Analysis and News

Barama returns to its ‘roots’ with $1B investment in expansion

BY GEOCAP's Contributor: Vishani Ragobeer

The Barama Company Limited, a well-known establishment that has been operating in Guyana’s forestry sector for 30 years, is seeking to return to the lucrative logging industry and is already seeking to finalise nearly 1 billion GYD for expansion efforts.

Since its establishment in Guyana in 1991, Barama has invested more than 43 billion USD. Complementing this investment was the creation of approximately 800 jobs for Guyanese workers. The company was, reportedly, Guyana’s biggest forestry operator.  

In 2016, however, the company was forced to relinquish its forest concession, exiting forestry operations altogether. The company subsequently springboarded into plywood and veneer manufacturing, and sawmilling.  This necessitated a downsizing of the company’s local operations.

But, the company is hoping to return to its roots- literally. While speaking at the company’s 30th anniversary celebrations recently, Barama General Manager Mahendra Chand highlighted that the company is looking to finalise an investment of nearly 1 billion GYD (5 million USD) to expand its operations again, which includes returning to the logging business.

Of the sum, 500 million GYD will be spent on the rehabilitation of the company’s equipment and machinery while another 500 million GYD will be spent on infrastructure, human resource development and training, certification, and other crucial areas.

Chand remarked that this investment is being made due to cognisance of the opportunities for growth that exist within the forestry sector. Importantly, hundreds of jobs are expected to be created as the company continues with these expansion efforts.

Locally, the Guyana Office for Investment (GO-Invest) has reported that the forest sector employs an average of 26,000 people. Moreover, this sector has contributed nearly 45 million USD in export value internationally, over the past five years.

And, there are numerous incentives for investing in the forestry sector. These include the removal of Value Added Tax (VAT) on machinery and equipment, exports, and on all-terrain vehicles (ATVs) and the change of the log export policy to allow saw millers to export logs.

Additionally, the government lobbied for the relaxation of the Common External Tariff (CET) of imported ply in Guyana from 10 percent to 35 percent. This CET is a single tariff rate agreed to by all members of the Caribbean Community (CARICOM) on imports of a product from outside the CARICOM.

Barama does not only have the opportunity to produce, market and export local timber products but the company was apprised of the possibility of exporting prefabricated houses. These houses are those that are manufactured in sections to enable a quick and simple assembly on site.

And, during a Barama anniversary event, President Dr. Irfaan Ali emphasised that the houses must be of high quality, efficiently shipped and can be assembled in a fast and efficient way.  

Importantly, too, the President said that if companies like Barama are able to produce these high-quality, prefabricated houses, then the government would be able to engage CARICOM on taxes, barriers and trade issues on these products.

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