Furniture export affected by economic slowdown
The export of Malaysian timber-based furniture in 2011 is expected to remain at last year's level of RM6.5 billion due to the impact of the global economic slowdown and inherent problems in the United States and Europe.
Deputy Minister of Plantation, Industries and Commodities, Datuk Hamzah Zainudin said the strengthening of the ringgit had also impacted exports.
"The furniture industry is a very competitive market and we have to find ways to reduce costs, such as increasing the adoption of innovative technology in the machining process, while reducing reliance on foreign workers," he said during the official opening of the Aseanwood-Woodtech 2011 Thursday.
Even within Asean, he said Malaysian timber-based furniture manufacturers faced stiff competition from Vietnam, which is now becoming a strong player.
"We are aware of the various challenges faced by the wood-based industry and the ministry has initiated appropriate programmes to ensure that there is sufficient supply of raw materials and skilled workers for the furniture industry," Hamzah added.
He said through the promotion of forest plantations, the ministry is encouraging the replanting of old and unproductive rubber trees, with fast growing timber species.
"At the same time, we are providing soft loans to entrepreneurs, who can increase the areas for forest plantation.
"We also encourage more research and development on the utilisation of bio-composite and other alternative materials. "These measures taken collectively, are expected to facilitate the industry's growth and hopefully, Malaysia will export RM53 billion worth of furniture and other wood-based products by 2020," he added.
Hamzah also stressed that there is a need to increase exports of downstream timber-based products.
"Over the years, the wood-based industry has undergone major changes and it is now a major exporter of processed and finished wood products, in particular the furniture manufacturing industry," he said.
He said Malaysia is also actively promoting the green image of the timber industry through the Malaysian Timber Certification Scheme (MTCS).
"This scheme ensures that all Malaysian timber products are produced from legal and sustainable sources. We are determined to fortify our position by concluding the Voluntary Partnership Agreement (VPA) under the EU-Forest Law Enforcement, Governance and Trade (FLEGT).
"We are hoping that with the full support of all state governments, especially Sarawak, this VPA can be signed by the year-end.
"If this happens, then timber product exporters here, will be able to enjoy an easier access to the lucrative EU market," he added.
Hamzah said as of last year, exports of timber-based furniture constituted 5.75 per cent of the total exports of commodities and commodities-based products.