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Business News of Wednesday, 6 February 2013

Source: B&FT

Small-scale timber operators call for Gov’t support

Small-scale timber companies are calling on government to provide them assistance to boost their financial capital and help give a face-lift to the industry. They claim to be in dire need of financial support for importing heavy-powered machines meant for processing wood into finished products -- including doors, knockdown furniture, plywood and T&G.

Information gathered by B&FT indicates that most small-scale timber companies are currently into logs and lumber exporting under the pretext of not having support to process timber locally, thus their involvement in the export activities to survive.

Sources say at peak periods a small-scale timber company is able to export about 25 containers of logs within a month. This sees the sector increasingly becoming another “gold mine” for some Indians and Chinese who buy from Ghana.

Mr. Ritesh Natii, an Indian timber buyer who reluctantly spoke to B&FT said that he is doing a legitimate business. “I buy the timber from Ghanaians, and I strongly believe it is a way of sustaining their source of livelihood” he said.

Against the backdrop that government over the years has been making attempts at finding solutions to the deficit in supplying timber to meet growing demand in the country, others are “recklessly” exporting timber to countries like India, China, Germany and USA.

Tree species such as teak and rosewood (a new tree species) are under serious exploitation for export, regardless of the inadequate timber supply in the country.

In October last year, Mr. Mike Hammah, the immediate past-Minister for Lands and Natural Resources, during the Environmental and Natural Resources Summit held in Sunyani announced that government was making frantic efforts to import timber from Cameroun.

He emphasised that the Ministry is exploring possibilities of importing logs and lumber to supplement the supply-demand gap. In this regard, he led a team to Cameroun during the first quarter of last year and significant progress had been made in this direction. Currently, a Memorandum of Understanding (MOU) between the two countries has been finalised and is awaiting a response from the government of Cameroun.

Mr. Kofi Vinyo, the CEO of a small-scale timber company -- Kofi Vinyo Limited at Kwatrie in the Sunyani West District of Brong Ahafo -- in an interview said until government puts in place the necessary structures and mechanisms to streamline the timber industry, it will be very difficult for Ghana to change its vulnerability status in that sector -- adding that doing business in the present-day of the timber industry is really frustrating.

“Small-scale timber companies do not have the financial capacity to import the needed machines for local wood processing. Neither do we have the collateral to merit millions of dollars bank loans, thus limiting us to selling raw cuts to foreigners” he complained.

He also mentioned what he termed “snail-pace” operations of the Forestry Commission as another challenge retarding activities in the timber industry. According to him, it takes a year or two for the Forestry Commission to give the green light for harvesting a forest or plantation concession, adding that this situation is taking a toll on small-scale timber companies.

This, he says, gives illegal operators an undue advantage to exploit the forest and plantations, as the hands of small-scale timber companies are tied by the Forestry Commission.

Meanwhile, Mr. Thomas Okyere, the Brong Ahafo Regional Manager of the Forest Service Division of the Forestry Commission, has strongly refuted the claims of Mr. Vinyo, saying: “We only prevent them from circumventing the laws governing the sector.”

Mr. Vinyo therefore made a passionate appeal for government to provide small-scale timber companies with financial support to enhance their businesses so that they can contribute their quota to national development. He pointed out that other options like accessing credit from commercial banks are not easy to come by, hence their appeal for government to give them a helping hand.

He added that they contribute significantly to national development; saying in the midst of all the challenges, they offer employment to a lot of people and can do better with government’s support to process timber locally.

This, he said, would help reduce the unemployment problem by engaging many people as well as expanding the country’s economy with large-scale timber processing.

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