Barama closure will hurt export earnings

Oct 16, 2010 News

– workers will be paid, government assures

By Leonard Gildarie
News of the closure of Guyana’s premier plywood production line continued to reverberate across the country yesterday with Barama Company Limited (BCL) saying that it may have only a week’s supply of plywood left.

Shell-shocked: Employees of Barama Company Limited who were given the shock news that they have lost their jobs.

Yesterday, labour officials also met with the 274 workers who have been laid off as even as the company and Government contemplated the market fallouts, both locally and internationally.
While the Ministry of Agriculture has launched an impact assessment in collaboration with BCL, new worries have risen on how the local construction industry, fueled by a housing boom, will deal with 60,000 sheets of plywood sold to the local market that will no longer be available from the company.
There were also fears yesterday of stockpiling by local distributors to drive prices up.
Yesterday morning, several worried employees, some of whom are living at the BCL site at Land of Canaan, East Bank Demerara, met with the company’s management, Minister of Labour, Manzoor Nadir and its union, the Guyana Labour Union.
Already, an impact assessment of the Ministry of Agriculture has found that not only will there be job losses directly and indirectly, but severe fallouts are likely in the construction and joinery sectors.
Trade implications
The closure of the factory will also have serious implications for trade and foreign exchange earnings with worries also for the scores of persons who supply BCL with the peeler logs used in making plywood.
According Minister of Agriculture, Robert Persaud, yesterday, his team is looking at alternative employments for the laid-off staff right within the forestry sector and even in mining.
“Of course, this is a serious blow to the forestry sector and to the country’s foreign exports earnings. We are working with the company and other stakeholders to cushion the impact of this unfortunate closure.”
BCL says that workers’ negligence caused a boiler, a key component used by the factory in the plywood production, to go down last week Monday. The boiler was turned off in the nick of time, averting what was said to be a possible catastrophe.
The company has approximately only 150 m3 of plywood in stock, too little to supply a hungry, local market. Homebuilders may now have to turn to either the more expensive sheet rock or imported plywood, raising construction costs.
Fallout
In addition to the job losses at BCL, the closure will also have implications for employees in the harvesting operations, companies that supply peelers logs, materials and spare parts, as well as transportation, civil works, repairs, maintenance, medical, security and contract labour.
According to Minister Persaud, until an alternative situation is found, a potential plywood shortage will be severe on the sector of the population involved in the Government’s low cost housing development.

BCL will now to look to export its veneer sheets since it can no longer use it to make plywood at Land of Canaan.

“The closure of this factory would mean that plywood or alternatives to plywood will have to be imported and hence will cost more to the consumer. At the same time, there will be no export of plywood which will result in a loss of export earning and a shift in the balance of trade for plywood, where Guyana will be an importer rather than an exporter.”
The closure of the factory will also see a drastic reduction in the harvesting of peeler species logs which were primarily harvested and supplied to BCL for their plywood production. Other uses of these species are limited.
According to Persaud, every effort is being made to correct the situation quickly because of the number of persons that potentially can be affected and the long term effect on already established markets.
Retrenchment
Meanwhile, Minister Nadir speaking on the issue, assured that workers will be protected and BCL has agreed to honor its obligations.
Around 07:00hrs, several of the shell-shocked workers met at the Land of Canaan offices as Chief Executive Officer, Clement Ooi, GLU’s President, Carvil Duncan and Minister Nadir, explained the situation.
Speaking with Kaieteur News, the Labour Minister disclosed that workers will be paid one month salary in lieu of notice, which took effect yesterday, accumulated leave and a severance benefit package which he says “exceeds” what is normal for the laws of Guyana.
In addition to placing the laid-off workers as “priority” on the Ministry’s vacancy list, there will be an immediate program to also provide training for children of the workers.
“We are looking at several alternatives here. The sudden closure of the factory will create hardships for a significant number of families.”
Kaieteur News understands that while Barama is holding a number of staffers responsible for the boiler going down, the company is being asked to pay off everyone, including the workers who are being blamed for the incident.
The closure of the factory may also have implications for BCL veneer factory at Buck Hall, Essequibo River.
That factory there was suppose to supply the Land of Canaan facility with veneer sheets which is used in the production of plywood.
With Buck Hall now being tested and Land of Canaan being out, BCL’s officials confirmed last night that it is considering directly exporting now. However, markets will have to be found hurriedly.
Then there is also quite a number of staffers living in the compounds of BCL at Land of Canaan.
“We have asked the company to consider giving them some time to move out since some of them have been there for years,” Nadir said yesterday.
BCL in a statement Thursday night, said that it had to fly in a representative of the boiler manufacturer to assess the state, including cost, of the damage and to provide the company with the most feasible options to rectify the situation in the timeliest manner.
“The preliminary findings and recommendations deriving from this assessment have confirmed that the damages are severed and will require at least one year to rectify. The cost to rectify the problem is currently being assessed by the manufacturer.”
In moving forward, the company said it intends to work closely with the Government of Guyana and gave its fullest commitment in “exploring all possible options in ensuring the reopening of the plywood factory within the most cost effective and timeliest manner.”