Eighty-one employees from Barama Company Limited were retrenched as the company looks to improve its profitability and sustain its future operations, General Manager Mohindra Chand told Stabroek News yesterday.
Chand said that the employees were let go on November 27 and paid their severance. He explained that after much consultation with the workers’ union a decision was made for the company to terminate the services of 100 workers. However, in the end, the company instead, decided to end the services of 81, Chand said.
He told this newspaper that the company has been finding it difficult to maintain a profit margin that would enable it to continue its operations. He noted that the local market, which is one of their largest, has been competitive with many alternatives and as such they have not been seeing the returns they would have projected.
He explained that with an array of alternatives to plywood on the market, the local market has been challenging.
The General Manager explained further that in the export markets they have to compete with manufacturing giants who offer products at a cheaper cost.
“We have the quality but we have to compete with giants. In some countries it is a price-sensitive situation,” he explained.
According to Chand, they are working aggressively to target new markets in the Caribbean Community and Latin America to improve the company’s financial stability. He also disclosed that they are preparing to engage the government and request relief that would allow the company to stay afloat.
He refrained from divulging any details on what would be requested of the government, but stated that they have a “menu of items” which they will engage the government on.
The General Manager is hoping that the meeting could be facilitated before the end of the year and added that they will be pushing for the new markets as they are seeking to reverse the retrenchment.
“Barama is a Guyanese company which is unique. We have been around for 27 years and we are the largest manufacturing company of plywood in the country and we can be the largest in the Caribbean. We have the capacity to supply and meet the potential demands but we have to look at how we can cut cost and remain profitable,” Chand posited.
Additionally, he pointed out that the cost of energy has been another hindrance to the company’s profit margin and it is one of the key issues they are looking to discuss with government when they meet.
“We are self-producing the electricity we need but the cost is very high for fuel and parts. We also have to keep a team of technical experts on staff to maintain and look over the power plant. So the cost is always high for production,” Chand related.
He related further that the termination of services would not impact their production nor supply to the market.
Barama has declined significantly from its heyday in 1991 when around 1200 persons were employed in the various aspects of its operations. In October 2016, the company decided against renewing its 25-year forest concession agreement and announced that it was going to downsize.
Prior to the agreement ending, BCL had laid off some 180 workers over a three-month period. An additional 320 followed by the end of 2016 and some 300 workers remained.
Addressing the company’s plans in February 2017, Chand explained that it would be focusing heavily on value-added production. “We just want to operate the plywood and veneering factories and hopefully make it viable,” he said, while emphasising that the country would gain, immediately since at least 12% of total log production would now have a market.
While they were still testing the waters with the venture, since the company would be operating the plywood manufacturing and veneering factories without a forest concession of its own, Chand said that the unpredictability of a stable supply of raw material would greatly affect how well it performs. “Providing that Guyana can supply the factory at a level which can make it viable and at the same time we can regain certain market aspects, which we would have been losing against imported plywood,” he said. He noted that the plywood industry was being pressured with respect to the price from the Brazilian, Chinese and Chilean markets. “They have it at a lower cost because they have cheaper energy, cheaper manpower and better access to raw material,” he had explained.
