Reviving Sarawak’s timber industry
KUCHING: The Sarawak Timber Association (STA) believes that the ailing timber industry is not to be tackled alone by industry players; it requires the state government to be the driving force joined by other stakeholders to overcome challenges ahead.
Expressing deep concern on the timber industry’s gloomy outlook, they emphasised that this combined effort was necessary in order to allow the industry to sustain and remain a vital contributor to the state’s economy.
While they appreciated that the state government had been creating opportunities for the industry to provide feedback and recommendations, frustration was rising among industry players as no concrete actions were in sight.
“The Sarawak government ought to conduct thorough assessment studies taking into consideration the actual situations affecting the industry, as well as working on advancing insights obtained from communicating with stakeholders including the industry players and other forestry agencies,” said STA in a statement yesterday.
It said that instead of introducing new policies such as additional fees, cesses, and premiums which would further increase costs for the industry, they hoped that the state government would look into implementing various measures.
“These measures could include reduction in royalty and premiums for logs used in local processing, waiver on royalty for planted logs used in local processing, reduced levy for foreign workers in manufacturing sector, subsidies for automation of planted log processing, amongst others, to cushion the current difficult situation and to stimulate growth in the timber industry,” it added.
The association pointed out that the timber industry was continuing to be severely affected by cost increase arising from policy and administrative requirements, such as the increase in premium and cess as well as labour cost, on top of existing high production costs.
“Many mills across Sarawak are in dire situations and have been forced to either scale down or shut down their operations. For mills that are still in operation, the industry sees a sharp drop of more than 50 per cent in capacity utilised as of 2019 compared to 2018.
“At the same time, the industry is gradually losing its market share to countries such as Indonesia, Vietnam, and other Asean countries that have a competitive edge over Sarawak because of favourable policies and strong government support,” STA said.
It stressed that the timber industry was not spared from the current economic challenges and uncertainties — struggling to realign its operation strategies and reallocate its key resources in order to keep businesses afloat.
The association regretfully noted that actions taken by the industry to sustain businesses included decisions which affected jobs.
