Logs shipment…Indian coffee company insists it did nothing wrong

Apr 06, 2012 News

–    says still in transition phase

An Indian coffee company which has logging concessions in Guyana yesterday admitted shipping several containers out of the country within recent months, despite no processing facility built here as yet.
In a statement, Vaitarna Holdings Pvt. Inc, apparently the local operating subsidiary of Vaitarna Holdings Private Inc. (VHPI), insisted that the logs export was above board, and that it is not the company’s intention to engage solely in log exports.
The company, which is part of the group that owns the popular Coffee Day Inc. franchises in India, also said that the company will soon be transitioning to the production of value added products.
“…and we are currently exploring the feasibility of setting up a wood processing plant at various locations. Please be advised also that the species being exported are exported by other forest companies,” the statement continued.
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.
“Vaitarna Holdings Pvt. Inc would therefore be grateful if the statement that Vaitarna Holdings Pvt. Inc is exporting logs, contrary to its agreement with the Guyana Forestry Commission, can be corrected.”
The statement was signed by one Chethan Narayan, Director of Vaitarna Holding Pvt. Inc, which is said to be located at 228 Lance Gibbs Street, Queenstown.
Yesterday, Kaieteur News reported that the company shipped the containers of logs out despite no processing facilities established here as yet.
There have been questions in the past about wholesale logging and exporting, something that government says it has been working diligently on to curtail and to encourage more local value-added processing.
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.

Robert Persaud

The majority of logs shipped out over the last two months are said to be washiba, a hardwood used to make top-end furniture. Also shipped were purpleheart, greenheart and snakewood.
Guyana has not made a secret of its intentions to drastically reduce log exports in favour of more downstream or value-added processing.
The former Bharrat Jagdeo administration had heavily defended the Vaitarna Holdings Private Inc. (VHPI) deal.
Coffee Day is owned by V. G. Siddhartha an Indian businessman from Karnataka.
“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).
“In doing the ESIA, there will be at least two public opportunities for persons to indicate their support/ objection to the granting of logging rights to the company. Also, this process is led by the Environmental Protection Agency (EPA) and the Environmental Assessment Board (EAB).”
“When this documentation is provided to the satisfaction of the GFC and its technical team, EPA, EAB, Cabinet Sub-Committee on Natural Resources and Cabinet; only then can approval for logging be given.“So the process is far from over. The current National Forest Policy, under revision, does not say no to log exports, rather it encourages and promotes value adding,” Persaud had emphasised.
“The National Log Export Policy is testament to that – it provides strong disincentives for log exports; this would be revised in 2011 with the aim of providing even stronger disincentives.”
VHPI had paid over $600M (US$3M) to pay off CLICO policy holders in Guyana.
Asked then how long it may take before the Indian company can start harvesting should the green light be given, the Minister disclosed between two to three years.
Earlier this week, GFC’s Commissioner James Singh when contacted on the containers of logs that were shipped out, disclosed that the company would be doing some processing in Guyana. However, it is unclear when this would start. He however pointed out that the company has all its paperwork in order, with nothing stopping them from harvesting and exporting.
A forestry official with close links to the VHPI, in confirming the shipment of the almost 50 containers of logs, said that company is in full swing of harvesting, but the official was unclear of when there will be the establishing of processing facilities by the company in Guyana.
VHPI has also not sold wood locally, it was said.