Camilo Thame, Business Reporter
FPMC director Luvindra Sukhraj (left) and consultant to the Guyanese firm, Rodney Raghubansee (second left), look on as Foreign Trade Minister Anthony Hylton and Indèra Persaud, Consul for Guyana, examine a wood sample at the Guyana booth at the International Trade Expo, held at the Jamaica Pegasus hotel, New Kingston, October 8-11. - Winston Sill/Freelance Photographer
When Luvindra Sukhraj and his colleagues from Guyana's Forestry Products Marketing Council (FPMC) made a swing through an international trade fair in Kingston this week, they hoped to convince local merchants and builders that it made better business sense to source their hardwoods from the South American country that is the island's partner in the Caribbean Single Market and Economy (CSME).
After all, in 2004 when Jamaica imported over 448,000 cubic metres of wood products for the construction industry for which it paid US$44 million or J$2.72 billion, a mere 378 cubic metres, mostly Mora and Greenheart, came from Guyana. The bill for the Guyanese imports was US$132,000 or J$8 million.
But it is not just to Jamaica to which the Guyanese are looking to pump business. Before Kingston, they had been to Trinidad and Tobago and Grenada as part of a new and focussed effort by the administration of President Bharrat Jagdeo to seriously exploit what is one the country's major natural resources - its forestry.
Substantial control
Indeed, only in Barbados where they have more than 30 per cent of the market, does Guyana control a substantial portion of the regional market for timber and timber products.
"Forestry makes up four per cent of Guyana's gross domestic product (GDP) and earned about US$50 million from exports in 2005," Luvindra Sukhraj, a director of the FPMC, told the Financial Gleaner in an interview.
"Our target is for 12 to 15 per cent growth in 2006, and we hope to increase its contribution to GDP to 10 per cent in three to four years."
This expansion, which is expected to be driven substantially by exports, is within the ambit of the country's new National Competitiveness Strategy (NCS), the outcome of a sort of social partnership compact between the government, labour and the private sector to lift Guyana's global competitiveness with the ultimate goal of delivering "greater economic growth."
Forestry is not the only sector being targeted under the NCS, the most recent version of which was tabled in May. Non-traditional agriculture, fisheries, manufacturing, tourism and information and communication technology (ITC) are also gaining attention.
But the FPMC was launched last December with the mandate "to ensure the sustainability of Guyana's forest products industry by increasing value-added and improving its competitiveness through enhanced market access and increased trade opportunities".
"This sector is the greatest potential to catalyse the development of Guyana and has the ability to become the largest export earner," Sukhraj said at the Kingston fair, which was hosted by Jamaica's consular corps.
At present sugar is the single largest export earner for Guyana, grossing and estimated US$160 million in 2005, representing 30 per cent of merchandise exports and 18 per cent of GDP.
Squeezing value
But the country of 82,978 square miles - 20 times larger than Jamaica with only 770,000 people, hopes now to squeeze value out of a resource - commercial forest - that covers nearly 63,000 square miles or approximately 75 per cent of its land area.
"... That Guyana's forestry resource is so much larger than the rest of the other CARICOM countries should signify that Guyana can take advantage of the CARICOM region's considerable forest product-related demand, especially the demand of the substantial and growing Caribbean tourism industry," the competitiveness strategy document points out.
The forestry sector is made up of a range of enterprises involved in log production, plywood, timber, round wood, non-timber forest products, fuelwood, manicole palm, and production of value-added forest products, such as wooden furniture.
The sector currently contributes around four per cent of GDP, six per cent of exports, which totalled US$530 million in 2005, and around 20,000 jobs.
But the sector's comparative advantage is constrained by high energy and transportation costs and out-dated technology and equipment. The Guyanese, however, stress that their greater exploitation of the forestry resources will be environmentally responsible.
"(The strategy is to) use selective logging instead of clear cutting (harvesting entire blocks of forest), which has additional cost including building roads to preserve specie," said Rodney Raghubansee, a FPMC consultant was was also in Kingston this wee.
The price of Guyanese wood and wood products is comparable with that form Brazil, a country easily identified by the rest of the region for its variety of hardwood specie. But beyond that there are good economic reasons for CARICOM member countries to buy their wood products from Guyana, Raghubansee argued.
"There is additional advantage of being a part of the Caricom which exempts from duties," he said. "Also the regular shipping routes - at least two trips weekly - ensure speedy delivery, and it is in FPMC's interest to serve as an intermediary between purchaser and buyer, to ensure quality of products."
However, Guyana's abundant supply of high quality raw forest, estimated at around 100 commercially accepted specie, is countered by the limited knowledge in the region of the full range of offerings.
"We need to expose the region to our products and species," Sukhraj said. "In past only about five species were marketed - Greenheart, Purpleheart, Mora Kabykal and red cedar. People tend to look to south and central America for those products."
- camilo.thame@gleanerjm.com
