www.mtc.com.my Annual Report 2014 Annual Report 2014 Report Annual Contents

corporate information Corporate Profile and Organisational Structure 03 Board of Trustees 04 vision Sub-Committees of the Board 05 To be the lead organisation Management Team and In-House Committees 06 in developing the Malaysian timber industry into performance review a world leader in the Chairman’s Statement 08 manufacture and trade of CEO’s Review of Operations 12 timber products. operations review Performance of the Malaysian Timber Trade 18 mission Promoting and Developing the Timber Industry 27 To ensure the sustainability Nurturing the Timber Industry 34 of the Malaysian timber industry by improving Supplementing Raw Material Supply 42 its competitiveness, Campaigning for Malaysian Timber 44 enchancing market PR & Communications 47 access and creating trade financial review opportunities. Financial Statement 55 in memoriam values A Giant in the Timber Industry 56 Leadership; Growth; Teamwork; Partnership; Integrity; Strength. 03

Corporate Profile The Malaysian Timber Council (MTC) was established in January 1992 to promote the development and growth of the Malaysian timber industry. MTC was formed on the initiative of the timber industry and governed by a Board of Trustees, whose members are appointed by the Minister of Plantation Industries and Commodities.

objectives

To promote the Malaysian To promote the development of To augment the supply of timber trade and develop the the timber industry by expanding raw materials for the timber- market for timber products the industry’s manufacturing processing industry. globally. technology base, increasing value- adding in production and increasing the pool of knowledge workers.

To provide information services To protect and improve the to the timber industry. Malaysian timber industry’s global image.

Organisational Chairman Structure & Board of Trustees

CEO

Corporate Communications Trade Public & Finance & raw Timber & Investments Promotion Corporate Administration material IndustrY Division & Marketing Affairs Division supply Development Information Division Division division Division

Regional offices

MTC MTC MTC london dubai guangzhou 04 05

Board Sub-Committees of Trustees of the Board

The Chairman and Board of Trustees determine the Council’s 22nd Annual General Meeting investment management committee market advisory committee policies in various functions, including investments. At the 22nd Annual General Meeting held on 17 June, The Investment Management Committee (IMC) was The Market Advisory Committee (MAC) was established in Members consist of a representative each from the five the following were among the resolutions passed:- established in 1998 to oversee all investment-related 2003 to formulate the strategic direction for the promotion founding members of MTC, namely, the Malaysian Wood matters for the MTC Endowment Fund. This requirement and growth of the industry. Several Working Committees Industries Association (MWIA), the Timber Exporters’ i. The Audited Financial Statements of the Council for the was stipulated by the Ministry of Finance (MOF) and the then operate under the MAC. In 2012, to replace the Task Force Association of Malaysia (TEAM), the Malaysian Panel Products year ended 31 December 2013 together with the Reports Ministry of Primary Industries as MTC would be managing Committees on Japan and India, the Board approved the Manufacturers’ Association (MPMA), the Malaysian Wood of the Trustees and Auditors thereon were duly tabled, funds provided by the government. The IMC ensures that setting up of the following Task Force Committees: Moulding and Joinery Council (MWMJC) and the Malaysian received and adopted by the Members of the Board. the Endowment Fund is invested according to guidelines and Furniture Council (MFC). There is also a representative each asset allocations issued by the MOF. It also reviews the fund • Sawntimber, laminated scantlings and general mouldings from the Ministry of Plantation Industries and Commodities ii. Messrs KPMG was reappointed as Auditors of the Council. performance and makes appropriate recommendations to the • Panel products (plywood, MDF, particleboard, etc.) (MPIC), the Malaysian Timber Industry Board (MTIB), Board on appointments and termination of fund managers. • BCJ (door, flooring and decking) Forestry Department Peninsular Malaysia (FDPM) and the No Extraordinary General Meeting was held in 2014. The Endowment Fund’s performance is submitted to both • Furniture and furniture components Association of Malaysian Bumiputra Timber and Furniture MPIC and MOF every quarter. • Raw material supply Entrepreneurs (PEKA). The Board approved the appointment of Ms Annie Yin as the joint Company Secretary of MTC. Members of the IMC were: The decision to change the Task Force from market-focused The Board met eight times during the period under review. • Datuk Aaron Ago Dagang, IMC Chairman/MTC Chairman to product-focused was because the former approach was These were the 139th – 146th Board Meetings held in February, • Datuk Seri Nurmala Abdul Rahim, Secretary-General, found to be too general and not focused as too many product March, April, May (two meetings), August, October MPIC (up to June) groups were involved in each Task Force. The activities of the and December. • Datuk Himmat Singh, Secretary-General, MPIC Task Force Committees in 2014 are further elaborated under (from 21 July) the section “Promoting and Developing the Timber Industry”. • Wong Weng Miin, MOF (up to 21 October) • Fazitah Mustafa, MOF (from 1 November) board sub-committee on human resource • Datuk Yeo Heng Hau, MTC CEO The Board Sub-Committee on Human Resource (BSC-HR) • Suria Zainal (Secretariat) was established in 2012 to provide direction on MTC’s HR strategies; to ensure that MTC’s HR policies, particularly There was one IMC meeting held in the fourth quarter of 2014 related to recruitment and compensation, are in line with during which the IMC approved the following: industry standards; and to ensure that MTC’s HR policies are able to attract and retain the necessary talent to enable the i. The withdrawal of RM35.209 million from MTC Council to achieve its objectives. The BSC-HR met eight

