The Malaysian Timber Industry Board (MTIB) will launch a design roadmap for the furniture industry as it looks to promote exports of higher value added products as opposed to mainly primary timber products. Source: Sun2Surf
“In Peninsular Malaysia especially, we cannot just be the original equipment manufacturer (OEM). We’re moving towards original design manufacturer (ODM) and we’ll be launching a design roadmap for furniture soon. We want to ensure our products continue to fetch good image and higher value just like Italian furniture,” said MTiB director-general Dr Jalaluddin Harun.
Furniture, mouldings, builders’ joinery and carpentry (BJC) and wooden frames are among products classified as value added products, while sawn timber, plywood, veneer and panel products are categorised as primary products.
“We don’t want to (just) focus on commodities. What we want to do is convert these commodities into high value added products, in line with the National Timber Industry Policy (Natip).
“We’re talking about mouldings, profiling, BJC, involving things like flooring, frames… this is where the conversion is getting important,” he said.
“Timber is also considered one of the green materials. We’re trying to match the green concept with timber industrialised building systems (IBS) and this is the direction that we’re heading for.”
Jalaluddin said for the last five years, export revenue have been averaging at RM19 billion to RM20 billion a year. Of the total export of Malaysian timber and timber products in 2012, value added products made up only 44% or RM11.42 billion of the timber export revenue while primary timber products constituted 56% or RM8.7 billion.
In order to meet the Natip’s target of an annual export earnings of RM53 billion by year 2020, the timber industry needs to be restructured with more emphasis on value added downstream activities such as enhancing the furniture manufacturing sector and adding value to other timber products like mouldings and BJC.
To achieve the 2020 target, 60% of export earnings must be derived from secondary and tertiary operations (high value addition) while 40% are from primary processed wood products.
In 2012, the total export of Malaysian timber and timber products amounted to RM20.2 billion. By end of 2013, export of timber and timber products is estimated to reach RM23.7 billion, according to MTIB, contributed by more value addition, such as furniture and the increase in BJC and moulding.
Jalaluddin said the three biggest blocks of exports go to traditional markets like Japan, US and EU while countries like India, Australia, Taiwan and Singapore are coming up strong in terms of timber demand.
This year, there are missions to emerging markets like Pakistan, Sri Lanka, Turkey and Egypt as MTIB wants to increase its reach into Saudi Arabia, UAE and the Middle East.
“We don’t want to (only) look into the traditional markets. We want to look at emerging markets such as Eastern Europe, parts of Middle East, Egypt, Algeria and we may want to explore new markets like Africa.
“You cannot put all (your) eggs in one basket. The more you expand your base, the safer you are. We’re thinking of how we want to penetrate those new markets and we’re strategising now,” said Jalaluddin.
On import of major timber products, he said imports are expected to go up in line with demand. For example countries such as Germany, France and the Scandinavian region may prefer specific hardwood. Imports of timber products stood at RM2.64 billion in 2012.
“We import oak, ash, maple, cherry… process it and turn them into furniture and re-export them. We’re importing low cost material and processing them into high value added product, a trend that we feel is positive,” Jalauddin said.
In Malaysia, the biggest timber export revenue comes from Peninsular Malaysia, followed by Sabah and Sarawak.
“On products, 74% of the exports from Peninsular Malaysia are high value products, particularly furniture. Johor and Selangor are major contributors for furniture export in Malaysia. Sabah and Sarawak are strong in plywood, which is mostly exported to Japan, Korea and Taiwan,” said Jalaluddin.
MTIB is also enhancing and promoting the use of bamboo and rattan to develop new designs. In addition, it is also working on research and development to produce high performance by-composite material.
