New timber hub to open opportunities for furniture makers

Instead of dozens of small furniture manufacturers each trying to produce everything from tables to kitchen cabinets, a proposed Integrated Timber Trade and Manufacturing will soon push companies to focus on a single product while sharing expensive equipment and production facilities. This concept is being proposed by the Guyana Manufacturing and Services Association (GMSA), the Association’s President Rafeek Khan said on Wednesday. He told the News Room that support comes from the European Union’s Forest Governance and Value Chains (FGVC) Programme. It moves away from multiple companies building the same items and instead encourages businesses to specialise while sharing common infrastructure. “If you’re making tables and chairs, one company could specialise in just making chairs. Another could specialise in making kitchen cabinets but cabinets have many parts and components…we need to have government facilitating lower cost of infrastructure set up,” Khan said. The proposed hub seeks to close that gap by reducing operating costs for manufacturers while helping them increase production volumes and compete with imported products, reducing duplication. By 2028, this new way of producing locally made furniture is expected to be formed. President of the GMSA, Rafeek Khan. The first phase of the project is expected to focus on approximately 10 experienced manufacturers rather than start-up businesses. “We’re not looking for new startup companies. A cluster are experienced companies who need to accelerate production and move into exports,” he said. The proposal estimates the pilot phase will require approximately US$5 million in investment through a blended financing model involving government, private investors and support from the European Union. “The demand is so huge, you might think that five million is a lot, it’s not a lot with the demand that we have,” he said. Government has already allocated the land for the project, while the EU is expected to support technical studies, planning and selected infrastructure at the Linden Highway, where two interconnected operations- a Consolidated Timber Yard under the Guyana Forestry Commission and a Manufacturing and Value Addition Hub – will be established. Khan also explained that there are many moving parts for furniture making and the shared production space through a commercially operated industrial hub is more cost effective. Khan said Guyana’s Value-Added Tax (VAT) on several locally produced goods advocated for by the GMSA was reduced to 0% following amendments to the VAT Act. This is one way that the government is paving the way for businesses to benefit.