• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

Landowners Can Tap Fund for Forest Replanting

Posted on: Tuesday, 7 March 2006, 00:00 CST

By OOI TEE CHING

LANDOWNERS who want to plant high-valued timber species can apply for financial assistance from the Ministry of Plantation Industries and Commodities under the RM200 million nationwide forest replanting programme, minister Datuk Peter Chin Fah Kui said.

The fund, allocated to the programme under Budget 2006, is being managed and will be disbursed by Forest Plantation Development Sdn Bhd, a special purpose vehicle set up by the Malaysian Timber Industry Board.

Under the programme, the Government is targeting to create 25,000ha of farmed forest. Valuable timber species like rubberwood, semangkok and acacia mangium have been identified.

Chin said the special purpose vehicle can also channel funds to state governments or private sector companies.

"The Federal Government does not have land for such large-scale cultivation. We encourage the state governments of Sarawak, Sabah, Johor, Pahang and Terengganu to consider allocating land for the purpose.

"The state governments can lease the land to this company, carry out the programme themselves or form joint ventures," the minister when speaking to reporters after opening the Export Furniture Exhibition 2006 (EFE) in Subang, Selangor, yesterday.

Malaysia Furniture Entrepreneurs Association (MFEA) president Cha Hoo Peng advised furniture manufacturers, who own big plots of agricultural land, to plant their own rubber trees.

MFEA represents all 13 state furniture associations nationwide.

"In being proactive to ensure adequate supply of this raw material for our businesses, members who own land are advised to apply to the Government for some financial assistance to plant rubber trees," Cha said.

Malaysia's furniture industry recorded its best-ever export sales of RM7.67 billion last year.

Although it posted a record RM7.67 billion worth of furniture exports, the 6 per cent growth rate from 2004's RM7.23 billion was actually the slowest in the sector's history.

"Apart from year 2001, furniture exports had always gone up year after year. Exports had always jumped more than 8 per cent. This is the first time it climbed so little," Cha said.

The slower growth was due to higher crude oil and natural rubber prices.

Cha said high oil prices increased shipping costs and made petroleum derivatives like synthetic rubber, glue, plastic and sponges - materials used to make furniture - more expensive.

He added that high natural rubber prices had resulted in planters preferring to tap the mature trees rather than chop them down as timber for furniture manufacturers.

"There's a shortage of rubberwood because of high latex prices. Last Friday, latex was traded at RM5.65 per kg," Cha said, adding that last year furniture makers were also hurt as more rubberwood logs were exported to China and Vietnam.

This year, following the total ban on rubberwood exports, Cha said, MFEA wants to engage in more dialogues with MTIB on the prospects of trading rubberwood as a commodity on the stock exchange.

He said when rubberwood futures contracts are traded, there will be transparency and it will be easier for downstream players of the timber industry to plan and control manufacturing costs.

Meanwhile, when asked on the prospects of timber being traded as a commodity on the derivative market of Bursa Malaysia, Chin said, "We're pursuing that idea but we don't have anything concrete to announce yet."

Source: Business Times; Kuala Lumpur

More News in this Category