Malaysia: Shortages of raw materials and skilled workers could hold back furniture export performance

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Malaysia’s timber exports are expected to increase 5% this year from the RM23.22 bil. in 2017, according to Dr. Jalaluddin Harun, Director General of the Malaysian Timber Industry Board (MTIB).

His confidence stems from the high demand for Malaysian timber in Japan, the United States, member states of the European Union, Australia and India.

Harun reported that Malaysia ships to more than 160 countries but marketing efforts will be focussed on those countries with which Malaysia has trade agreements.

The main issues facing the timber sector, said Harun, are shortages of both raw materials and skilled workers and this must be addressed.

Harun estimated that 80% of Malaysian made furniture is of rubberwood and efforts must be made to secure this resource for the domestic industry.

"Eighty per cent of our furniture is made up of rubber woods besides other tropical timbers. As demand from developed countries is high, sometimes we have to ban the exports (of rubber furniture) due to shortages of rubber materials," he said.

On the involvement of bumiputra companies in the national timber industry, Jalaluddin Harun added that it is still very low and lagging as it made up only 0.7% or RM161 million of total exports last year. In fact, currently only 341 bumiputra companies are active in the industry, of which 46% are micro-status companies with total revenue of RM500,000 and below each year and only one medium-sized company with income ranging from RM15 million and RM50 million a year, The Sun Daily reported.

“This is a sorry state of affairs as most of them are bogged down by low technology, manual work, lack of promotion and imprudent financial management," he said, adding that the situation will not change if entrepreneurs are still not progressive in expanding their business.

MRSZ Two Enterprise, a bumiputra timber-based company which received an MTIB raw material grant of RM20,000 in 2010, earned RM1.09 million in revenue last year.

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