Profits at Malaysian timber firm WTK Holdings Bhd are expected to grow this year due to continued demand for wood products in Japan and the securing of additional logging rights.
Analysts believe the rights to log an extra 31,882ha of forest, granted by the Sarawak Timber Industry Development Corporation, could boost the company’s log production capacity by 13,125m3 per year.
WTK’s plywood capacity is also planned to grow by 45,000m3 to 230,000m3 this year. But analysts believe timber prices will increase by only 1%.
The company recorded after-tax profits of M$88.5m in 2004 – about 10% below analysts’ estimates.
An 8.5% drop in WTK’s plywood prices during the fourth quarter was blamed on slower demand for timber products in Japan and North-east Asia due to seasonal reasons and a reduction in working days for non-timber segments.
