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Ministry wants permanent ban on log export

13th July, 2018


KOTA KINABALU: The Ministry of Trade and Industry (MTI) will be pushing for permanent export ban of round logs in order attract investors in the timber downstream industries.

Deputy Chief Minister, Datuk Seri Wilfred Madius Tangau who is also Minister of Trade and Industry, said that the current ban imposed by the State government in May was temporary, and MTI is pushing for the ban to be permanent.

According to him, MTI has formed a task force which includes the Malaysian Timber Industry Board (MTIB) to study its need and implication before presenting it to the state cabinet soon.

A permanent ban is necessary to ensure security of supply of raw materials to enable a value-adding industry to flourish.

“There must be consistency (of supply) to attract the investors. Similar ban was imposed once which attracted investors, but after that the ban was lifted, causing shortage and mismatch of raw materials and affecting the investors.

“So now, the investors will only come if the ban is permanent,” he told a press conference after receiving a courtesy call from MTIB Director-General, Datuk Jalaluddin Harun at MTI office in Wisma Kewangan here yesterday.

Tangau said that Sabah’s garden furniture industry has been declining over the years because the raw materials were exported to other countries.

The value addition of timber in Sabah at less than one percent is ‘very low’ compared to the national average of 7.7 per cent, he said.

In order to drive the timber and furniture industry in the state, the government should have some control over the state’s government-linked corporations such as SAFODA (Sabah Forestry Development Authority) so it can have a say in the decision making process on what to do with their products.

Citing SAFODA product, acacia mangium as an example, he said that the local furniture industry relies on the species as it is suitable for outdoor furniture.

“However, SAFODA controls their product so they export them to Vietnam which happened to be Malaysia’s main competitor in the industry,” he said.

Meanwhile, Jalaluddin said that Sabah’s furniture export is experiencing gradual decline from RM68.8 million in 2007, to RM9.3 million in 2017.

Apart from banning the export of round logs, he said that the task force is also looking at alternative materials such as oil palm trunk which is in abundance in Sabah.

MTIB has been working with various quarters, including a German company, to pursue the production of sawn timber, veneer and plywood from oil palm trunks, and has been able to produce them at a very competitive rate.

Sabah, he said, is in a very good position to benefit from it as it has the biggest oil palm plantation in the country at 1.55 million hectares. (The latest Oil Palm Statistics 2017 from Malaysia Palm Oil Board put Sarawak slightly ahead of Sabah.)

Meanwhile when asked on export value of round logs from Sabah, he said that it was RM445 million in 2007, and had declined to RM206 million in 2017.

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