed. This newspaper was told that the equipment was set up earlier this year and began operating in May.
At the time of Stabroek News’ visit, operators were at work sawing logs. A pile of processed lumber was stored under another shed. Stabroek News was told that about 117 cubic metres of processed lumber was produced since operations began in May. However, the recovery rate is low. Some of the lumber has been sold on the local market while some has been exported.
In the meantime, the company also continues to export logs. Piles of logs were seen on the waterfront waiting to be loaded. Barges normally transport the wood for loading onto ships in Georgetown but none was there at the time. Company officials were tight-lipped on the amount of logs being exported. However, one resident noted that the company was harvesting faster than she had seen other companies do and now the trucks have to go some distance into the jungle to gather the cut logs for transport to the waterfront. The company is also building new lodgings for employees.
Stabroek News was told by a company official that there are plans to expand the facility for value-added processing and the larger shed was built to facilitate this. However, it is not clear when the expansion of the facility would take place.
APNU+AFC Minister of Gover-nance Raphael Trotman in June had said that should controversial Chinese company Baishanlin and Vaitarna 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 said at a post-cabinet media briefing.
Asked by Stabroek News last month about progress in moving towards value-added processing, Trotman had said that it is safe to say that it has not happened and government is engaged in ongoing discussions with the companies. It is not clear if the company had indicated that it had begun processing logs, albeit on a small scale, in May.
Trotman had said too that Vaitarna has requested a meeting with him because they have apprehended the government’s displeasure at the slow pace at which they are rolling out their proposed plans.
The company had long promised to set up valued-added processing operations but took years to do so. In January 2014, the then Minister of Natural Resources Robert Persaud had said that Vaitarna was in an “advanced” stage of setting up the promised wood processing facility but a visit by Stabroek News to the site found that it was not so.
In a subsequent visit in January this year, Stabroek News reporters were barred from the facility and forbidden from taking photos and the company’s Chief Executive Officer (CEO) Chetan Narayan refused to speak on the matter.
However, in a letter to Stabroek News after the article was published, he had said that the company expects to begin value-added production after equipment for its plant is installed in the first quarter of this year. He had said that the machines for the first phase of project had already arrived in George-town and would be moved to the Wineperu site for installation during the first quarter of the year. “After installation, a trial run will be held to iron out any issues after which active added value production will commence,” Narayan said.
He had added 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 were expected to reach Guyana in the third quarter of 2015 and were expected to be operational by late 2015 or early 2016.
He had 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 Baishanlin have been exporting logs on a large scale even though Persaud and other PPP/C officials had said that logging companies were encouraged to process wood here.
Vaitarna had acquired its concessions in 2010. 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, Persaud had emphasized.
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 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. 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.
