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Editorial Measures to Help the Timber Industry Amid the Prolonged Global Economic Uncertainty Fe ature Guangdong Academy of Forestry Visited STIDC
PUSAKA SARAWAK TIMBER INDUSTRY DEVELOPMENT CORPORATION (STIDC) Wisma Sumber Alam, Jalan Stadium, Petra Jaya, 93050 Kuching, P.O.Box 194, 93702 Kuching, Sarawak, M alaysia. Tel: 6082-443477 Fax: 6082-442691 E-mail:
[email protected] Website: w w w.sarawaktimber.org.my
Editorial Committee ADVISOR Datu Haji Len Talif Salleh General M anager
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STIDC Participated in SMIDEX
CHIEF EDITOR Tuan Haji Hashim Haji Bojet Deputy General M anager MEMBERS Dayang Nena A bang Bruce Senior Assistant General M anager (Trade Development)
Highlight Seminar on Viability Assessment of Indigenous Tree Species and Propagation Techniques for Planted Forest Development in Sarawak
Haluyah A wi Acting Senior Assistant General M anager (A dministration) Catherine Sng Bee Seio Assistant General M anager (Finance & Investment) Edmund Daging M angku Assistant General M anager (Resource Development)
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Current Issue 53rd IWPA Convention
Tagat Jimbat Assistant General M anager (Domestic Trade) M ohd. Hinri A bdullah Assistant General M anager (Preventive & Enforcement)
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M arket Re port Market Performance (January-June 2009)
Suraya M ohamad Ali Senior M anager (Registration & Licensing)
Tra d e Statistics, Sarawa k Trade Statistics (January-June 2009 / January-June 2008)
Nicholas A ndre w Lissem Acting Senior M anager (Industrial Planning)
PERKASA bi-m o n t hly n e wsle t t er is p u blish e d by Sara w ak Tim b er Industry Development Corporation (STIDC). All rights reserved. No part o f this publication may be reproduced in any f orm without prior consent of the Publisher. The title “PERK ASA ”, its logo and contents remain the property of the Publisher. O pinions expressed by advertisers are not necessarily of the Publisher or Editor.
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Hajjah Eda Haji Edan Publications M anager WRITER Norman Botes Noma CONTRIBUTOR Ermi Fariza Rambli
SARAWAK TIMBER INDUSTRY DEVELOPMENT CORPORATION (STIDC)
Editorial Measures to help the timber industry amid the prolonged global economic uncertainty.
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he prolonged global economic uncertainty continuous to pose adverse impacts on business sectors including the timber industry. In Sarawak, the timber export declined by 26% in the first half of 2009. Meanwhile, the export value dropped by 29% from RM3.9 billion in the first half of 2008 to RM2.8 billion this year. The decline was due to lower demands from Sarawak’s traditional and main markets such as Japan, China, India, the Middle East, the USA and Europe. The State Government and STIDC are concerned on the plight of the industry and are taking both short term and long term measures in helping this sector going through the tough time. Among the short term measures taken was the reduction of royalty rate from RM65 per cubic meter to RM50 per cubic meter effective 1st January until 31st December 2009. The implementation and compliance of log ratio quota was also relaxed from January-June 2009 alongside the extension of royalty payment from two weeks to three months to meet the current market situation. It is also hoped that the federal government’s economic stimulus packages would give positive impacts to the industry. On long term measures, the government will further develop and strengthen the markets for timber and timber products through trade missions, visits and exhibitions in consuming countries. Despite the soaring global economy this is also the best time to build own brand as others are taking a step backward. Good strategies, creativity, brand innovation and technology are among the ways forward for resilience.
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GUANGDONG ACADEMY OF FORESTRY VISITED STIDC Regular visits between China and Sarawak contribute mutual benefits to both parties in terms of business opportunities.
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hina remains one of Sarawak’s traditional trading partners for timber and timber products since 1970s. Regular visits between China and Sarawak contribute mutual benefits to both parties in terms of business opportunities particularly for the said commodities. 12th June 2009 saw the visit by Guangdong Academy of Forestry to STIDC aimed at acquiring better understanding on Sarawak’s forestry and timber sectors. The five-member delegation was led by the Deputy Director General of Forestry Administration, Guangdong Province, Mr. Chen Jun Qiu. The delegates were briefed on Sarawak’s forestry sector and the current status of Sarawak’s timber industry by Forest Department, Sarawak and STIDC respectively.
