KUCHING, April 8 ― Deputy Chief Minister Datuk Amar Awang Tengah Ali Hasan said today all long-term forest timber licences in the state must have forest management certification by next year to comply with the international requirements.

He said the state government now has allowed third-party verification to ensure the certification’s credibility and market acceptance.

"The way forward for our local timber industry is to transform its business operations for long-term sustainability in line with the state’s Timber Industry Master Plan,” he said at a virtual gathering organised by the Sarawak Timber Development Corporation (STIDC).

Awang Tengah, who is also the state second minister of urban development and natural resources, said the local timber industry players cannot continue to rely on natural forest alone but to utilise more timber from the planted forest.

"They must also move towards downstream high value-added activities such as furniture and engineered wood products, employing Industry 4.0 to enhance productivity and competitiveness.

"At the same time, they must also explore new markets beyond the existing traditional markets,” he stressed.

He said the timber industry is now facing many challenges, especially with the current global economic and geopolitical uncertainties, which are further compounded by anti-dumping and anti-subsidy initiatives imposed by consuming countries, and strong competition from other producers such as Indonesia, Vietnam and China.

On the domestic front, he said declining production from natural forest and increasing the cost of production in upstream have further impacted the competitiveness of the local timber industry. 

 He said the production of the log from natural and planted forests has declined from 5.73 million cubic metres in 2019 to 4.33 million cubic metres in 2020, affecting the global plywood market share. 

Awang Tengah said Sarawak’s export of plywood to Japan had declined from RM2.11 billion in 2019 to RM1.97 billion in 2020.

"As a result, we lost to Indonesia as the number one plywood supplier to Japan,” he added.

He said under the Sarawak Economic Action Plan (SEAC), the state has set an export earning target of RM8 billion for timber and timber products by 2030.