Forest Products

 

	Box 2.7: Timber Concessions in Guyana
	Approximately 52 percent of State Forests have been allocated to timber harvesting concessions. The industry uses world-class harvesting techniques to ensure the sustainability of Guyana’s forest resources.
	Three types of concessions are awarded, based on area size and duration: - Timber Sales Agreement – granted up to twenty-five years for areas in excess of 24,000 hectares - Wood-cutting Lease – granted for up to ten years for 8,000 - 24,000 hectares - State Forest Permission – granted for a two-year period on no more than 8,000 hectares
	A selective logging approach is used for timber harvesting activities, where an identified number of commercial species above a specified diameter are extracted from an area. Forests are logged in a manner such that harvesting does not result in a break in the overall rainforest canopy. A Code of Practice sets minimum operational standards requirements, and the Guyana Forestry Commission monitors harvesting practices, through a structured program of field visits.

Guyana has vast forest resources that cover more than three-quarters of its landmass and contain over 1,000 different tree varieties. Currently, 120 species are being logged in various forms, with between 12 and 15 of these logged on a commercial scale through a system of concessions (see Box 2.7). The most sought after species include Greenheart (Colubrina arborescens or Chlorocardium rodiei), Mora (Mora excelsa and Mora gonggrijpii), Baromalli (Catostemma altsonii), Purpleheart (Peltogyne spp), Crabwood (Carapa guianensis), Kabakalli (Goupia glabra), and Wamara (Bocoa prouacensis). In 2005, Guyana exported over US$52 million in forest products, ranging from raw and sawn timber, to plywood, molding and furniture products. Plywood accounted for about 20 percent of all forestry exports, with higher-value products, such as furniture, representing a small, yet rapidly growing share (5 percent). Guyanese wood experts estimate that Guyana is capable of filling most of CARICOM’s demand of 300 million board feet of tropical wood.

While Guyana is traditionally known for its export of timber in raw or semi-processed forms, the Government and segments of the forest product industry have placed an emphasis on promoting value-added forest product production for export to the Caribbean, U.S. and Europe (see Box 2.8 below). In this regard, there are a number of comparative advantages, similar to those found in other light manufacturing industries, such as affordable and trainable labor (see section on Light Manufacturing below), as well as attractive investment incentives.

A number of lucrative opportunities exist for investors interested in working with Guyana’s wood industry. These include furniture (e.g. hardwood and wicker), plywood and veneers, molding and doors, parquet, floor tiles, and other related products. Within these product sectors, additional value can be achieved on investments that meet the requirements of certain environmental and social certifications from organizations such as the Forest Stewardship Council (FSC). There are also a number of opportunities to expand the development and marketing of lesser-known species where utilization is well below capacity, or where species are yet to be utilized commercially. Even in cases where the availability and accessibility of species does not warrant large-scale exploitation, lucrative opportunities exist for investors able to develop products for niche, high-value markets.

	Box 2.8: Guyana’s Wood Products Industry: Investing Towards Value-added Production and New Markets
	In recent years, Guyana’s wood products sector has experienced a renaissance, with significant investments towards the manufacture and marketing of value-added and high-value niche products, as well as strides towards certification under the Forest Stewardship Council (FSC). Examples include: Barama: Investments in value-added and certified sustainable production – A Malaysian-owned firm, Barama is Guyana’s largest wood products company, contributing over 50 percent of the country’s exports in that sector. It supplies major home improvement clients such as Lowe’s Home Centers, who purchase 50 percent of Barama’s products. Although traditionally known for its plywood and milled lumber, Barama is investing US$35 million to expand production and diversify its products. The investment includes a state-of-the art sawmill, a kiln drying facility, a veneer plant, and a finishing facility for furniture components to be exported for assembly in Asia, for final export to Europe. Barama is planning on building a 3-megawatt co-generation plant. Through these investments, Barama expects to increase its volume and variety of exports to the U.S., Europe, Central America and the CARICOM region and create 500 jobs.
	Barama has spent a number of years developing the systems and controls necessary to seek FSC certification, with help from the World Wildlife Fund (WWF). Once certified, Barama will be better positioned in a global market increasingly concerned about sustainable utilization of resources. Barama expects to receive a 5 – 10 percent premium on FSC certified wood.
	Variety Woods & Greenheart: Investments in value-added wood production – Although it traditionally harvested and exported logs, Variety Woods and Greenheart Ltd. has continuously worked towards downstream, value-added production of both well-known and lesser-known wood species for export to the U.S. and Europe. This is based on the company’s understanding that Guyana must maximize the value it receives from its forestry resources for the industry to be sustainable and truly contribute to the national economy. As such, Variety Woods has recently invested in new machinery (e.g. molders, dust extractors, lathes, etc.) to produce value-added flooring, paneling and siding for export. Once complete, these investments are expected to increase product value by approximately 25 percent, without impacting the volume of wood extracted.
	Liana Cane and Precision Woodworking: Collaborating in design and product lines – Two of Guyana’s leading furniture manufacturers, Liana Cane and Precision Woodworking have recently teamed up with a Canadian designer to design, prototype and manufacture a joint product line targeting niche furniture markets in the U.S. Under this scheme, each firm will manufacture furniture pieces and components for which they specialize—Liana Cane with rattan and cane pieces, and Precision with hardwood pieces. This represents a true leap forward for the Guyanese wood products industry, where inter-firm cooperation was traditionally limited. Through this collaboration, the two firms will be able diversify their product offerings, respond to larger orders, and access discriminating, high-value export markets, while at the same time enhancing Guyana’s image as a source for modern, stylish and quality furniture products.

Organizational Support
There are a number of governmental and private organizations involved in the forest products sector. The Guyana Forestry Commission (GFC) is the government agency responsible for the administration and management of the 13.6 million hectares of land classified as State Forest.

The Forest Products Association (FPA) represents private forest producers and has substantial practical knowledge of timber production and forest uses. The FPA collaborates with the GFC in selected training and research initiatives. This includes the Forest Training Centre Incorporated (FTCI), which was established in collaboration with the Tropical Forest Foundation (U.S.) and DFID (UK) to implement a Reduced Impact Logging program focusing on hands-on demonstration and training in an actual timber harvesting operation. The FPA is also a timber development partner in the Iwokrama International Centre for Rain Forest Conservation and Development. Iwokrama aims to promote the conservation and sustainable use of tropical forests that will lead to lasting ecological, economic and social benefits.

The GMSA represents the interests of down-stream wood products manufacturers (see Manufacturing below for details).

The Forestry Products Marketing Council of Guyana (FPMC) was recently established “to ensure the sustainability of Guyana’s forest products industry by increasing value and improving its competitiveness through enhanced market access and increased trade opportunities.” Functions include market intelligence, trade missions, developing industry and product information, and providing advice on export-related services such as product packaging and handling etc. The Council reports to the Ministry of Fisheries, Crops and Livestock.