Meanwhile, Prof. Zhang briefed STIDC on the background and functions of the Academy with emphasis on R&D. According to him, the Academy is currently undertaking 12 R&D programmes on Woody Flower and Bamboo, Native Broadleaved Trees, Exotic Pine, A l b i zz ia, Forest Ecological Environment Monitoring, Forest Ecological and Public Benefits, Sustainable Control of Pine Wood Nematode, Forest Bio-pesticide, Insect Natural Enemies, Forest Fire Prevention and Forest Product Chemical Industry, Wood Protection, and Biotechnology. Several points of mutual interest were raised by both parties during question and answer session such as collaboration opportunities particularly in furniture trade as well as in forestry sector. Both parties
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The visit marked a new milestone between China and Sarawak to collaborate in areas of mutual interest. China, known for its advancement particularly in planted forests provides opportunities for the local industry players to learn. It is hoped that the meeting between China and Sarawak would continue to ensure knowledge sharing and technology transfer. - Datu Haji Len Deputy Permanent Secretary of Ministry of Planning and Resource Management, Sarawak and STIDC General Manager
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recognized the essence of leveraging the forestry and timber sectors through collaborative efforts which could lead to knowledge sharing and technology transfer. Fast propagation by tissue culture and forest fire prevention were also among the areas of interest identified. In 2008, Sarawak earned RM4.4 million from the export of timber and timber products to China, representing 6% of the overall export revenue earned from the said commodities. At the same time Sarawak imported RM9 million worth of wooden furniture from China. Centre for International Studies, Malaysia forecasted 7% consumption growth for furniture in China this year. Thus, China is having great potential to become a future market for Sarawak’s furniture Though the furniture sector is still in its development stage in Sarawak, it has the potential to become one of the key players particularly in terms of garden furniture. This is because the state is rich in forest resources and aesthetic local motifs and designs which could add value to furniture. Furniture vendors as well as the local industry players should take these opportunities to bring this industry into greater height and compete in the open market.
SUMMARY
Datu Haji Len (middle) together with the delegates at the timber museum. Also seen is STIDC Senior Assistant General Manager (Trade Development), Mdm. Dayang Nena (3rd. right). 4
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■ Both China and Sarawak recognized the importance of collaboration in leveraging the forestry and timber sectors for mutual benefits. ■ China is having great potential to become a future market for Sarawak’s furniture. ■ Sarawak has the potential to become one of the key players particularly in terms of garden furniture.
SARAWAK TIMBER INDUSTRY DEVELOPMENT CORPORATION (STIDC)
STIDC PARTICIPATED IN SMIDEX The show served as a platform to promote the local products including timber products to the national and international markets.
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ver the years, STIDC and its furniture vendors participate actively in SMIDEC Annual Showcase (SMIDEX). This year, not only did it participate in the show but was also tasked by the Ministry of Industrial Development (MID), Sarawak to design and construct the Sarawak Pavilion to house the 13 participants from the state. The show took place on 3rd – 5th June 2009 at Kuala Lumpur Convention Centre.
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It is hoped that the furniture vendors and local industry players would continue to participate actively in this event in future in order to remain competitive both locally and internationally. Emphasis could be placed on garden furniture to create niche market taking advantage of the abundant forest resources in the state. - Datu Haji Len Deputy Permanent Secretary of Ministry of Planning and Resource Management, Sarawak and STIDC General Manager
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Its efforts in undertaking this task paid off as Sarawak Pavilion was selected the best booth under the Government Agency Category. The pavilion adopted the “1Sarawak” concept. The State Government, Sarawak through MID uses SMIDEX as a platform to promote the local goods including the timber products to the national and international markets. MID is the State Government agency responsible to co-ordinate the participation of the Small and Medium Entrepreneurs (SMEs) in Sarawak in this show. Aside from timber products, Sarawak Pavilion also exhibited the local delicacies, handicrafts as well as herbal products. Among the distinguished visitors to the pavilion was the Deputy Prime Minister, Malaysia, The Honourable Tan Sri Muhyiddin Yassin. SMIDEX is an annual event organized by Small and Medium Industries Development Corporation (SMIDEC) aimed at providing the avenue for Malaysian SMEs for business networking and product promotion. SMEs could explore new market opportunities and techniques made available under one roof throughout the event.
The Honourable Tan Sri Muhyiddin Yassin (right) visiting the Sarawak Pavilion.
Regarded as one of the premier business events, SMIDEX 2009 saw the convergence of over 331 exhibitors from within and outside Malaysia. For the first time the show provided onhand information on available financing for SMEs from various financial institutions, giving immense opportunities for them to prosper. This year’s show carried a theme “Innovation & Technology: Sustaining Power for SMEs”. SMIDEC Chairman, Datuk Ir Mohamed Al Amin Haji Abdul Majid disclosed that the potential sales value of RM150 million were secured through 168 business matching session. According to him, this is the highest amount secured since SMIDEX initiated business matching session in 1998.
