KOTA KINABALU: The Sabah Timber Industries Association (STIA) is hoping that the state government will allow the industry to begin partial production during the Movement Control Order (MCO) period and export goods that are ready for shipment.
President Chua Yeong Perng in a statement today said it was vital for the state government to consider STIA’s suggestions as the timber industry’s ability to pay wages to workers in the coming months would be further weakened if remedial actions were not taken during and after the MCO period.
“Shipment of ready goods, controlled movement of perishable raw materials (felled logs) and systematic re-starting of manufacturing will go a long way in improving the industry’s ability to maintain and pay its workforce,” he said.
According to STIA estimates, there are about 120 containers of products worth RM9 mil to RM10 mil at the port and various factory locations that have been held back. In addition, 100,000-120,000 cu metres of felled logs, valued at between RM35 mil and RM45 mil, are currently sitting idle due to the MCO.
“The value and quality of the logs continue to deteriorate each week. We expect, overall, these felled logs would have lost at least 15%-20% of their inherent value. Certain non-durable species have lost nearly all its commercial value by now,” Chua said.
Furthermore, he added, downstream mills now faced with the critical problem of wood adhesives expiring.
“If partial production is not permitted over the next few days, it is estimated 964 tonnes (963,000 kg) of plywood and woodworking adhesives will need to be disposed of. The value of adhesives and the disposal cost will come to between RM5 mil and RM8 mil.
“There is the concern also that Sabah may not have the facilities to dispose of such quantities in such a short time frame,” he added.
Chua suggested that selected factories with expiring adhesives be given restricted production days in order to utilise their adhesive stock.
In the event the MCO is extended beyond April 14, STIA wants the government to allow certain upstream and downstream activities to start.
Chua pointed to other states in Malaysia like Sarawak and Johor, which have permitted scaled down manufacturing operations.
“It is understood that manufacturing in these states is limited within specific timber industrial clusters and a cap has been placed on the number of workers allowed to return to work,” he added.
He also said that the authorities could take the initiative to allow the movement of raw materials and manufacturing to progressively start within timber clusters (Keningau, Kota Kinabalu Industrial Park, Ladalam, Kimanis) that are not deemed high risk areas for Covid-19.
Chua said the economic impact of losing four weeks of productivity from March to April would have far-reaching consequences on the forest and timber industry, and potentially more if the MCO is extended.
He said the timber sector currently has about 30,000 full-time employees and 5,000 to 10,000 piecemeal or part-time workers, he added. - April 2, 2020, Bernama