Panama company takes over Burma rice mill
By Nigel Williams
April 22, 2004
A Panama-based company, Interbahia Investment, has been granted the lease to operate the government-owned, MARDS Rice-Milling Complex at Burma, Mahai-cony.
The company took over operations from Pandora Rice Inc. after that firm had been deemed not to have performed satisfactorily during its one-year lease.
Stabroek News was told many months ago that the government had no intention of renewing Pandora's lease even though the firm had re-tendered to run the mill. The lease expired some time in February.
According to a source close to the Ministry of Agriculture, it was the view of many that the company had performed badly given its severe indebtedness to farmers. The farmers have taken legal action against Pandora but up to now some of them have still not been paid.
Interbahia has begun operations and so far some 100,000 bags of paddy has been supplied to the mill. Farmers who supplied paddy in small quantities have already received their payments while larger suppliers were given 50% of their payment during the period of sale and have been promised the remainder in four weeks.
According to reports, the firm is currently paying farmers some $1300 per bag of paddy for this crop which is said to be the highest across the country. It has also invested $10M in replacing and repairing equipment.
The final deal for the lease will be signed some time next week when the directors of the firm arrive in the country. They will also decide on the period for the lease and other terms. A source close to the GRDB told this newspaper that the government intends to extend the lease beyond one year and once the company adheres to the conditions it could be at the mill for a very long time.
But the source indicated that the contract includes stiff benchmarks and regulations. Stabroek News understands that it provides safeguards for farmers and would see them receiving their payments promptly and within specified periods.
Among other things, Interbahia has to make a security deposit and strictly adhere to the Guyana Rice Factory and the Guyana Rice Development Board Acts and would be monitored by persons close to the GRDB. Stabroek News was told that the investor has to submit an investment plan.
The mill is initially being leased for $1.7M per month which has to be paid in advance and after six months this will increase to over $2M per month.
Asked about Interbahia's track record, the source said the firm has another operation in Haiti and also purchases paddy from small millers and farmers in Guyana. Stabroek News understands that the foreign company also has good relations with other Guyanese firms who they did business with it in the past.
The source said government had confidence in Interbahia and would take whatever steps necessary to ensure that farmers get good deals and share in the benefits of the industry.
"Government has and will continue to pay close attention to the industry. We would like the buyers/millers to take into consideration the circumstances of the farmers and give them what is due to them."
The source noted that even while the GRDB and the Rice Producers Association were doing their best to safeguard all the players' interests in the industry, some millers were very delinquent and continued to take advantage of farmers.
Contacted on the matter, Marketing Manager of GRDB, Nigel Dharamlall said the industry has received a further boost with the granting of the lease to the Pana-manian firm. Dharamlall said they were hard pressed to maximise their exports. While exporters have not been able to expand their traditional markets, they have managed to gain new ground in Haiti, Brazil, Suriname and French Guiana.
He noted also that for this crop prices have increased because of higher demand for rice in some areas while one major supplier on the international market, Argentina, has been beset by difficulties that are preventing it from exporting.