Hashim (seated centre) and Wong (seated second right) are seen during a photo call for the meeting.
KUCHING: Sarawak Timber Association (STA) plywood members have appealed to the Sarawak government for assistance and support during the challenging times for the industry at present.
In a statement yesterday following a meeting with the Sarawak Timber Industry Development Corporation (STIDC) to discuss critical issues facing the industry, STA said government assistance and support is necessary to achieve a win-win outcome to sustain the well-being of the industry as well as generate a greater stream of revenue for the Sarawak government and its people.
The meeting touched on how the Sarawak government and STA members could best work together to overcome the challenges faced.
The statement said Sarawak’s biggest market for plywood is Japan, but market share has been lost to countries such as Indonesia, Vietnam, and China due to lower prices.
On top of that, production of domestic plywood in Japan is increasing and incentivised by the Japanese government.
“Over the last few years, our plywood production cost has skyrocketed due to the increase in costs for raw materials and labour.
“Log cost has escalated by at least 22 per cent since 2017 because of increase in the Hill Timber Premium from 80 sen per cubic metre to RM50 per cubic metre (hill timber species), Timber Premium (Rehabilitation and Development) from 60 sen per cubic metre to RM5 per cubic metre, glue cost has increased by 12 per cent, and administrative and distribution costs increased by 59 per cent due to significant reduction in production volume.
“Moreover, the minimum wage rate for Sarawak has increased from RM920 to RM1,100 in 2019, and may increase further to RM1,200 in 2020. Effective Jan 1, 2018, the new ruling requires employers to bear the levy for foreign workers at RM1,010 per worker. Previously, the cost was borne by employees themselves. Such a ruling has resulted in the increase in the cost of worker recruitment,” said the statement.
STA also pointed out members were unable to pass on the added costs to their buyers.
“The only option for the industry to survive is to reduce costs. In order to achieve this, support and assistance from the Sarawak government is of paramount importance to restore the competitive edge of the industry,” added the statement.
STIDC general manager Hashim Bojet chaired the meeting, while the STA delegation was led by permanent council member Dato Sri Patrick Wong Haw Yeong.