As the Chinese New Year holidays approach the timber industries in Malaysia are beginning to wind down production and prepare for a shut down from the first week in February. Sawmills, especially in Peninsular Malaysia, will shut for an extended break in early February.
Rubberwood furniture maker invests in plantations
The Malaysian Star newspaper reported (22/1/13) Celment Hii, director of the country’s largest rubberwood furniture manufacturer SYF Resources Bhd, as saying the company does not expect to be seriously affected by the current global economic slowdown and the narrowing of profit margins.
Hii said the company has diversified upstream through investment in rubber plantations in order to secure its rubberwood raw material supply.
On a year-on-year basis, SYF’s revenue for the last quarter of 2012 grew from RM42.98mil in 2011 to RM58.07mil last year.
WTK to maintain cap on production until demand improves
The Star newspaper also reported on WTK Holdings Bhd, a major log supplier based in Sibu, Sarawak. WTK produced 441,471 cu.m of logs in 2012 compared to 530,864 cu.m in 2011. WTK produces plywood and other wood products. The company says it will continue to cap production of logs until the demand improves thus continuing the same reduced production policy adopted in early 2012.
The company cited the uncertainty in major markets and resulting reduced consumption as the main reason for the decision to reduce output.
Sabah Forest department considers domestic legality assurance
Despite anticipation of the quiet period in industry over the New Year holidays, the industry in Sabah has been busy working on legality issues.
The companies exporting to Europe are focussed on the impending coming into force of the EUTR. Analysts report that the Sabah Forestry Department is studying how the State should approach development of a Sabah timber legality assurance scheme.
Data on timber exports from Sabah were released recently. Export levels for the period January to November 2012 are shown below, (prices are FOB basis):
Sarawak industries prepare for Australian due diligence
The industry in Sarawak is already experiencing quiet trading as overseas buyers are well aware that production will soon come to a standstill and company offices will close for the New Year holidays.
The Australian market is important for companies in Sarawak and the industry is watching developments in the Australian Illegal Logging Prohibition Act 2012.
Some companies in Sarawak are already preparing to meet the due diligence regulations so as not to disrupt timber exports to Australia.
Malaysian Furniture Fair strengthened by partnership with Muar Furniture Association
In a press release the Malaysian International Furniture Fair (MIFF) announced a strategic alliance with the Muar Furniture Association (MFA), one of the most prominent furniture industry groups in Malaysia.
Beginning in 2013, MFA will participate exclusively in MIFF, Southeast Asia’s annual furniture trade show managed by UBM Asia, setting the stage for the biggest ever MIFF since its inception in 1995.
This is the first ever commitment of its kind by the MFA. Manufacturers in Muar account for 45% of Malaysian furniture exports from a base of about 500 manufacturers, including eight public-listed companies.
The participation of furniture manufacturers from Muar will further strengthen MIFF as the single biggest platform for Malaysian furniture known primarily for hardwood products.
MIFF 2013 will be held from March 5th to 9th 2013 at the Putra World Trade Centre and Matrade Exhibition and Convention Centre in Kuala Lumpur.
Moves to cool real estate market
Over the past two years growth in the real estate sector in Malaysia has been an important market for the timber industries in the country. However, the growth witnessed over the past years is expected to slow in 2013 as the government is determined to cool the sector.
The Malaysian government has introduced a 70 percent Loan-to-Value maximum on loans to those buying a third property and is now basing the loan assessment on net income rather than gross income.
The government is also raising the property capital gains tax. Analysts say that, while these changes will have an impact on new investment in the Malaysia’s property market, long-term investors and people buying homes to occupy rather than for rent will provide a measure of continued growth in the housing market.
Log Export Prices (Sarawak)
|Meranti SQ||US$ 240 – 260 FOB|
|Kapur SQ||US$ 320 – 350 FOB|
|Keruing SQ||US$ 260 – 280 FOB|
|Selangan Batu regular||US$ 320 – 360 FOB|
Export Plywood Prices
|Malaysia ply MR BB/CC, FOB||US$ per m³|
|9mm & up||
In the previous ITTO report (17:1 15th Jan 2013) the statistics on exports of plywood from Sarawak were incorrect. The correct data is: for the period January to November 2012, Sarawak exported 2,402,120 cu.m of plywood, valued at RM 3,634,972,141.