Indian coffee company will not set up main processing plant here

May 29, 2012 News

…Logs will continue to go out

The Indian coffee company which was given a forestry concession to mainly carry out value added

V G Siddhartha

activities has said that its main plant will in fact be in India and not Guyana. This raises concerns that the company will continue to export logs out of Guyana.
Two months ago the company, Vaitarna Holdings Pvt. Inc, admitted shipping several containers out of the country within recent months despite no processing facility built here as yet.
The company owns the popular Coffee Day Inc. franchises in India.
Vaitarna had come under scrutiny in April last year after the Times of India reported that the company was granted almost 1.8M acres of forest lands in Guyana. The company wanted the logs for its furniture business in India, it was also reported.
Government, to quell questions whether it was a sweetheart deal, insisted that the company was not too much interested in log exports and would be looking to establish plants here.
But in a news report in the Indian media, V G Siddhartha says the company’s main plant will be in India, indicating that it will continue to export logs out of Guyana and use very little here.
“On projects such as the one we are into, there is always bound to be some opposition from various stakeholders. We got the lease for this land from a US company which was going bankrupt. We have been working on this project for around 18- months and we have around 100 employees. We will set up a processing centre in a period of time there, but the main centre will be in Chikmagalur,” he said.
The report was carried in India’s Business Standard under the heading “Rumblings on Coffee Day Group’s Amazon safari.”
In justifying the report carried in this newspaper that almost 50 containers of logs were exported since February, Vaitarna said that “any new company in the startup of their operations goes through a transition period similar to Vaitarna Holdings Pvt Inc.”
The company said that it is a fact that it has the facility like any other forestry company to export logs and other forest products in keeping with the National Log Export Policy and the Government of Guyana guidelines.
“It has been established that in addition to log exports in accordance with National Log Export Policy, the company will engage in added value activities. The GFC has a policy of added value forestry activities and would have rejected any application from the company if it was solely interested in log exports,” former Minister of Agriculture, Robert Persaud, had told the media during a press conference to explain the deal.
It was disclosed, then, that VHPI was issued a State Forest Exploratory Permit (SFEP) previously issued to Simon and Shock Intl. (SSI), a US company, and a Timber Sales Agreement (TSA) previously issued to Caribbean Resources Limited (CRL).
“The real facts are that a logging concession of 345,961 acres previously leased to CRL was re-allocated to VHPI. Contrary to what is reported, there will be no large scale exportation of logs, since the company has committed to get involved in downstream activities; in addition to logs exports in accordance with the National Forest Policy (NFP),” Persaud had stated.
It was explained that the company first has to do a forest inventory; present a business plan that incorporates the inventory amongst other requirements, and conduct an Environmental and Social Impact Assessment (ESIA).
Siddhartha has floated a company, Dark Forest Furniture Company, to retail the furniture in India and has also tied up with Future Group for this. It is estimated that he has earmarked around Rs 300 crore to get the furniture project going.
Siddhartha, who began as a coffee exporter, eventually established himself as the leading player in the coffee retailing business. He has since diversified aggressively into wealth management, Special Economic Zone development, logistics and hospitality, besides the emerging interest in furniture.