KUCHING: Malaysian enterprises represented by the Global Timber Index (GTI) have reported a shortage of logs suitable for producing face veneer.
They have also listed the limited supply of raw materials and a manpower shortage as among the other challenges they faced in November 2024.
“There was a shortage of plywood demand for export, and at the same time, there was a lack of logs,” said the GTI-Malaysia Report for November 2024.
The monthly report is prepared by the Global Green Supply Chains Initiative (GGSC), with support from the International Tropical Timber Organisation (ITTO) and the Macao Trade & Investment Promotion Institute (IPIM), along with focal points from pilot countries including Indonesia, Malaysia, Thailand, Gabon, the Republic of Congo, Ghana, Brazil, Mexico, and China.
In 2022, these eight pilot countries together produced 289 million cubic metres of logs and sawnwood, accounting for 63.7 per cent of the total quantity produced by the 37 ITTO members.
Malaysian timber enterprises complained about the high costs of raw materials (wood waste) and insufficient demand for wood due to a decrease in orders. They also faced fluctuations in currency exchange rates in their business transactions.
To mitigate these challenges, they suggested that the industry slow down production and retain woodchips for local consumption. They also recommended that the government increase spending on building and infrastructure expansion to raise the consumption of building materials.
In November, the GTI-Malaysia index registered 18.8 per cent, a decrease of 4.0 percentage points from October, remaining below the critical value (50 per cent) for 25 consecutive months. This indicated that the business prosperity of the superior timber enterprises represented by the GTI-Malaysia index shrank compared to October, with the contraction becoming more significant.
“As for the 11 sub-indexes, only the purchase price index was at the critical value of 50 per cent, while the remaining 10 indexes were all below the critical value. Compared to the previous month (October), the index for harvesting increased by 14.3 percentage points; the indexes for production, purchase quantity, inventory of main raw materials, and delivery time were unchanged from the previous month, while the indexes for new orders, export orders, existing orders, inventory of finished products, purchase price, and employees declined by 5.0 to 15.0 percentage points,” said the report.
The report said Sabah is working on turning approximately 400,000 hectares of degraded forests into industrial timber plantations. As of October 2024, a total of 180,901 hectares had been successfully restored and converted. According to the action plan for the plantation, rubber, acacia, batai, laran, and red mahogany (Eucalyptus pellita) would be among the main species to be planted.
In Sarawak, the report quoted Deputy Premier Datuk Amar Awang Tengah Ali Hasan as saying that Sarawak is planning furniture parks in Demak Laut, Kuching, and Tanjung Manis, Mukah Division, to position the state as a competitive furniture production hub.
GTI-Malaysia also reported that the Malaysian Timber Industry Board chairman stated the demand for wood-plastic composite (WPC) materials is growing, with an estimated global market value of US$7.5 billion in 2023.
Malaysia has also begun producing WPC materials made from recycled wood and plastic waste. As this material is waterproof, states like Sarawak, Sabah, and Pahang — which are often affected by floods — are key markets in the country.
