500 jobs to be created from US$9.5M investment in former Barama concessions

Over 500 employment opportunities are expected to be created following the award of two lots approximately 800,000 hectares of concession that formerly belonged to the Malaysian – owned Barama Company Limited.

The concessions were awarded to R.L. Sukhram and Sons Sawmill and Rong-An Inc, according to a statement from the Ministry of Natural Resources (MNR).

According to the statement, the MNR and the Guyana Forestry Commission had taken a decision to divide former Barama into four parcels, each of approximately 400,000 hectares after that the international firm decided against renewing its 25-year-old forest concession agreement with Government.

The Ministry said it advertised two of those parcels as State Forest Exploratory Permits, which means that there is a three-year process of assessment prior to commercial full-scale harvesting.

The third parcel was identified for conservation and research, while the fourth was identified for small concession allocation of areas 20,000 acres and less.

Parcel 1 is a forest area of size 417,809.23 and is located in the Essequibo region (North West, Mazaruni Potaro District). Parcel 2 is a forest area of size 432,262.59 and is located in the Essequibo region (North West, Mazaruni Potaro District). The concessions are located in Northwest Guyana in Region 1 in the Barima-Waini, and Region 7 in the Cuyuni-Mazaruni sub-regions. The concession areas both have a high occurrence of a number of high-value commercial timber species, including Baromalli, Greenheart, Purpleheart, Mora, Wallaba, Crabwood and Kabukalli, among others.

Parcels 1 and 2 were opened for Expressions of Interest (EOIs) for the period ending February 10, 2017. These were advertised in the local media as well as in the international publications ‘Development Business’ and ‘The Economist’ and placed on several websites.

Ten submissions were made at this deadline, some for both parcels while others were for one or the other. These firms were invited to submit State Forest Exploratory Permit (SFEP) applications, pay the non-refundable fee, and complete a Business Plan Summary by April 28, 2017.

At the deadline of April 28, 2017, five applications were received from Chemtech (Trinidadian firm) for Parcel 1, R.L. Sukhram and Sons Sawmill for Parcel 2, Rong-An Inc. for both Parcels 1 and 2, Forlene and Sons for Parcel 2  and ACE Resources (Canadian firm) for both parcels.

The Ministry said following the receipt of applications, the Technical Sub Committee of the GFC Board of Directors conducted a full review of each application. The review of the Technical Sub Committee concluded that Parcel 1 should be issued to Rong-An Inc., and for Parcel 2 to be issued to R.L. Sukhram and Sons Sawmill for a three-year period commencing July 2017 to July 2020. Following this process, a recommendation was made to the full Board of Directors at the at the 129th Meeting held on June 27, 2017 approved for Parcel 1 to be allocated to Rong-An Inc., and for Parcel 2 to be allocated to R. L. Sukhram and Sons. This decision was approved by the full Board and has been implemented by the GFC.

The Ministry said it is expected that the awarding of the two parcels will result in benefits to the forestry sector over the course of the full operationalizing of the utilization/harvesting plan for the concession.

These include a total investment of US$9.5 million by 2020, a total of 524 new jobs when the operations are at full scale, an increase of national production level by at least 189,000 m3 annually, an increase in export revenue by at least US$7 million, and an increase in harvesting of Lesser Used Species from the current 10-15 percent to at least 25 percent of total production.