Barima Wood-Work

Ltd.

Business and Management

Environment (3205)

Sabita Rampertab :1027771 (#4,6)

Renita Bentick :1008900 (#1,3)
Ashley Cameron :1002256 (#6,7)
Imran Boodram :1028774 (#2,5)
Andrew Horatio :1006030 (#5,8)

UNIVERSITY OF GUYANA
INTRODUCTION TO BARIMA WOOD-WORKS LTD.
In our first assignment, we looked at Barima_Waini Region No.1 and realized that while this
region is blessed with a vast amount of natural resources, economically there are many
challenges. In analyzing the various economic sectors, we recognized that there is some amount
of stagnation as residents have not been able to capitalize on the many opportunities that exist.
Such as the creation of sustainable businesses in tourism, forestry and mining. While the
Region is now placing emphasis on tourism the other sectors are dominated mainly by
companies outside of the region such as Barama Company Ltd and Strata Mining.

Barima Waini being nested way in the interior of Guyana makes it accessible mainly by air and
water; the limited access has not afforded the region equal opportunity to benefit economically
as many other regions or the coastland. Critically is the educational level of residents, both
technical and vocational, an issue raised in our last assignment which we hope to address by
establishing our business in the region. The Educational Level of this region is recorded as way
below average and ranks the lowest in Guyana. According to the Unicef 2017 Report there is
a significantly low literacy rate of the young people in this Region (Transition rate from
primary to secondary is 29.9 percent. Just about a third of in school children are transitioning)
((UNICEF), 2017). Such an educational dilemma lends heavily to the Region’s mainly
unskilled workforce who are mostly labourers in the mining and forestry sector and farmers.
One can therefore conclude that the lack of proper education, both at the written and skills
level, is a major stumbling block to the development of this region. Therefore, addressing this
issue is essential for the residents as it would increase their bargaining power for fair wages,
allow them to be marketable in other regions and further afield and have a stable income,
allowing their children to remain in school.

Given the vast natural resources available in the forestry sector and the dire need for
enhancement of skills of residents in this Region, have influenced the establishment of our
business Barima Wood-Works Ltd. which will focus mainly on value-added products. This
will entail setting up a state of the art woodworking factory, hiring and training of staff and
selling our products locally and internationally. The aim of this business is not only to make a
profit but to offer additional employment and pertinent skills training to enhance the lives of
the many high school dropouts in the Region.

Residents will be trained in techniques of woodworks, timber grading and ability to identify
lesser-known species of wood, in keeping with the International Organization for
Standardization, (ISO) standards. We will be partnering with Guyana Forestry Commission for
specialized skills training for staff and hope to in the future facilitate a trade school in
association with the Government of Guyana.
BARIMA WOOD-WORK Ltd ORGANIZATION STRUCTURE AND
MANAGEMENT

The success of ‘Barima Wood-Works Ltd’ depends on the experience and competence of the
partners involved. Since there are various specialties within our partnership, our business will
take the form of a Functional Organization, in this the work will be divided according to
specified functions. Some of the advantages we will benefit from are:
1. Benefit of specialization 2. Reducing workload 3. Efficiency 4. Adequate supervision
5. Mass production
The functional structure helps organizations run their business and earn a profit by grouping
employees based on their skills and expertise. It provides a clear hierarchy and it is an efficient
way to run a business. When employees who have similar skills and experiences are grouped
together, it makes production more efficient and of a higher quality. This streamlines
communication and reduces confusion among employees. Employees can feel confident about
what they are doing because it is standardized. They are more likely to feel loyalty to their
department and the organization as a whole.
The structure and Management of our organization will be key to operating a successful and
orderly business. Each person in the company must know his role within the organization and
must be cognizant of the chain of command. An organization chart will show the chain of
command of the company and the proper flow of responsibility from the top of the organization
to the bottom is essential for the company to run in an efficient manner and it includes: Chief
Executive – Overall business performance, Operation – Registration, permits, Shaping,
Molding, Technical – Timber specification, machine operation, design, Finance – Financial
information, high-level growth plans
The management of Barima Wood-Works Ltd will be guided by the roles and activities in the
following categories:
1. Informational – seek and receive information, scan periodicals and reports, maintain
personal contacts.
2. Interpersonal – maintain information links both inside and outside the organization,
use email, phone calls, and meetings.
3. Decisional – Initiate improvement projects, identify new ideas, delegate idea
responsibility to others.
EXTERNAL ENVIRONMENT THAT WILL HAVE A SIGNIFICANT IMPACT ON
BARIMA WOOD-WORK Ltd

Aspects of the external environment that will have a significant impact on the business:

The external environment are the factors outside of the business that has the ability to affect its
internal operations and of course its bottom line, profitability. These factors can be fitted into
two categories; the general environment and the task environment.

