While the timber industry of Peninsular Malaysia looks firmly to the west for its market, the state of Sarawak is focused on the east. Peninsular Malaysia is aiming to develop a furniture and added value market focused on the strong environmental criteria of Europe, while Sarawak targets a timber-hungry east, not so far bothered with certification or environmental credentials. But both say they have one common goal – legally sourced and sustainable timber which will leave a legacy for future generations.

The Malaysian Timber Council (MTC) invited 10 European trade representatives to take part in its annual “familiarisation” programme in July in a bid to underline how the country’s forestry policies and its Malaysian Timber Certification Council (MTCC) programme are up to the mark.

The country is still smarting over NGO allegations that its timber industry participates in illegal logging, and timber industry representatives spelled out in detail the steps that have been taken to ensure that all the processes – from cutting down a tree in the forest to a finished product, be it logs, sawn timber or value added – arrive at their final destination with all the relevant credentials in place.

Haji Len Talif Salleh, general manager of the Sarawak Timber Industry Development Corporation, said: “NGOs don’t have to hide behind trees to spy on us. If there are any weaknesses in our system we will look at how to rectify them. Our chain of custody goes as far as it can. “

Stumbling block

A stumbling block to MTCC achieving NGO sanction is the question of the indigenous Penans. Many have opted to live in settlements, swapping their former lives for one dependent upon the more lucrative tourist industry. However, some are holding out and still live in the forest. Until agreement can be reached and their futures determined, blessing from the Forest Stewardship Council (FSC) and the NGOs could remain elusive.

Addressing the MTC marketing seminar in Kuala Lumpur on behalf of plantation industries and commodities minister Datuk Peter Chin Fah Kui, deputy minister Datuk Hanifah Aman said that, in tandem with the improved global economy, Malaysia’s timber sector could be optimistic.

“Our export is on an upward trend with earnings from timber products in 2003 surpassing that of 2002 at M$15.3bn.”

He said that last year export receipts grew by 6.9% to M$16.3bn. All sectors, bar mouldings, saw better performance. Primary processed timber products including logs, sawn timber, plywood and veneer performed well, with plywood and veneer fetching M$4.4bn and logs and sawn timber contributing M$2.3bn and M$2bn respectively.

The star performer was furniture, with wooden and rattan furniture exports contributing M$4.7bn. MDF and joinery products also improved, with exports of M$978.6m and M$803.7m respectively. The value of mouldings exports dropped by 9% to M$594.4m, accounting for 4% of the country’s total timber exports in 2003.

But Datuk Hanifah warned that while the timber industry had made striking improvements, it should not be complacent. “The challenges ahead are even more daunting,” he said, adding that the increasingly difficult external environment needs to be faced head on.

He said new markets for tropical timber products should be vigorously pursued, stressing the importance of those in central Europe and the Middle East.

The industry also needs to build on its strength in advanced wood manufacturing to produce high quality value added timber products for niche markets, said Datuk Anifah, adding that an initiative backed by MTC, the Malaysian Timber Industry Board and Furniture Research Institute Malaysia to use lesser-known species for the production of laminated scantlings is welcome. The project, financed by a M$5m government grant from the Malaysian Timber Industry Development Fund, is part of the government’s objective to get the industry to move downstream to obtain more value from lesser-known species.

Tropical timber products need to have “green” credentials, said Datuk Anifah, and despite pressures from western environmental activists, Malaysia has been able to develop its industry.

Malaysia still has 62% of its land area under natural forest cover. Of the total forested area, 14.44 million ha are designated as Permanent Forest Reserves and placed under sustainable forest management.

Ramin restrictions

&#8220Countries that have tropical hardwoods have to use it. But what we can ask – or demand – is do it in a sustainable way so that our common target to save the global climate can also be taken into account”

Dr Ludwig Arentz, Department for Environmental and Consumer Protection in Cologne

Exporters wishing to export ramin logs or sawn timber must apply for CITES Certificate of Origin from the Malaysian Timber Industry Board or Sarawak Forestry Department, and Datuk Anifah stressed that the timber industry must respect government policies.

He said the MTCC scheme is gaining recognition in Europe and other countries, with increasing demand for MTCC-certified timber products – especially in the form of plywood and mouldings in the UK. More than 4.1 million ha of forest in Peninsular Malaysia now have MTCC certification, with 45 companies in the state achieving chain of custody certificates. Malaysia intends to switch to FSC standards next year.

Describing the timber products trading environment as “tough”, Datuk Anifah said that to compete with countries such as China, Vietnam and Indonesia, better use must be made of timber resources.

“There should also be more integration of downstream and upstream activities,” he said.

Peninsular Malaysia is looking to a future in the furniture industry, but a study comparing its performance against that in Italy showed serious deficiencies, with a lack on the Malaysian part of “own design” skills.

Datuk Anifah said Malaysia must use the chain of wood suppliers, including temperate and hardwood species as well as veneers, to make the distribution chain efficient.

To combat Peninsular Malaysia’s reduced log supply, the state needs to go into large-scale forest plantation of fast-growing timber species. So far, 270,000ha of forest plantations have been established and an MTC study indicates that a further 2.8 million ha of land is available – 400,000ha in Peninsular, 900,000ha in Sabah and 1.5 million in Sarawak.

Datuk Anifah said the industry could also exploit oil palm biomass to help revive the country’s ailing plywood industry.

It is vital, he said, that Malaysia is flexible to retain its role as a leading tropical producer.

European perspectives

After the familiarisation programme, which included forest and factory visits and presentations from timber industry organisations in Peninsular Malaysia and Sarawak, some of the European delegates felt there were still environmental and forest management issues the Malaysians needed to address. But most were impressed overall with the progress the country is making.

Paul van den Heuvel of the Netherlands Timber Trade Association said: “Illegality as we know it in Europe isn’t really an issue here, and it is not as the NGOs say it is. The focus for illegal timber should be on Indonesia.

“I am confident that what Malaysia says is going to happen with its forest policy plan is going to happen. I will advise our members to ask for sustainably produced timber and keep the demand going. I am sure that MTCC-certified timber is legally produced and can meet the requirements the Netherlands use for sustainable forest management.”

He added: “I hope they reach a situation where the Penans can have a say in what is going on. If a consensus cannot be reached, then a line has to be drawn and that is it.”

Dr Ludwig Arentz, of the Department for Environmental and Consumer Protection in Cologne, said: “My message to my council would be that timber from Peninsular Malaysia is OK, but timber from Sarawak isn’t. Sarawak isn’t interested in certification and the problem of the Penans isn’t really sorted out. I think it is important that MTCC certification gets more acceptance in Europe and America [but] we must realise there is a difference between Peninsular Malaysia and Sarawak.”

“Countries that have tropical hardwoods have to use it,” he concluded. “But what we can ask – or demand – is do it in a sustainable way so that our common target to save the global climate can also be taken into account.”