The Malaysian-owned Barama Company Limited yesterday reported that it is well on the road to financial recovery and is preparing to get back into the lumber business with a $1 billion (US$5m) plan.
It was also announced that the company had rehired 80 persons it had laid off back in 2018 and managing director of the company Mohindra Chand said that the investments proposed over the period would see 140 more persons added.
“In the last eight months, we would have increased our output by 200 per cent, introduced a new superior product and started a reinvestment that would see hundreds of millions spent,” Chand said yesterday at the company’s 30th anniversary event, held at its East Bank Demerara, Land of Canaan headquarters and factory.
He disclosed that over $500 million will be spent on major rehabilitation of the company’s equipment and machinery and $500 million more on infrastructure, human resource, training, certification and other areas “bringing this investment to about $1 billion”.
“(Barama) 3.0 is taxiing on the runway to take off,” he declared.
While not going into detail, Chand said that the company also plans get back into the lumber business.
The managing director praised the Guyana government for increasing the Common External Tariff (CET) on imported plywood produced outside CARICOM as one of the main pillars for the company’s financial recovery but made a plea to the government to remove the taxes on the glue it uses to make the plywood here.
Chand said that this was because the special glue cannot be sourced from any Caribbean country and is bought from a Norwegian company that manufactures it to international standards.
Also lobbied for was that the country’s Pay As You Earn (PAYE) income tax threshold be moved to $100,000 and that taxes on overtime be cut as it is “already a sacrifice” for those going beyond their regular work hours.
He said that tax concessions in manufacturing areas are needed to prepare locals to be competitive. We are not asking for handouts but same things Guyanese businesses are beneficiaries of,” he said.
Barama also yesterday unveiled a “superior” quality of plywood it has been working on that is weather resistant. The company said that the wood was put to the test under extreme conditions and even after four months of being immersed in water, it was found that it had not been penetrated and therefore would be beneficial not only to locals but especially in the Caribbean.
Delivering the keynote address at the plywood manufacturer’s event, President Irfaan Ali pointed to the over $1 billion the company said it will invest into its operations over the next years under the Barama 3.0 plan and urged that the company engage stakeholders to build wider value-added markets in the region.
“We have to determine the priority areas and structure that investment to meet those areas,” the President said.
And as demand for prefabricated houses increases in the region, President Ali stressed that local manufacturers have to continuously look at diversifying their portfolio to extend their markets while simultaneously adapting to meeting global certifications needed to serve them.
Changing
“We have to take that the world is changing, the market is changing, and we have to move towards product certification. We cannot speak about accessing newer markets in isolation of the certification needed to enter the newer markets,” he noted.
Ali remarked that investments and value-adding must be linked to quality and quality consistency as these are very important when international markets are looking at products.
“Sustainability, affordability and product development has to be a focus. Developing is not only for the local market, it is to demonstrate to the regional market that we have the local capacity to provide. That is where the conversation has to go. How do we integrate all the players in a consortium where we build a home that’s affordable and package that in a crate and export to the region? The region is exposed to many vulnerabilities, hurricanes and such, so we know what the product has to respond to,” he said.
“We have to be efficient, offer a high quality product that is assembled in a fast, efficient manner and can withstand the threats. Then, we can go to Caricom and say, ‘we in Guyana can produce this package. Let’s talk about tax barriers’… but to do that requires GMSA (Guyana Manufacturing and Services Association), government, private sector… everybody, together talking about development of the sector and opportunities, and that is where the conversation must begin,” he contended.
The Barbados government recently announced that it will be importing 150 prefabricated emergency houses from China to “jump start” and boost its response to residents whose houses were affected by the freak storm and Hurricane Elsa, the Barbados Nation recently reported.
That country’s Minister of Housing, Lands and Maintenance, Dr William Duguid had said that it would come from the $20.3 million it asked its House for, to cover the cost of the repairs and rebuild programme for roofs and houses damaged or destroyed by the adverse weather that affected Barbados in June and July, respectively.
Other countries in the Caribbean import prefabricated homes and some would adjust them to their building codes during the assembly processes.
Ali assured that his government will do all it can to help local businesses develop and will create the infrastructure to make getting to locations for investments possible.
Lobby
Government, he explained, will also lobby CARICOM and other countries to get concessions and markets for local products but that businesses here have to be able to produce quality products and in volumes needed.
“We can’t fight at the Caricom level and not do the things to up our production. The local market is going to grow drastically and we have to be prepared… increase in value added must be linked to the market,” he said.
Ali heaped praises on the company for its investments and bringing back its laid-off workers and singled out the more than 40 per cent women workforce of the company, as he hailed them for their sacrifices in getting the company’s production up to more than 200 per cent over the past year.
In late 2019 the company announced that it would be laying off 81 workers as it looked to improve its profitability and sustain its future operations.
The company’s director had said that Barama had been finding it difficult to maintain a profit margin that would enable it to continue its operations. He noted that the local market, which was one of their largest, had been competitive with many alternatives and as such they had 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 had been challenging.
On infrastructural development and foreign investors coming in, Ali posited that sometimes companies in the extractive sector are criticised without getting credit for the monies they put into infrastructure.
“Sometimes we underestimate the value and what they would have invested in infrastructure that allows for not just them but thousands of operators to get access to their lands. Sometimes when we devalue these companies and say these foreign investors are only coming in and extracting, we forget that is not it at all,” he said as he reasoned that billions of dollars are spent to get to the areas that would give the companies their opportunities at working while it gives Guyanese the ability for accessing those and nearby areas.
