The Trans-Pacific Partnership Agreement (TPPA) is expected to be good for the Borneo’s timber industry in terms of creating a bigger market and reducing import duty. Source: Borneo Post
Second Resource Planning and Environment Minister Datuk Amar Awang Tengah Ali Hassan said based on explanations given by the Minister of International Trade and Industry Datuk Seri Mustapa Mohamed, the yet-to-be-signed TPPA should not negatively affect the state’s timber industry.
“Instead, it will open a bigger market. Besides that, through TPPA, the import duty between the 12 countries will be reduced,” he said in his keynote address at Sarawak Timber Industry Development Corporation (STIDC)’s monthly meeting.
The 12 countries in the pact are Malaysia, Brunei, Chile, New Zealand, Singapore, US, Australia, Peru, Vietnam, Canada, Mexico and Japan.
Awang Tengah said he did draw Mustapa’s attention to various concerns of the state, especially those pertaining to the environment, when he (Mustapa) was here recently to give a briefing on the TPPA.
“These (concerns) must be tackled. The minister will hold further discussions with us to ensure matters like these can be spelled out clearly. The main objective is to ensure the timber industry can continue to be developed,” he said.
Meanwhile, Awang Tengah advised STIDC to formulate an action plan for the 11th Malaysia Plan (11MP) and beyond to boost the timber industry’s value-added index from the current 30% to 40%.
This is to ensure that the export sector income can rise to between RM8 billion and RM10 billion annually.
“Long-term strategies to boost export earnings should be pooled together by looking into opportunities to explore new products that have value added in the timber industry. Among them that we have implemented was our joint ventures with foreign investors in producing wood pellets,” Mr Tengah said.
“The most strategic for us is to explore furniture production from Acacia wood through the Acacia Forest Plantation project that had been fully acquired by STIDC. For this purpose, STIDC has to identify suitable local and foreign investors to realise this goal.”
Mr Tengah noted that the state’s timber industry currently had export revenue of RM7.2 billion and generated 50,000 jobs.
This revenue was derived from the use of timber from the state’s tropical forest, amounting to not less than seven million cubic metres per year.
“On average, the added value that has been generated from every cubic metre of timber that is processed is RM1,020,” he said.
This value is important as a benchmark for the Sarawak’s timber downstream industry at this time and in the years to come.”
On a related matter, he said collaborations with industries and institutions of higher learning must be enhanced in terms of research and development (R&D) in order to produce new value-added products to maximise use of the state’s natural resources.
“The R&D efforts forged with STA (Sarawak Timber Association) and Unimas (Universiti Malaysia Sarawak) in furniture product development is very important. They are in line with our goals to increase export revenue.”
He also said planning and infrastructure development for the timber industry was an important component that must be given priority so that the state would be able to attract more large-scale local and foreign investors.
“Investments in the downstream industry based on wood is expected to be able to boost export revenue surpassing RM8 billion in the 11MP.
“Besides that, preparing the supporting industries is also very critical to complete the value chain in the wood-based downstream industry, especially the big-scale furniture industry that is export oriented.”