For decades, the timber industry has played a pivotal role in the development and economic growth of Sarawak.
Despite growing contributions and importance of other sectors such as oil and gas, construction and various industries, timber remains a key node to the state’s socio-economic growth.
This was affirmed by Second Minister of Resource Planning and Environment Datuk Amar Awang Tengah Ali Hassan who underscored Sarawak’s timber industry contribution of about RM7.5 billion (seven per cent) in export earnings in 2012 – an increase of five per cent over the previous year.
“At the national level, Sarawak’s timber sector accounted for 36 per cent of Malaysia’s total timber export earnings of RM20 billion in 2012.
“The demand for Sarawak timber has been well accepted internationally, having also successfully gained access to many emerging markets in the Middle East, Asia and Africa amidst stiff competition in the global market.
“Today, the industry is capable of producing diversified timber products mainly to cater for the export market, enabling Sarawak to become the biggest producer of tropical plywood in the region,” he said.
Industry update
The Sarawak Timber Association (STA) revealed that as at 2012, the state’s timber trade had received a big boost, totalling RM7,455 million – the highest since 2010.
Plywood timber products constituted the largest amount of exports with 52.6 per cent of the overall total logs and timber exports, followed by logs (24.15 per cent) and sawn timber (10.53 per cent).
STA also reported that Sarawak’s logs and timber products were exported mainly to Japan which recorded 38.27 per cent of the total export, followed by India and Asia (excluding China, Korea, Taiwan and Japan) which imported 15.99 and 10.69 per cent of Sarawak’s logs and timber, respectively.
According to STA, overall logs production totalled 9,458,563 cubic metres in 2012 – a decrease from 9,610,434 cubic metres in 2011.
Meanwhile, the Sarawak Timber Industry Development Corporation (STIDC), in its annual timber statistics report, noted that the timber industry is seeing a positive forward trend.
It explained that the industry had seen an increase in the overall volumes of sawn timber, plywood, veneers, mouldings, dowels, fiberboards, particle boards as well as woodchips.
However, it pointed out that there were decreases in the value of logs (two per cent), laminated board-floorings (2.5 per cent) and blockboards (27 per cent).
“Total export values of plywood, logs and sawn timber were at RM4 billion (54 per cent), RM1.8 billion (24 per cent) and RM758 million (11 per cent) respectively.
“This contributed 88 per cent to the total export value of logs and timber products to the state in 2012.”
However, despite its success, mirrored by the increase in total export earnings, the industry will not be able to sustain itself if it relies solely on slow-growing, depleting traditional, natural timber forests.
As such, the state government has initiated several measures to ensure sustainability of Sarawak’s forestry, including a commercial scale programme for fast-growing planted forests.
Sustaining timber industry
There is no doubt the timber industry is undergoing a transformation process whereby it is expanding into different types of timber rather than relying only on indigenous species.
Pehin Sri Abdul Taib Mahmud, Sarawak’s Chief Minister
Chief Minister Pehin Sri Abdul Taib Mahmud who highlighted this, noted implementation of planted forests will enable timber enterprises to continue thriving despite the state’s deficit in raw materials.
“We have embarked on a planted forest programme which ought to supplement the country’s timber supply. In fact, it ought to double the supply of raw materials for the industry,” he said.
From the planted forests, fast-growing timber species are expected to be harvested with the potential to yield five times as much timber as natural forest-traditional timber forest.
Oscar Johin Ngayop, assistant director of Planted Forest in the Forest Department of Sarawak, in his presentation on ‘Sustaining the future supply of raw material for the development of the timber downstream processing industry in Sarawak’, said uptrend on export earnings of timber and wood-based products was not due to increase in supply from natural forests but production and export of value-added end-products.
“In 1991, Sarawak showed the highest log production at 19 million cubic metres but a decline trend ensued thereafter.
“The downstream processing industry has to diversify and find a new source of raw materials as an alternative to supplement the deficit in timber supply from the natural forests,” he explained.