The show was a boost among the participants particularly during the present economic uncertainty. STIDC would like to urge greater participation among the vendors as well as the local industry players in this event in future so as to stay competitive.
SUMMARY ■ SMIDEX aims at providing the avenue for Malaysian SMEs for business networking and product promotion. ■ Report from SMIDEC revealed that the potential sale value of RM150 million was secured through 168 business matching session. ■ STIDC would like to urge greater participation among the vendors as well as the local industry players in this event in future so as to stay competitive.
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SEMINAR ON VIABILITY ASSESSMENT OF INDIGENOUS TREE SPE CIES AND PROPAGATION TECHNIQUES FOR PLANTED FOREST DEVELOPMENT IN SARAWAK Plant tissue culture and R&D are important for indigenous tree species propagation.
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Sarawak needs to earn a reputation for being a quality producer so that its production materials become a preferred product and acquired itself a globally recognized brand name. Thus, it is a big challenge to our researchers to establish effective protocols to supply the plantation forestry with sustainable source of productive, high quality wood producing planting materials. - Datu Haji Len Deputy Permanent Secretary of Ministry of Planning and Resource Management, Sarawak and STIDC General Manager
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Aerial view of a planted forest in Bintulu, Sarawak. Inset: Kelampayan (Neolamarckia cadamba) planted on 1st May 2007 at a trial plot in Bintulu, Sarawak.
eminar on Viability Assessment of Indigenous Trees Species and Propagation Techniques for Planted Forest Development in Sarawak was held in Kuching, Sarawak on 21st May 2009. Director of Forest Department, Sarawak and General Manager of STIDC cum Chief Executive Officer of Sarawak Forestry Corporation (SFC), Datu Haji Len launched the event.
quality planting materials. For instance, dipterocarps produce flowers and bear fruit at the intervals of five to seven years and their seeds are recalcitrant in nature. Vegetative propagation is among the viable options for mass production of seedlings. The development of efficient micro-propagation techniques using plant tissue culture and R&D are important for indigenous tree species propagation” said Datu Haji Len.
The seminar was in line with the State Government’s aspiration to establish one million hectares of planted forests by year 2020 to meet the increasing demand from both domestic and international markets for raw materials. To realise this target, at least 30 million seedlings are required annually besides the need to mass propagate quality planting materials.
R&D findings on plant tissue culture for four indigenous tree species namely Kelampayan (Neolamarckia cadamba), Sawih (Duabanga moluccana), Meranti Sarang Punai (Shorea par vifolia) and Kapur Bukit (Dryobalanops spp.) showed positive results. Specific molecular markers were proven to determine the genetic variation of these tree species. This technique could facilitate the selection of quality planting materials.
Presently, 42 Licenses for Planted Forest (LPFs) were issued covering 1.4 million hectares of net planting areas in Sarawak. Acacia mangium is the main tree species planted under these LPFs. “Although indigenous tree species have many advantages such as having established market, environmentally friendly, less susceptible to pests and diseases, the major hindrances to the plantation establishment are relatively slow growth rate and irregular supply of 6
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These tree species were selected for planted forest establishment in Sarawak based on the utilization potential, rotation cycle, site-species matching requirement and growth rate. Kelampayan (Neolamarckia cadamba) and Sawih (Duabanga moluccana) were selected due to their fast growth rate and good tree form, ideal for plywood and furniture manufacturing. The rotation cycles for both species are 15 years. Dipterocarps were selected for medium
rotation of 25 to 30 years. Meranti Sarang Punai (Shorea parvifolia) is the fastest growing among Meranti species. Meanwhile, Kapur Bukit (Dryobalanops spp.) species was found adaptable to higher elevation in most soil types and terrains. Preliminary plantation trials of the four selected species were conducted in Sarawak, Sabah, Peninsular Malaysia and Indonesia. The results showed considerable potential of these tree species for planted forest establishment. Jointly organized by Sarawak Timber Association and SFC, the seminar was attended by LPF holders as well as STIDC officials. Paper on Prospective of Propagation through Tissue Culture for Tropical Forest Plantation Species was presented.
SUMMARY ■ The seminar was in line with the State Government’s aspiration to establish one million hectares of planted forests by year 2020 ■ The development of efficient micro-propagation techniques using plant tissue culture and R&D are important for indigenous tree species propagation ■ R&D findings on plant tissue culture for four indigenous tree species namely Kelampayan, Sawih, Meranti sarang punai and Kapur bukit showed positive results.