The general environment are the external factors that affects the organization directly and those
factors that can affect Barima Wood-Works Ltd. are:

1. Technology – Keeping abreast with changing technology would affect production and
productivity. This may be in the form of machinery and equipment that will make the tasks
easier and reduce the loss of raw material. Inadequate finances and technical knowhow may
affect the company’s ability to source and implement up to date technology.
2. Natural Elements – With the business’s primary source of raw materials being lumber for
which sustainable harvesting is required, may put the supplies at risk where forest
degradation occurs or reforestation is a priority. Adverse weather conditions may also affect
supplies as trails and the forest can become inaccessible. These can result in a reduction of
supply or an increase in price.
3. Social Culture- According to UNICEF 2017 report on the Barima Waini Region 1 there is
a culture of social alcohol drinking; this can affect the availability of raw materials and
labour since one's ability to work can be affected due to this issue.
4. Economics – According to the Guyana Forestry Commission demand and supply related
issues will impact the industry economically. Some of these issues are the ability to promote
wood locally as a suitable, low-carbon, building material, marketing of Guyana’s forest
products, delivery, and quality of products. Also, Region 1 is not economically sound and
sales directly in the region is unlikely. It therefore means all products will have to be
exported out of the region either to other regions or internationally which will increase cost.
5. Legal/Political- There are strict laws and rules governing the forestry sector which
can change as the sector evolves. Our company can be affected if errant saw millers
harvest logs contrary to the required standards.
6. International- There are international standards governing the sustainable harvesting of
lumber that companies must be in compliance with if they wish to export to certain overseas
markets. These standards also govern value-added products. It is therefore important that
the business ensure that Raw Materials is always sourced from compliant businesses.
Task Environment – This consists of those external factors in the environment that directly
affect the completion of task such as those listed below:

1. Customers – Being a new entrant into the market will not afford the business foreknowledge
of customers’ preference or a clientele. Heavy marketing or strategic partnerships is
therefore necessary. International standards will also affect demand as those standards
govern imports into certain countries. Demand will determine volume of production and
profitability.
2. Labour - Ability to find skilled labour in the region may be limited even though there is a
sufficient labour force.
3. Suppliers – The area is considered the beginning of Guyana’s forest so supplies would be
readily available. There are several logging companies and chain saw operators in the area.
4. Competition – There are no barriers to entry into the market in the area and therefore there
is the likelihood of direct competition. This can affect sales and staffing issues. There are
also several established woodworking businesses in other regions who may already have
first mover advantage. To mitigate this the key is marketing and providing superior quality
products.

BARIMA WOOD-WORK LTD. ORGANIZATION CULTURE

The organization culture chosen for Barima Wood-Works Ltd. is the involvement culture, this
culture emphasizes an internal focus on the involvement and participation of employees. We
believe that to retain our employees it is best to have them share their innovative ideas with
management. We would like our employees to feel that their voices can be heard and that they
aren’t silenced under layers of management. Barima Wood-Work Ltd believes that this level
of freedom and empowerment creates confident employees and will improve morale within the
business

Barima Wood-works would also like to create a caring family-like environment where
employees need is highly valued, we would like to demonstrate to our employees that we care
by providing them with perks and benefits such as free medical care, risk allowances, health/life
insurance, free meals, paid vacation leaves, free training and educational advancement and
much more. This will boost the loyalty and dedication of our Team.