TOP Endowment Fund for MTC’s 2015 Budget. times in 2014. Thang Hooi Chiew (Independent) ii. The withdrawal of RM3.60 million to settle the MTC Endowment Fund 2015’s tax liability. Members of the BSC-HR were: Below Datuk Seri Nurmala Abdul Rahim iii. The appointment of Towers Watson (Malaysia) Sdn. Bhd. • Dato’ Sri Dr. Abd Rahman Abd Rahin, FDPM (MPIC) replaced by Datuk Himmat to conduct a study on the Strategic Asset Allocation of • Dr. Jalaluddin Harun, MTIB Singh after her retirement as the MTC Endowment Fund to raise the equities level from • Mohamad Sanuri Shahid, MPIC Secretary-General of MPIC on 21 July 2014. 35% to 50% at the quoted cost of RM60,000 only. • George Tan Seng Hoe, TEAM • Chin Lee Yen, MWMJC Standing (L-R) Sunny Ter (MFC), Ahmad Suradi Adnan (PEKA), George Tan Seng Hoe (TEAM), Dato’ Sheikh Othman • Datuk Yeo Heng Hau, MTC Sheikh Abdul Rahman (MPMA), Dato’ Abdul Karim Ahmad Tarmizi (Independent), Chin Lee Yen • Ruby Nair, MTC (Secretariat) (MWMJC) and Dato’ Low Kian Chuan (MWIA)

Seated (L-R) Dr. Jalaluddin Harun (MTIB), Datuk Himmat Singh (MPIC), Datuk Aaron Ago Dagang (Chairman), Datuk Yeo Heng Hau (Ex-Officio) and Datuk Sri Dr. Abdul Rahman Abdul Rahin (FDPM) Management Team & In-House Committees

Standing (L-R) Ruby Nair, Dr. Eric Ng Kok Leong, Datuk Yeo Heng Hau, Tan Ting Wai, Khairul Anwar, Hamidah Abdullah and Abdullah Abdul Malek

Seated (L-R) Rachael Wong, Noraihan Abdul Rahman, Sheam Satkuru-Granzella and Suria Zainal

Left Dr. Wong Tuck Meng

The MTC management team was headed by Datuk Yeo Heng ihc on raw material supply Hau, who was Acting CEO from 1 January - 30 September The IHC on Raw Material Supply is responsible for the 2014, and CEO from 1 October - 31 December 2014. formulation of policy recommendations on the Council’s raw material programmes and approval of applications A few In-House Committees (IHC) have been established by companies for raw material import assistance. to ensure proper organization-wide consultation on and the Its members were: Performance smooth running of specific aspects of the Council’s operations. • Datuk Yeo Heng Hau They are as follows: • Suria Zainal • Abdullah Abdul Malek Review ihc on finance • Rachael Wong The IHC on Finance provides an oversight of all financial aspects of the Council’s operations, as well as the fund ihc on communications managers managing the Endowment and Operating Funds The IHC on Communications was established to provide of the Council. This Committee is also responsible for a cohesive and integrated approach to the Council’s ensuring the proper execution of investment policies set communications’ needs, both print and electronic. by the Board and the IMC. Its members were: Its members were: • Datuk Yeo Heng Hau • Suria Zainal • Suria Zainal • Dr. Wong Tuck Meng • Rachael Wong • Rachael Wong • Andrew Kong 08 09 “for dramatic growth to happen, policy makers must determine new sources of revenue for the industry, and formulate policies that could support such growth.”

Chairman’s datuk aaron ago dagang Statement chairman

I am pleased to present the MTC 2014 Annual Report.

