KUCHING: Ta Ann Holdings Bhd has sharply increased the harvesting of logs from its planted forests to 92,602 hectares (ha) in 2022 from 50,281 ha in 2021 or an increase of 42,321 ha or 84 per cent.
Year-on-year, the group also increased the production of logs from natural forest to 221,090 ha from 200,884 ha in 2021 or up about 10 per cent.
Plantation logs constituted 19 per cent of the group’s total logs consumed by its plywood mill last year, said Ta Ann’s chief executive officer (CEO) Datuk Wong Kuo Hea.
“Our group has a well-planned timber resource management system, allowing us to supplement our log supply with plantation logs.
“We are proud to be one of the pioneers in forest plantation in Sarawak, and we remain committed to actively operating our forest plantation programme.
“Our goal is to establish a renewable forest resource base that meets the raw material requirements of our group’s downstream processing activities, using fast-growing plantation timber species. To achieve this, we have planted a variety of tree species in our plantations,” he added in the company’s 2022 annual report.
As at Dec 31, 2022, the group had a total planted area of 30,971 ha, out of which 29,550 ha were planted with acacia mangium species. Other planted species were kelampayan/sawi/benuaug/engkabang.
On the age profile of the planted trees, Wong said 25,502 ha or 82 per cent are above 10 years old, 3,059 ha (10 per cent) are immature (4-9 years) and 2,410 ha (8 per cent) are young area (1-3 years).
“Acacia mangium 2nd rotation planting and 3rd rotation planting were carried out after harvesting of 1st and 2nd rotation planted stands. In the year under review, 857 ha of acacia species and 6.9 ha of kelampayan replanting were completed in three licensed planted forests (LPFs),” he added in an operational review and analysis of the group.
Wong said both LPFs under Zumida Sdn Bhd and Ta Ann Plywood Sdn Bhd are undergoing second rotation planting.
“This is an important step towards ensuring the long-term sustainability of our operations, and we are proud to be taking this proactive approach to managing our plantations.
“We are delighted to announce that our plywood products using acacia veneers have been successfully accepted in the Japanese market. This is a significant milestone for our group as it demonstrates our ability to produce high quality and sustainable products that meet the needs of our customers.”
He said the group remains committed to promoting sustainable forestry practices and expanding its operations in a responsible and environmentally-friendly manner.
In financial year ended Dec 31, 2022 (FY2022), Ta Ann’s Malaysian operations recorded plywood production volume of 79,468 cubic metres (cu m) (FY2021: 80,908 cu m) or a decline of two per cent. Sales volumes fell 16 per cent to 72,992 cu m (86,529 cu m) year-on-year.
For the group’s Tasmanian operations, Wong said the group had made a strategic decision to consolidate the resources in Smithton mill located in northern Tasmania since 2021.
“This has enabled us to maximise the production capacity of the mill, which is now focused on manufacturing plywood products targeted at the local market, rather than exporting veneer to Malaysia. This has allowed us to expand our market presence and cater to the growing demand for plywood in Australia.
“Despite these positive developments, our plywood production business has encountered some challenges, notably a high worker turnover rate and shortage of skilled workers.
“These challenges have impacted our production capacity and output. However, we are actively working to address them by recruiting skilled workers from Sarawak. This initiative is aimed at ensuring that we have the necessary skilled workforce to meet the production target,” added Wong.
In FY2022, the Tasmanian operations recorded output of 9,515 cu m (2021: 18,231 cu m) or down by a hefty 47 per cent.
But the sales volume jumped by 52 per cent to 10,206 cu m (6,686 cu m).
In FY2022, Ta Ann’s plywood division generated revenue of RM242.6 million (FY2021: RM220.7 million) and net profit of RM61.1 million (RM22.2 million). The growth was mainly due to the increase in average selling price attributed to the stronger market demand. The 2022 revenue was derived from the sales of coated plywood (RM175.2 million) and structural panel/concrete panel/others (RM51.6 million).
“Our group’s key product, coated concrete plywood (CCP), a 100 per cent PEFC certified product which constitutes 90 per cent of our monthly production, has gained deserved popularity in our key market. The certification of our products has given our group a significant competitive advantage.
“As we look towards the future, we remain committed to continuing our efforts to improve our operations and meet the evolving needs of our customers. We are confident that our on-going investments in production capabilities, such as fine-tuning our processing lines to maintain the high level of quality and reliability of our CCP products, and enhancing our customer service, will position us for sustained growth and success,” said Wong.
He said 97 per cent of the group’s plywood exports from Malaysia went to Japan and the remaining three per cent to Australia.
In FY2022, the group’s total logs sales volume climbed more than 20 per cent to 295,550 cu m (FY2021: 245,893 cu m). Out of the 221,090 cu m of logs produced from the natural forest in FY2022, 72,154 cu m were exported and 130,787 cu m for downstream processing. India remained the group’s major logs buyer, absorbing 89 per cent of the total export volume.
Wong said the log export market has remained stable, with good profit margins. “This is a positive development, and we are working hard to ensure that we maintain our position in the export market.”
