…crucial meeting on future here in two weeks’ time

BAISHANLIN International Forest Development Inc (BIFDI) said it has been unsuccessful thus far in locking down its two largest shareholders to invest here and that a major meeting with key stakeholders, including the Chinese Government, will take place in another two weeks to determine the company’s future in Guyana. Guyana has already repossessed the forest concessions granted to Barama and is making moves to recover money owed by the company. However, the company said it is dependent upon its partners to provide the much-needed financial assistance to deliver on its promise to the government of Guyana, a wood-processing factory. Baishanlin’s Trade and Foreign Department Manager, Eddie Wang, told the Guyana Chronicle on Thursday that the company has encountered financial challenges and is unable to maintain its operating costs here along with constructing the wood-processing facility as promised.
As such, the company initially partnered with Da Xing Anling Group Inc., a state-owned forestry commission partnered with Baishanlin under the commitment that Baishanlin submits a business plan of its projects to the Commerce department of the Chinese government. This was done and Da Xing Group got on board with Baishanlin. It was finances provided by the state-owned forestry company that begun phase one of the wood-processing facility.
Wang explained that after securing land for the wood-processing facility from The National Industrial and Commercial Investments Limited (NICIL), it was necessary for funds to be used to clear “virgin forestry land” located at Fitz Hope, near Mobilisa, Region 10. At that time, the company had submitted documents to the Guyana Revenue Authority (GRA) requesting duty-free concessions for its machinery to be used for the clearing and filling of the land in the first phase and beyond. However, in 2014 and some parts of 2015, the Da Xing Group decided to re-evaluate its investment in the project here following several newspaper reports about Baishanlin, Wang told the Guyana Chronicle.
He said during its re-evaluation, the state-owned forestry group was required to submit a report to the China Development Bank (CDB), as it was that bank that provided the group with a loan for the construction of the wood-processing facility. “…the banks considered writing off the project as it was facing high risk… according to the bank-loan procedure, they have to redo evaluation for the project to ensure that it was wise to continue investment.”
As a result of the position taken by that stakeholder, Baishanlin is unable to progress. The company is maintaining its inability to finance the construction of the wood-processing facility which was expected to provide much-needed jobs to Guyanese. “…our company’s logging business is not enough to keep the operations and keep investing in the project- the company’s business just keep our basic operation.
“The project funding comes from the Bank loan…when the bank said it has to redo the evaluation, I am not sure the cost of the second phase but…we still keep waiting, we keep submitting documents to them and explained the situation here. “
It was a result of the position taken by the China Development Bank that the company was advised by the Government of Guyana to seek new partners (investors). In that light, the company partnered with another state-owned company, Long Jiang Forest Industries Group. “We told the government that the company is awaiting financing for the project… we met with Guyana Forestry Commission (GFC) and Ministry of Natural Resources…explaining our financial plight, they encouraged us to get a new partner inside so as to continue investment in Guyana and try to achieve this project as early as possible.”
It was the company’s first partner Da Xing that secured the partnership with Long Jiang Industries Group, because the company could ill afford to wait for the CDB to approve the loan, given the lengthy process.
“Long Jiang forest is another state- owned forestry commission in China and during the Minister of State’s trip to China, our partner introduced him to Long Jiang…they reached an agreement that the new company is going to help us to continue investing in Guyana and help us to achieve this wood-processing facility project,” explained Wang. Long Jiang Forest Industries Group has also acquired 55 per cent shares in Baishanlin. Minister of State Joseph Harmon who visited that company on March 27 had said that Long Jiang Forest Industries intends to “fully take over the company [Shan Lin] by June, 2016.”
“The Vice-Director of the company, Mr Wong Dong Xu, in the presence of officials of Bai Shan Lin, gave the assurance that the company will be in Guyana by May 2016 to complete due diligence for the takeover,” Harmon said in a statement in April.
The 55 per cent shareholder in Bai Shan Lin had committed to expand on the obligations made by Baishanlin. However, while Long Jiang had agreed to finance the project, “they haven’t done any action.” Wang said in his opinion the Chinese entity is awaiting some documentation and is also checking the state of the country so as to decipher whether it is wise to invest.
“As a state-owned company, they need to go through a lengthy legal procedure…everything passed through the senior persons… The first partner took an entire year before they started. This procedure cannot be done in one or two nights— [and] everything was explained to the GFC and ministry.”
Wang noted that the Chinese government monitors keenly the developments happening in Guyana and noted that last Sunday’s move by the GRA to seize several items from the company’s Coomacka, Region 10 location may have an impact on the entity’s decision. The Trade and Foreign Manager said he understands that the government is out of patience and said they “they are so hurry to see everything achieved and so they want our investment to benefit local citizens to create job opportunities here. On our side, my boss keeps saying we need time, support and patience from the government and people, but the government action releases a bad signal to our China side, this won’t help them it will just make them hesitant.”
Wang said too that there can be no guarantee at the moment, the future of the investment here as Baishanlin is not a one-man show. “The company has shareholders, partners…in the following two weeks our shareholders [along] with the Chinese Government, the commerce department and the CDB will have a meeting to decide if this investment is going to be continued.”
He told the Guyana Chronicle that while General Manager of Baishanlin, Chu Hongbo, has indicated to one media entity that he requests an additional three years to fulfil its agreement, it may not be realistic, given the time that transactions coming out of China take.