The year 2014 proved to be a continued challenge for Malaysia and, indeed, for many other export-oriented nations. Many high-income countries continued to be Handing over of ‘Glulam Tree’ to MPIC (February 2014) bogged down by the aftermath of the global financial crisis. Emerging economies, meanwhile, showed less dynamism The global outlook in 2015 would partly be defined by compared to the recent past. Global growth inched soft commodity prices; persistently low interest rates but upwards slightly to 2.6% in 2014 (cf. 2.5% in 2013). increasingly divergent monetary policies across major economies; and weak world trade. Declining oil prices A few of the industry’s main markets, like the US and the since mid-2014 would support global activity and help UK, gained momentum as labour markets improved and generate growth in oil-importing developing economies, monetary policies remained accommodative. The Eurozone but this would be somewhat off-set by dampened growth economy, however, continued to sputter without much prospects for oil-exporting countries, with significant discernible improvement in the near term and Japan regional repercussions. remained subdued with Abe’s third arrow not quite hitting the intended bulls eye. China had a carefully managed This mixed bag of economic realities enabled the Malaysian economic slowdown marked by disciplined structural timber-based industry to register RM20.52 billion reforms in the form of monetary and fiscal tightening. in foreign exchange earnings in 2014. This was a 5% Weaker growth in developing markets in 2014 reflected improvement over 2013 exports of RM19.5 billion, but soft external demand, domestic policy tightening, political the increase was largely due to a weakening of the Ringgit uncertainties and some supply-side constraints. in the final quarter of 2014, brought about by spiralling global oil prices.

So the questions going forward are, firstly, how can our timber-based exports register an improvement that is based on real growth, and not due to factors like a weaker Ringgit? Secondly, what will it take to raise the level of innovation in the wood-based sector to enable the industry to be perceived as dynamic, knowledge-based and forward-looking?

Before we look at a few potential answers, bear in mind that the wood-based industry and furniture manufacturing have been classified as labour-intensive. Put together with construction, distributive trade and restaurants; textiles, apparels and leather products; and agriculture, these industries made up 32% of the GDP but commanded 50% of the share of employment in 2014.1 Visiting a timber importer in Sharjah ( January 2014) 1 Bank Negara Malaysia 10 11 Annual Report 2014 2 Bank Negara Malaysia Annual Report 2014

We executed technical projects like fire-testing of selected Malaysian timbers and machinery retro-fitting, and spearheaded research on Malaysian timber species

that can be used for glued laminated (glulam) timber Visiting a Malaysian exhibitior’s booth at Furniture China 2014 (September 2014) production. MTC also continued to strongly advocate for Malaysian timber and forestry, particularly in Europe. Information on www.mtc.com.my was completely Wood Encouragement Policy in Selected Developed Countries re-organised to serve different stakeholders in a more user-friendly manner. Region/country year of implementation policy

Latrobe City Council, Australia 2014 The first council in Australia to implement a policy to promote the use of wood as the 1 But all these initiatives alone are not enough to achieve preferred material in both the construction and fit-out of Council buildings and infrastructure. the aspirations of the National Timber Industry Policy British Columbia, Canada 2009 All newly constructed publicly funded buildings such as schools, libraries or sports complexes, (NATIP) of RM53 billion in timber-based exports by the must consider wood as the primary building material. Ministerial Mission to India (June 2014) year 2020. For dramatic growth to happen, policy makers Quebec, Canada 2009 Under a policy to encourage environmental performance and the use of wood, construction must determine new sources of revenue for the industry, 3 project proposals that use wood instead of other materials and fall within 5% of the cost of and formulate policies that could support such growth. other proposals will be considered the same. This should be compared with knowledge-intensive We need stronger policies to support NATIP’s objectives. Ontario, Canada 2012 The Wood First Act was enacted to facilitate a culture of wood by requiring the use of wood industries like E&E; government services; and finance, What we need to do now, for example, is to start looking at as the primary building material in the construction of publicly funded buildings. The Act insurance and real estate which altogether contributed 32% potential sources of growth seriously; support the idea of also increased the maximum allowed height for a wood framed construction from four to six to the GDP but used only 32% of the share of employment; using more engineered timber (e.g., glulam) to optimise on storeys. and capital-intensive industries, like F&B and tobacco; our resources; and vigorously promote the importance of Finland 2004 The Finnish government has put in place land use planning incentives to encourage the transport and communications; petroleum, chemical design in furniture-making. Otherwise, most of our timber- increased use of wood in small house construction.

and rubber products; and mining and quarrying, which based exports will forever languish in the commodity-based Japan 2011 The Japanese national government introduced the Wood First Law, requiring wood to be altogether contributed 35% of GDP but took up only 16% market segment, and Malaysia will never get anywhere near considered as the primary building material for any government funded building up to three of the share of employment.2 NATIP’s target even in 10 years’ time. storeys high, and for any privately funded buildings used in a public manner, such as elderly care facilities and hospitals.

