Author: Mohamed Hamza Ghaouri
Malaysia has recently launched its ‘Strategic Plan 2020-2030: Environmental Sustainability in Malaysia’, a 10-year strategic plan, which is in conjunction with Year 2021 World Environment Day unveiled by the Minister of Water and Environment, YB Dato’ Sri Tuan Ibrahim Tuan Man.
The minister stated that this initiative or plan is aligned with the clear goals and targets towards achieving environmental sustainability by the year 2030. He said that the strategic plan was developed based on three main frameworks that translated into the Ministry’s direction and strategy for a period of 10 years from 2020 to 2030. The plan had been drafted and implemented since 2020 based on the concept of planetary health which includes four main thrusts, namely, empowered governance, green growth, strategic collaboration and social inclusiveness.
Further to this, the minister of Plantation Industries and Commodities, Dato’ Mohamed Khairuddin Aman Razali recently announced that MTC has set up a 28.3 million fund to boost the competitiveness of the timber industry. Similarly, the CEO of MTC, Mr Muhtar Bin Suhaili announced that the Malaysian Wood based sector increased to RM6.045 billion (with nearly 10% year-to-year increase) in the first quarter of 2021 despite the country facing the COVID-19 pandemic. The roadshow comes with efforts of the ministry to enhance collaboration with timber industry players in different states.
In this blog, we will shed light on the timber industry, which is the third-largest commodity sub-sector in the country after palm oil and rubber, and highlights the demand for wood and wood-based products which presents huge investment opportunities for investors.
With an impressive customer profile ranging from private residences to cafes and restaurants, business centres as well as hotels and resorts, Malaysia has positioned itself as one of the leading designers and manufacturers of various categories of indoor and outdoor timber based-furniture.
Malaysia’s three main markets for the exportation wood-based products are USA, Europe and Oceania. The USA is a major contributor in this market segment with purchases of more than 60% of the country’s wooden furniture exports. Exportation to the United States, Malaysia’s largest market, went up 46.9% to RM2.44 billion. On the other hand, exports to Oceania markets such as Australia and New Zealand recorded an increase of 19.0% to RM297.7 million. Exportation to the third largest market of wood-based products (Europe) has increased to RM561.2 million (9.9%) in 2021.
Besides these three giants, many other countries indicate their interest in the Malaysia’s timber and timber-based products. Timber products are also exported to various destinations worldwide including China, Japan, Indian, Thailand, Korea, Czech Republic, UAE, UK and Russia.
It is important to note that the UAE is a leading export destination for Malaysian wooden furniture in the middle east. It is the top ninth export destination for Malaysian wooden furniture with a market value of RM130.7 million (USD31.1 million).
The demand for timber is constantly growing, on an international scale, as it has multiple uses such as hotel industry, housing and others. All hotel projects, including construction and renovation, are heavy consumers of timber. In addition, it is used for the manufacture of wooden bedroom furniture (such as bed frames, bedside tables, chest of drawers, wardrobes, dressing tables, etc.), dining rooms (tables, chairs, etc), living room furniture (sofas, room dividers, corner storage units, etc.), bathroom cabinets, kitchens, passages, dining and study areas, balconies, guest rooms, entry foyers as well as for the outdoors. As such, Finterra Global Plantations is taking advantage of this big demand, by offering a grade A rate investment opportunity with high yields, quarterly pay-outs and capital back at the end of tenure of Paulownia Timber, the fastest tree species in the world.
Timber with the right moisture is also used for the manufacturing of products such as floors, doors and windows. It is suitable for medium construction, posts, beams, joists, rafters, door and window frames and sills, fender supports, flooring, staircase, vehicle bodies (framework, floorboards and planking), ship and boat building (keels, keelsons and framework), plywood, laboratory benches and railway sleepers.
Accordingly, Finterra has integrated the timber plantation market from its widest doors by partnering with the leaders of this industry and providing a disruptive technology that will take the industry to the next level. Through a joint venture with specialist, Finterra Global Plantations (FGP) commits to:
- Planting two million seven hundred thousand threes.
- Decreasing the carbon footprint.
- Following ESG standards in our operations.
Aligned to the country’s 10 years Strategic Plan and carbon footprint as well as adopting the Environmental, Social and Governance (ESG) best practices, Finterra Global Plantation has taken proactive steps in playing a role to ensure that the Malaysian timber industry continues to flourish and remains sustainable to meet the worldwide demand for timber materials.