Baishanlin operations at standstill
-prospective partner due next month
Officials from Long Jiang Forest Industries Group are expected in Guyana next month for a ‘fact-finding mission’ as it seeks to fully take over the operations of logging firm Baishanlin whose operations have ground to a halt.
The officials from the Chinese state-owned forestry company were expected in Guyana since May but did not show. They are now expected to arrive next month. “Earlier in the month a letter was sent which indicated that officials from Long Jiang Forest Industries Group are expected in August for a fact-finding mission,” Minister of Natural Resources Raphael Trotman told Stabroek News recently.
Stabroek News had previously reported that Baishanlin was to be taken over by Long Jiang Forest Industries Group which has already acquired 55 per cent of the shares in the troubled logging company and intends to fully take over the firm this year. Minister of State Joseph Harmon had made the disclosure in April following an uproar over a photo of him and officials of Baishanlin in a private jet in China. Harmon had said that Vice Director of the company, Wong Dong Xu, in the presence of officials of Baishanlin, gave the assurance that the company’s officials will be in Guyana by May 2016 to complete due diligence for the takeover, and to satisfy and expand on the obligations of Baishanlin to Guyana. However, they did not come and are now expected next month.
Baishanlin has failed to fulfil several commitments made under its investment agreement here. Since coming here in 2006, it announced big plans in various sectors for Guyana but concerns have been raised by some analysts that its primary interest is logs for export, with little downstream processing. The company has failed to live up to commitments to do value-added processing despite benefiting from billions of dollars in tax concessions. Several of the company’s projects have ground to a halt as it faces financing difficulties.
Earlier this month, Trotman told Stabroek News that he was waiting to be advised by the Board of the Guyana Forestry Commission (GFC) on the way forward for Baishanlin. Last week, he said he had not received any updates from the GFC Board on the company and was unable to say when a report will be forthcoming.
“I’m unaware of the status of the workforce except that reports received are that a number of foreign workers had returned to China and there were almost no workers engaged in any activity except to provide security for the equipment that is stationary,” he added. Asked about the next steps for government in relation to the company, Trotman said he is awaiting a number of reports.
“At this time I am unable to say what government's position is and will await having both a report from GFC and on the Long Jiang Co’s visit as well as the views of the ministries of Finance and Business before taking a report to Cabinet for its consideration and guidance on the way forward,” he said.
Stabroek News visited Baishanlin’s operations at Coomacka and Moblissa earlier this week and unlike on previous visits, activities had ground to a halt.
At Coomacka, there was no activity though some cut wood was stacked at the back of the sawmill. There were two Chinese nationals on site and two Guyanese workers.
Stabroek News was told that activities had stopped for a while now and this appeared to be the case as vehicles and other machinery were parked in the compound with no indication that they had been driven in a while. As well, Stabroek News was told, the machinery used to cut the wood had broken down.
According to one man, they were there to oversee the equipment as thieves would raid to steal items. The two Chinese nationals at the location indicated that they could not speak English.
At Moblissa, two logs had been placed across the road to block vehicles from accessing the site. Here there was also no activity. Stacks of logs including some that had been squared were piled up at the site while three huge cranes stood idle. A barge was left partially completed though what appeared to be two new ships were moored at the waterside. Baishanlin had also used the site to construct watercraft. Trucks and other pieces of machinery were parked in rows and appeared not to have been moved in a while. A Chinese national who was on site indicated that he could not speak English.
On Wednesday, Trotman told the Parliamentary Committee on Natural Resources that as far as he was aware Baishanlin’s operations are at a standstill. He added that while it is too soon to predict the future of the company, the sense is that it would be totally absorbed by another entity and the government would have to make a decision to allow this or to “kick the investment out” altogether.
According to GFC data, Baishanlin’s TSAs include Haimorakabra Logging Co Inc covering 52,896 hectares and Sherwood Forrest Inc covering 167,075 hectares of forest.
Further, Baishanlin is the majority shareholder in Kwebanna Wood Products Inc, Puruni Woods and Wood Association Industries Co whose TSAs cover 221,108 hectares of forest in total.
Recently, President David Granger said that Baishanlin is in the process of transformation. “It will disappear as a corporate entity and that will bring an end to any controversy involving Baishanlin as a company. A new entity will take it over and we will have to renegotiate…. Baishanlin is coming to an end. I cannot say what the situation is in China but I believe Baishanlin is undergoing some corporate transformation within China itself,” he said.