He pointed out that the government had taken the initiative to embark on commercial-scale forest plantations.
According to Oscar, there are now 43 licensed planted forests throughout the state with a gross area of 2.8 million hectares, out of which only one million hectares are considered as plantable areas.
“The establishment of planted forests is a long-term strategy towards providing a new source of wood materials for the wood-based industries in Sarawak.
“It also acts as a leverage to cope with the increasing demand of raw materials as the industries cannot depend solely on timber from the natural forests,” he stressed in his presentation at an International Timber Conference.
“The planted forests will also help relieve harvesting pressures on the natural forests and, at the same time, increase the state’s forest cover to reduce the greenhouse effect,” he pointed out.
Oscar noted that the planted forests will also help rehabilitate and ameliorate degraded soil areas, caused by abandoned or shifting cultivation.
He said among the main objectives of the planted forests was the production of 15 million cubic metres of timber annually from one million hectares of forest plantation, adding that the planted forests could also cater to the needs of local processing industries and contribute to the socio-economic development of Sarawak.
However, he noted that the planted forests were not without issues and challenges as the development of forest plantations involved huge investments, compounded by the long gestation period.
To tackle this issue, he stressed assistance in the form of incentives was critical and had to be made available.
He observed that the issue of multiple land use was still occurring and had to be addressed to avoid misunderstanding and ensure project implementation did not lag behind.
Research and development as well as collaboration between licensed planted forest holders and the related agencies had to be enhanced to resolve the issue of shortage of high quality planting materials, he added.
As manpower shortage is another issue facing the planted forest industry, Oscar urged the government to help mitigate the situation. Presently, most of the industry’s manpower is sourced from foreign countries.
He cautioned that Sarawak’s topography could also hinder the progress as well as reduce the areas of planted forests.
“Moreover, in some cases, the existing timber licences can affect the rate of planting progress in licensed planted forest areas, especially when the owner of the timber licence is not the holder of the licence for planted forests.”
However, he said, the estimated production of 15 million cubic metres of timber annually was possible with the establishment of one million hectares of planted forests, adding that to achieve this target by 2020, the industry had commit to planting about 90,000 hectares per year.
Meanwhile, Oscar disclosed relevant laws had been implemented to provide a legal framework for establishing, regulating and monitoring the development of planted forests in Sarawak.
“In 1996, the Forest Ordinance was amended under Section 65B for the establishment of planted forests in Sarawak. Under this section, The Forests (Planted Forests) Rules 1997 were enacted under Section 95 (1) (w) and (x) of the Forests Ordinance.”
He said implementation of these laws was ensure the capacity of planted forests to sustain the timber industry.
Regulations to sustain future timber outlook
A major stumbling block within the industry remains the lack of regulations.
Without a legal framework to sustain timber forests and combat illegal logging, Sarawak – as well as Malaysia – could face various social, environmental and economic problems.
Malaysian Timber Certification Council (MTCC) chairman Datuk Dr Freezailah Che Yom said Malaysia was taking steps to develop the
timber legality assurance system to ensure the legality of logs harvested from state’s land forests as well as that of uncertified permanent reserved forests, hence strengthening the country’s sustainable forests management.
“Malaysia is supportive of the European Union’s (EU) initiative to implement the Forest Law Enforcement, Governance and Trade (FLEGT) Action Plan to tackle illegal logging through Voluntary Partnership Agreements (VPAs) and we are currently negotiating with the EU to conclude the FLEGT to ensure all our exported timber products are legal.
“Under the VPAs, Malaysia agrees to implement a
Timber Legality Assurance System (TLAS) to verify that timber products for shipment to EU are legally produced.”
He pointed out that TLAS was based on the definition of legality – which is “timber harvested by a licensee from approved areas and timber products exported in accordance with the laws,regulations and procedures pertaining to forestry, timber industry and trade of Malaysia.”
TLAS development is also based on existing laws and regulations governing forest harvesting, mill processing and trade of timber and the current licensing system on these activities.