STRATEGIES FOR TAKING BARIMA WOOD-WORK REGIONAL

As it relates to one of our major goals, Barima Wood-Works Ltd. will be aiming to go Regional
as more discretionary income will be available and such markets may have more interest in the
products. Having all certification, insurance, business registration and taxes up to date there
are various strategies that will allow for the business to enter a foreign market, the partners
have decided to work with two strategies: 1. Exporting, 2. Joint venture, but first carrying out
a PESTEL analysis: Political - determines the extent to which government and government
policy may impact on an organization, Economic - factors impact on the economy and its
performance, Social - factors focus on the social environment and identify emerging trends,
Technological - factors consider the rate of technological innovation and development that
could affect a market, Environment - factors relate to the influence of the surrounding
environment and the impact of ecological aspects, Legal - An organization must understand
what is legal and allowed within the territories in which they operate.
• Exporting - An entry strategy in which the organization maintains its production
facilities within its home country and transfers its products for sale in foreign countries.
• Joint venture – A variation of direct investment in which an organization shares costs
and risks with another firm to build a manufacturing facility, develop new products, or
set up a sales and distribution network
The establishment of CARICOM on 4th July 1973 paved the way for regional business
development and for twenty (20) different countries to experience an easier way to transact
business. With several integration initiatives set up over the years to assist with the process.
Barima Wood-Works will be partnering with the Ministry of Foreign Affairs to get the full
benefits of CSME - The CARICOM Single Market and Economy. The CSME is an essential
element of integration in the Caribbean Community (CARICOM). It is intended to benefit the
people of the region by providing more and better opportunities for employment, to produce
and sell our goods and services and to attract investment. It is aimed at creating one large
market among the participating CSME Member States.

We will also be taking full advantage of the access to CDF – Caribbean Development Fund
2009, our business will have the support it needs to fully integrate and provide support
regionally, also pertinent to us expanding our business regionally is our strategic relationship
with the business arm of the Guyana Forestry Commission and Go-Invest Guyana Ltd. who
would match buyers and sellers in the industry.

STRATEGIC GOALS FOR BARIMA WOOD-WORK

Mission

Our mission is to establish a world-class woodworking shop that will produce wooden related
products from the finest of woods. A company whose products will not only be retailed all
across Guyana, but also be exported to other countries of the world.

Our vision is to become the leading brand in the woodworking industry in the whole of Barima
Waini.

Our aim to make a profit but to offer additional employment and pertinent skills training to
enhance the lives of the many high school dropouts in the Region.
Barima Wood-works Ltd. Strategic goals include:

• Acquiring modern technologies/tools to make staff more effective and increase overall
productivity

• Investing in technical and vocation training for staff so that they can boost their
efficiency and create a rich learning environment for all employees

• Partnering with the government to establish a trade school in the region to offer
additional training in the woodwork industry

• Expanding operation regionally to increase profitability

• Preserve a positive organizational culture by implementing innovative solutions for

challenges elevated

• Employing advanced equipment, mechanical parts, and machinery to reduce operation

costs and improve job satisfaction

• Increase productivity by operating the business in a sustainable way by reducing waste

and lowering overhead cost to ensure the business break even within the first two years
of operation

S.W.O.T. ANALYSIS OF BARIMA WOOD-WORK

Strength:
● Our core strength lies in the quality of the products.
● Highly trained and experienced wood carvers and carpenters that can produce durable
wooden products made from strong, sturdy, and versatile wood including Greenheart,
Purpleheart, Black Kakaralli and Silverballi, species that are readily available.
● We are well positioned in the heart of Barima-Waini. Where local labour is cheaper.
● Raw material is readily available.
Weakness:
● Lack of finances to enable the company to effectively compete with the competition in
and out of Guyana.
● The lack of skilled labourers in the region will attract High training costs.
● Poor Infrastructure.
Opportunities:
● Create employment for the residents
● To showcase Guyana’s wood species,
● Training residents to build capacity.
● To showcase Guyana as a tourist destination by promoting the region.
Threat:
● Competition from within and outside of Guyana; other woodworking establishments
and wood products imported from entities such as Ashley’s Furniture Store.
● The slowdown of the construction industry and the increase in use of concrete
substitutes for spindles and moldings will remain an ongoing threat for the business.
● The arrival of a new woodworking company in the same location where ours is located.
● Implementation of unfavourable government policies governing the environment and
forestry to regulate forestry operations (National Development Strategy, 1996). 1
STRATEGIES FOR FINANCING BARIMA WOOD-WORKS LTD.