Mechanisation and automation for the more upstream Back to my earlier question: what will it take to raise the Rotorua District Council, 2015 Implemented a “Wood First” policy which mandates the use of wood for all public buildings in New Zealand the area and encourages all others to think about using wood as an option for construction. sub-sectors is one obvious solution, but are our industry level of innovation in the wood-based sector to enable members embracing this quickly enough? As for the the industry to be perceived as dynamic, knowledge-based furniture industry, it is widely acknowledged that making and forward-looking? I believe that the major enabling Why can’t Malaysia do the same? For a country blessed also like to thank the Minister of Plantation Industries good furniture is labour-intensive, as high quality furniture long-term solutions must again come from policy makers. with abundant natural resources, Malaysia is in an excellent and Commodities, the Ministry officials and all related needs to be finished by hand. This is where embracing a The fact is, many developed countries like Canada, position to innovate and optimise on its wood-based agencies, particularly the Foreign Ministry, the Ministry or design culture could add a lot more value to Malaysia’s Denmark, Finland, Japan, New Zealand, Norway, the UK raw materials. Natural Resources and Environment, the Malaysian Timber natural resources, enabling the industry to produce and the USA have specific government policies on using Industry Board and Malaysian External Trade Development less furniture with the same amount of raw material, timber for public projects. On a separate note, MTC’s funds performed reasonably Corporation who have helped us significantly in fulfilling but earning the same ROI or more. well (averaging 7.95% p.a. since inception) despite the the Council’s objectives all these years. The combined expertise of forward-looking policy makers, debilitating blow dealt to Malaysia’s corporate earnings To partly address these labour-intensive and value- timber industrialists, researchers, innovators and timber when global oil prices spiralled in Q4 2014. On revamping Thank you, too, to all the Council’s Trustees, past and adding issues, MTC has put in place a mechanisation engineers in these countries have resulted in timber being MTC, the Transformation Study that began in Q4 2013 was present, as well as the industry members who have and automation programme for the industry. The used in numerous projects, both public and private. Their completed in Q1 2014, although the board decided to delay supported MTC’s programmes and activities. I wish the Council also started sponsoring the Furniture Design culture of innovation in timber engineering has created its implementation pending the official appointment of the future Chairman, trustees, industry members, management Competition organised in conjunction with the Malaysian a virtuous cycle where timbers have been successfully new CEO for MTC. and staff of MTC all the very best in their endeavours. International Furniture Fair 2015. recommended and used for major structural projects, Keep the esprit de corps alive and I am sure the Council both public and private. Examples include the amazingly The year 2014 is my final year as MTC Chairman. will scale even greater heights in the future. On other fronts, we continued to promote Malaysian beautiful Metropol Parasol in Spain, the Leonardo Bridge I thoroughly enjoyed the four years of service to MTC timber-based products in various markets, particularly in Norway and Treet, the soon-to-be the world’s tallest and would like to sincerely thank all parties that have Datuk Aaron Ago Dagang in Asia, Europe and the Middle East. The Council also timber residential building, in Norway, slated for collaborated and cooperated with the Council in ensuring chairman helped the industry source 64,584m3 of raw materials. completion in 2015. the success of our programmes for the industry. I would 12 13

CEO’s Review of Operations

“mtc was set up to serve the malaysian promoting trade timber industry, and it is important MTC continued to be active in trade promotion in 2014. that it continues to do so with a A major highlight in our trade promotion calendar is the sense of purpose, and with integrity, mounting of two marketing missions: one to Qatar, Oman especially in ensuring that the and Kuwait (7-13 November) and the other to the USA council’s government-sponsored (10-16 November), both of which garnered a total of RM6 funds are spent responsibly to serve million of immediate sales for the industry participants.