According to Dr Freezailah, TLAS comprises six agreed principles and its associated criteria which are formatted into 24 tables to facilitate compliance auditing by third party monitor.
The planning for TLAS implementation will be phased from the planted forests in peninsular Malaysia, Sabah and eventually Sarawak.
“Under the VPA, once the TLAS is fully operational, all timber products exported to the EU will be accompanied by a FLEGT Licence,” he revealed.
This could potentially smoothen international timber trade between Malaysia and European countries as well as create a generic legal system to combat illegal logging, hence sustaining the overall timber industry.
Dr Freezailah said the establishmemt of FLEGT VPA was now in its final stages.
“Pending the conclusion and the signing of VPA, Malaysia had decided to implement the TLAS as MYTLAS, beginning February 1, 2013, purely as its own initiative to meet EU Timber Regulation of Due Diligence for peninsular Malaysia.”
Additionally, to ensure MYTLAS sustainabilty, a Compliance Audit was conducted in March 2013 by an independent third party auditor (SIRIM QAS).
Dr Freezailah said the audit was based on a set of established Checklist and Guidelines developed by another independent consultant.
The outcome of the audit demonstrated a high level of compliance with the criteria in the 24 tables of the TLAS, he added.
However, he noted there were some TLAS criteria/tables which were rated as partial compliances.
Such anomalies, he said, would be discussed by the Implementing Agency Coordination Committee and remedies would be made.
Utilising the planted forest
The Forest Research Institute Malaysia (FRIM) has identified several ways to utilise fast-growing species of timber in planted forests.
Dr Mohd Nor Mohd Yusoff, deputy director general of FRIM noted that wood are greatly used in countless of things which include building contruction, flooring, interior finishing and other uses.
In Malaysia, the wood-based sector is seen as thriving on the back of its export values which is reported to have more than RM20 billion, he pointed out.
Inspite of that, Dr Mohd Nor said, there is a shortage in wood supply driven by competition from other types of downstream products and increasing demands of the wood products.
He pointed out that FRIM had determined several fast growing timber species, several of which are suitable to be planted in Sarawak’s rich tropical forest.
Several species which FRIM had named are Acacia mangium (including Acacia hybrid), Tectona grandis, Khaya ivorensis, Khaya senegalensis, Rubberwood (5 clones), Azadirachta excelsa, Paraserianthesfalcataria, Neolamarckia cadamba and Octomeles sumatrana.
Dr Mohd Nor noted that Octomeles sumatrana and Eucalyptus are fast-growing timber ideal for Sarawak and Sabah planters. He also highlighted that the Acacia mangium has been identied as the most favourable forest species for its fast growth feature.
According to Sarawak Planted Forest Sdn Bhd, Acacia mangium’s growth rate and yield in seven years is 26 cubic metre per hectare, per year. Also, in seven years, the Acacia mangium has a total standing volume of 177.40 cubic metre, per hectare.
Other than sustainable fast growing timber species, Dr Mohd Nor encouraged wood-based industries to look for other alternate raw resources such as agricultural plantations (for example; oil palm biomass, bamboo and rattan).
“High-valued products from more efficient and ecofriendlier processing could lead to industry competitiveness,” he pointed out.
Looking ahead, on the prospects of the timber industry, STIDC said in its annual report, demand for timber and timber products in 2013 is forecast to be as much as it was in 2012.
It noted, “Plywood, logs, sawntimber and veneer are still the main export commodities and made up 92 per cent of the total export volume in 2012.”
The corporation further added, Sarawak’s timber and timber products are still depending on the demand from traditional markets such as India as importer of logs, Japan (plywood), Thailand (sawntimber) and Taiwan (veneer).
“In addition, Middle East countries such as Yemen, Bahrain, Saudi Arabia, and United Arab Emirates (UAE) will certainly drive demand in 2013 for timber product in Sarawak, significantly.”
STIDC said despite the global challenges, there are still positive factors in favour of the industry, now whereby demand is expected to pick up steadily by early next year.