Malaysia's Timber Industry Shifts to Downstream Activities
(C) 2000 Asia Pulse Pte Ltd
September 10, 2000
TOKYO, Sep 11, 2000 (AsiaPulse via COMTEX) -- After years of exploitation and rapidly expanding downstream development, Malaysia's forests have been decimated and the country can no longer be regarded as one with abundant timber resources, shifting the focus to value-added products. Chean Kam Huan, the Malaysian Timber Council (MTC) director of trade promotion and marketing division said that downstream activities have increased the demand for timber for the manufacture of value-added products.
Chean said this at a seminar in conjunction with a three-day Malaysian Economic and Technical Mission to South Korea on Timber and Cocoa, organised by the Ministry of Primary Industries. With strong backing from the country's research and development initiatives, downstream activities have displaced produce and export of primary commodities as Malaysia's point of strength and competitiveness.
Globalisation, which could pose a threat to primary industries when not prepared for, could also be a contributing factor that has prompted downstream activities, he added.
Meanwhile, the strong exports of timber-based downstream products have very much absorbed the once ample supply situation of primary commodities and has now made its turn towards the shortfall zone, he said.
In his presentation at the seminar, "Timber Products from Malaysia," he said that South Korea was a significant market for Malaysia's timber and timber products in the Far Eastern region, with exports peaking at RM938.4 million (US$246.94 million) in 1997.
It declined drastically to RM371.4 million worth in 1998 mainly due to recession brought about by the financial crisis.
Malaysia's timber and timber-based products export to South Korea recovered by 74 percent in 1999 to RM645.8 million with the strongest rebound being in logs and furniture followed by plywood and veneer.
Among the products exported were wood-in-the-rough, wood sawn, or chipped lengthwise: sliced or peeled, veneer sheets and sheets fro plywood, particleboard, fiberboard, densified wood, plywood: veneered panels and similar laminated wood, furniture; office, kitchen and bedroom and furniture parts.
As for Malaysia's timber trade with Japan, he said Japan was Malaysia's major market for its value-added timber products such as furniture and moulding. This accounted for 15 percent and 25 percent of total exports.
Japan is also Malaysia's largest market for logs and plywood, he added.
In 1999, Japan accounted for 25 percent or RM4.29 billion worth of Malaysia's timber exports totaling RM17.1 billion.
Except for 1997 and 1998, total exports of timber and timber products to Japan recorded steady improvements. Against RM3.83 billion in 1995, exports reached RM4.36 billion and RM4.1 billion in 1996 and 1997 respectively wood, furniture exports also recorded significant growth. In 1999, furniture exports reached RM567.3 million versus RM439.2 million in 1995.
On an overall basis, Malaysia's increased exports of timber and timber- based products in 1999 can be regarded as a clear sign of recovery in the industry.
The importance of the timber sector is also reflected by its contribution of 4.5 percent to the country's gross domestic product (GDP) and 6.0 percent to the country's export receipts.
Apart from South Korea and Japan, other major export markets for Malaysia's timber and timber-based products include China, Taiwan, India, Philippines, Singapore, Thailand and the United States. BERNAMA