The partners of the Barima Wood-Works Ltd. intend to finance their business in a number of
ways, through the start-up, development and growth of the business. The first stage of this
process is known as passing through the Valley of Death.

The valley of death consists of the numerous stages which all businesses go through, and at
each stage financing is needed in order for the business to survive.

1. Research

Pre-Seed - funds for this phase will be used for;

Feasibility study, Licensing and Registration fees, surveying proposed building site and
Drafting of a Business Plan.
The partners of the Barima Wood-works Ltd. will use their personal savings to cover the
financial requirements for this phase of the business.
The advantage of using savings is that funds will be readily available.
However, on the flip side money available is not always sufficient.
2. Commercialization

Seed Funding - at this stage of the business funds will be needed for the following:

Build the factory, buy machinery and the materials needed to start production, Start the
production process and Marketing the products.
Financing to do the above will be raised from Family and Friends as well as a loan from the
Small Business Bureau of Guyana.

Advantage of family and friends financing - is that there will be a low interest charged.
Disadvantage of this - is that it can cause arguments between friends and family.

1
Environmental policies that may work in favour of forest conservation such as encouraging the use of sawmill
waste for energy, by implementing NFAP project # 34 as a pilot project and sharing the results with the private
sector, designating approved sites for waste disposal at camp sites, prohibiting the dumping of camp waste in
waterways. May also pose a threat for businesses such as ours (National Development Strategy, 1996). These
policies are guidelines set and approved by the EPA for sustainable harvesting.
Advantage of taking a loan from the Small Business Bureau of Guyana - the interest rates are
lower than those of Commercial Banks. Funding up to $30M is accessible.
Disadvantage of this form of funding - is that it is time consuming due to the amount of
paperwork needed to get the loan.
3. Early Stage Funding

As the Business begin to operate successfully it would be advisable for the partners to scale up
operations. They can do this by using one or more of the suggested methods listed below;

Investing in more machinery, Employing more staff, and Expansion

Funding for this phase will most likely be obtained from Commercial Banks.
Advantages of Bank loans - the company can get the additional funds needed and the repayment
period and amount will be fixed over an established period, while establishing a solid
relationship with their Bankers.

The business should be cognisant, that interest rates charged by Commercial Banks are usually
high.

4. Growth Funding
As the business continues to grow, and become operationally profitable, the partners in keeping
with their strategic plan, will venture into international markets. Much Funding is needed at
this stage to facilitate the expansion. Further financing from a commercial bank is one option
to facilitate increase production and all costs associated with exports into the overseas market.
The other option is tapping in to an already established market by one of the following ways:
Merge our business operations with that of an international company or Acquire the operations
of an international company.
The Business can also consider an initial public offering (IPO) for funding if the likelihood of
merger and acquisition becomes possible.
Advantage of IPO - The company gets access to investment from a wide range of investors
to raise capital.
Disadvantage – They are more stringent guidelines to follow as it pertains to financial
reporting.
REFERENCES

1. Hayes, A. (1999). Investopedia. Retrieved June 6, 2020, from

www.investopedia.com/terms/i/ipo.asp

2. Bitesize. (c2020). BBC. Retrieved 6 June, 2020, from

www.bbc.co.uk/bitesize/guides/zj7yy9q/revision/2

3. Nds secretariat . (1997). National Development Strategy. Retrieved 6 June, 2020,

from http://www.guyana.org/NDS/NDS.htm

4. Mintzburg, H. The Nature of Managerial Work,( New York: Harper & Row, 1973)
pp. 92-93

5. Minztburg, H. ‘Manageril Work: Analysis from Observation’ Management Science

18 (1971) B97-B110

6. Revised national forestry policy. (2018). Guyana Forestry Commission. Retrieved 01

June, 2020, from https://forestry.gov.gy/wp-content/uploads/2018/06/Guyana-National-
Forest-Policy-Statement-2018.pdf

7. Annual Report 2017 UNICEF Retrieved on June 12, 2020, from

https://www.unicef.org/reports/unicef-annual-report-2017