May 11, 2021
A Guyanese timber exporting company increased exports by 10 percent and increased staff by over 20 percent with Caribbean Export Development Agency’s (CEDA) grant support help.
Andre Cummings, chief executive officer of Cummings Wood Products (CWP), Guyana, said about receiving CEDA’s support, “The Direct Assistance Grant Scheme is absolutely relevant and indispensable for private sector development. Often times than not, most entrepreneurs / business owners in the private sector are cash strapped and are trapped in a cycle of repaying large sums of debt equity from insubstantial turnovers (profits), all in a dire effort to keep their businesses afloat.
“Moreover, most private sector businesses, particularly young start-ups, lack the financial resource to invest in critical capital acquisition, to take their businesses to the next tier of performance. Access to reimbursement funding from the Direct Assistance Scheme serves as a major help to suchlike business owners, and also to other entrepreneurs who would want to access such funding, even as they seek to develop strategic alliances with Caribbean Export to benefit from the other service platforms.”
Through accepting CEDA support through the Direct Assistance Grant Scheme (DAGS), CWP was able to increase production and efficiency by 8 percent and increase staff by 23 percent.
CWP also increased exports by 10 percent and entered into Jamaica for the first time in 2019.
CWP was founded in 2008 by Andre Cummings and is primarily focused on exporting construction timber and decking to the Caribbean. They export a wide range of dressed hardwood lumber species such as Ipe, Purple Heart, Green Heart, Jatoba (Locust) and Wamara among others. CWP experienced constant growth over the years and has expanded their product lines throughout the Caribbean and United States Markets.
In 2014, their sister company “Floor It” was created to focus on manufacturing, installing and finishing exotic kiln dried hardwood flooring.
Their website claims that they have “earned a reputation for premium quality, excellent service and dedication to innovation in the lumber industry in Guyana and rely on our competent work force, state of the art technology and equipment to produce the finest wood products available in Guyana and the Caribbean at large.”
A snapshot of DAGS support is below:
IMMEDIATE IMPACT:
Enhanced Productive Capacity and Efficiency – 7-8%;
Product Development – 4 new products;
Reduced Operational Costs/Wastage – 7-8%;
MID-TERM IMPACT:
Increase in staff – 23% or 10 employees;
Increase in exports – 10% (2019);
Entry into new market – Jamaica.
The acquisition of new technologically advanced production equipment allowed CWP to aggressively pursue value-added development per Guyana’s National Log Export Policy, intended to curb the export of round logs in favour of downstream value-added products. Aggressive product development and innovation was completed to ensure all product dimensions satisfy buyers.
The company expanded product lines include ‘custom-built’ modular kitchen cabinets, standard and customised chest of drawers, framed and panelled doors and end matched flooring. The company also saw significant improvement in productivity performance, cost minimization and production yield output at all cost centres throughout the manufacturing plant.
Production and maintenance downtime, change-over (set-up) loss time, dropped, with better up-time and line availability at the machine lines. Factor and total productivity and surplus production yield performance were consistently achieved monthly at all cost centres, machine lines, and at the plant level. In addition, two members of the management staff benefitted from certified technical training overseas and were instrumental in disseminating formalized in-house training to lower-level staff.
In the medium-term, the production machinery acquired by CWP through the DAGS increased the yield from raw materials by 20 percent. This reduced the demand for the quantity of trees needed and thereby reduced the environmental impact from production. In addition, promotion of lesser-known hardwood species is expected to reduce the likelihood of overharvesting popular species. Wastage from forest produce was also minimised by utilising wood pieces as short as 6 inches.
The new machinery also enhanced productive efficiency and reduced operational costs by 7-8 percent. The approximate increase in export sales induced by the project was 10 percent and the number of staff increased by 23 percent or 10 employees. The company also successfully entered the Jamaican market.
CWP was challenged with high production costs due to the low production capacity of current machinery and low level of recovery from raw materials, which was the core reason why they needed CEDA’s DAGS support. The company also wanted to reduce the environmental impact of its production processes; offer quality products at an affordable price to consumers; create jobs and develop the economies of Guyana’s rural communities.
So in, 2018 CWP received the DAGS funded by the European Union under the 11th EDF Regional Private Sector Development Programme. The funds enabled Cummings Wood Products’ to implement a plan to increase the yield from raw material (hardwood) and lower the company’s production costs, through economies of scale. The project included the acquisition and installation of production machinery to make new hardwood product lines, and transform off-cuts, end trimmings, etc. into saleable hardwood products, to increase the percentage rate of gross timber resource inputted into the production system.