SARAWAK TIMBER INDUSTRY DEVELOPMENT CORPORATION (STIDC)
53rd IWPA CONVENTION CARB regulations revision and enforcement, Lacey Act Compliance and on-line Importer Security Filing requirements were among the pertinent issues discussed.
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he 53rd International Wood Product Association’s (IWPA) Annual Convention was held in Miramonte Resort & Spa, Indian Wells, California from 25th - 27th March 2009. With the theme “Buying, Selling, Surviving” the convention was attended by more than 150 participants from 100 companies comprising importers, exporters, manufacturers, wholesalers, retailers, service providers, shipping lines and government agencies from the US and abroad. STIDC together with several timber companies in Sarawak participated in the convention in order to keep abreast with the latest international timber trade issues and regulations particularly in the US. Among the pertinent issues discussed at the convention were the California Air Resource Board (CARB) regulations revisions and enforcement, Lacey Act Compliance and on-line Importer Security Filing (ISF) requirements. The CARB has approved the Air Toxic Control Measure (ATCM) requirements on the reduction of formaldehyde emission limits from composite wood products including hardwood plywood, particleboard and MDF sold, offered for sale or manufactured for sale in California. Effective 1st January 2009, Phase 1 (CARB 1) of the ATCM requires formaldehyde emission controlled on composite products and end products using plywood, MDF and particleboard. The allowable emission level using ASTM 1333-96 (2002) test methods are 0.08 ppm for hardwood plywood, 0.18 ppm for particleboard, 0.21ppm for MDF and 0.21 ppm for thin MDF. The allowable emission level for hardwood plywood will be revised to 0.05 ppm effective 1st January 2010 under Phase 2 (CARB 2). For particleboard and MDF, the allowable emission level will be revised to 0.09 ppm and 0.11 ppm respectively effective 1st January 2011. The rule also imposes requirements to label the product and provide documentation stating that the products comply with the proposed standards. Wood composites manufacturers could show proof of compliance to ACTM requirements through certification by third-party certifier approved under CARB.
STIDC Acting Senior Manager (Industrial Planning), Mr. Nicholas Andrew (standing 2nd. right) together with Mr. Christian Mengel, IWPA President (standing 2nd. left) and participants from Sarawak.
Meanwhile, the Lacey Act amendment was extended to cover protection to a broader range of plants and plant products. The Act also allows the U.S government to prosecute importers contravene the US as well as foreign laws. The Department of Justice will carry out investigation on the information received from US Customs and Border Protection (CBP) on the possibility of illegal timber. The Department advised importers to exercise due care to avoid civil forfeiture measures under the Act. The CBP accepts the electronic submission of the Lacey Act Declaration form since 1st April 2009, while enforcement of the data collection requirement was effective 1st May 2009.
arriving vessels with container and Container Status Message (CSM. The compliance date for these requirements will be on 26th January 2010.
The Importer Security Filing (ISF), commonly known as the 10+2 initiative is a CBP regulation requiring importers and vessel operating carriers to provide additional advance data not later 24 hours before the cargo is laden abroad a vessel destined for the U.S. For Regular cargo, importers are required to submit an ISF of 10 data elements such as names and addresses of manufacturers or supplier, sellers, buyers, container stuffing location, consignee’s number and country of origin. Transit Cargo requires the importers to submit 5 data elements pertaining to booking party’s name and address, ship to name and address, commodity HTS, foreign port of unloading and place of delivery. Two additional Carrier Requirements to be submitted are vessel stow plan for
■ Effective 1st January 2009, Phase 1 (CARB 1) of the ATCM requires formaldehyde emission controlled on composite wood products sold, offered for sale or manufactured for sale in California. The allowable emission level for hardwood plywood will be revised to 0.05 ppm effective 1st January 2010 under Phase 2 (CARB 2). ■ The Lacey Act amendment was extended to cover protection to a broader range of plants and plant products. ■ ISF requires importers and vessel operating carriers to provide additional advance data not later than 24 hours before the cargo is laden into a vessel destined for the US.
This convention also provided an insight on the economy and home building activities in the US and third party’s perspective and services offered by SGS, Rainforest Alliance and Tropical Forest Foundation in assuring legality of the timber supply. Participants were also enlightened on ways to maintain credit access and to obtain credit insurance as a form to mitigate risks under the current market uncertainty and implementation of various new regulations.
SUMMARY
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