the whole industry.” Apart from marketing missions, we organised the participation of industry members in three trade fairs: Indiawood datuk yeo heng hau (3 companies), Export Furniture Exhibition (4 SME’s) and Index ceo Mumbai (10 companies), generating total sales of RM5 million for these companies. In response to industry members’ needs, Overall, global growth is expected to rise modestly, to 3.0% we cancelled two group participations in MosBuild, Moscow, in 2015, and average about 3.3% through 2017. High-income Russia (1-4 April ) and Woodshow, Dubai, UAE (8-10 April). countries are likely to see growth averaging 2.2% in 2015 – 2017 MTC also replaced the group participation in Index Dubai, UAE (cf. 1.8%: 2014) on the back of gradually recovering labour (19-22 May) with Index Mumbai, India (9-12 October), again Visiting a timber yard in Dubai (January 2014) markets, ebbing fiscal consolidation, and still-low financing after consultation with the industry. costs. In developing countries, growth is projected to gradually increase, from 4.4% in 2014 to 4.8% in 2015 and 5.4% by MTC also assisted the industry-led Market Advisory Committee was a talk on the impact of the Good and Services Tax on the 2017 due to easing domestic pressure and the slow but strong (MAC) to facilitate trips by TEAM (sawntimber), MWMJC timber industry, which served 188 industry attendees, a record recovery in high-income countries. Lower oil prices spell (mouldings and BCJ) and PEKA (school/garden furniture, BCJ, doors turnout for MTC-organised events. diverging prospects for oil-exporting and -importing countries, and flooring) to the Philippines, Denmark and Algeria respectively, particularly in 2015. indirectly enabling the participants to conduct business at the same developing the industry time as collating market information for the industry. The construction of a demonstration glulam pedestrian bridge The export of Malaysian timber and timber products improved in Putrajaya, in collaboration with Putrajaya Corporation, by 5% to RM20.5 billion, partly due to a weaker Ringgit versus Timely market intelligence for the industry is also important, gained momentum in 2014. A turn-key contractor has been the US Dollar. All sub-sectors, except for plywood, particleboard and on this we put up promotional booths in 13 trade fairs in appointed to construct the bridge, which would take 18 months and MDF, registered positive performance. Wooden furniture 2014, to promote trade and to gather market intelligence. We to complete (circa Q3 2016). To ensure that the bridge would topped the list, chalking RM6.3 billion or 30.8% of the total delivered 21 separate market surveys to the industry which be structurally safe, MTC has engaged a timber engineer from timber-based exports in 2014. Plywood was the second biggest covered countries like Bahrain, Bangalore, Denmark, France, SWECO, Norway, as an assessor on the engineering details. earner, accounting for RM5.2 billion (25.3% of total exports), Germany, Iran, Kuwait, Lebanon, Libya, Qatar, Oman and Saudi SWECO has built numerous timber bridges, including the world’s followed by sawntimber which registered RM2.5 billion (12.4 % Arabia, as well as China’s timber markets in Dongguan, Furen strongest timber bridge for military loads in Norway, in 2005. of total exports). and Guangzhou. The focus on emerging markets like India, China and the Middle East has been our strategy for several years Another notable initiative includes the pilot test for the fire By region, East Asia remained as the largest market for Malaysian now. Asia is already the global engine of growth accounting for performance of glulam made of Mengkulang, Dark Red Meranti, timber products accounting for 34% of Malaysia’s total timber 66% of Malaysia’s total timber exports, underpinned by a strong Kapur, Merpauh and Yellow Meranti to provide the char rating exports (RM7 billion), followed by North America (14% at population increase and a rising middle class. of each species. The test was carried out by an independent New RM2.9 billion) and ASEAN (13% at RM2.6 billion). By country, Zealand-based research and testing company. The results would Japan, USA and India maintained their position as the top three Keeping in touch with the industry was also done through be fed into the revision of Malaysia’s Uniform Building By-Laws leading export destinations for Malaysia’s timber products. briefings, factory visits and dialogues. One well-attended event to promote the wider use of timber in building construction. 14 15

CEO’s Review

of Operations MTC Talk and Tree Donation at SMK Bandar Sunway (September 2014)

Work on the Glulam Quality Manual and the Glulam Quality supplementing raw material supply ensuring market access Resort in Morib which provided a fun setting for the Mark continued in 2014. The importance of this is to certify In 2014, MTC facilitated the import of 64,584m3 of logs, A major highlight in this area of our work in 2014 is our teenage students to learn about mangrove forests. manufactured glulam based on the right production standards sawntimber, veneer, plywood, MDF and particleboard by 130 engagement with the Dutch Timber Procurement Action (which also involves safety aspects particularly for structural Malaysian companies (cf. 2013: 125 companies/59,145m3) Committee (TPAC)1 . We successfully collaborated with Another notable awareness programme was the mtc applications). MTC has engaged a third party certification through the Council’s Import Assistance Programme. The external timber-related third parties in promoting Familiarisation Programme for trade journalists from body to assist the glulam manufacturers in obtaining the Malaysian Furniture Council members benefitted the most Malaysia’s interests through MTCS under the Dutch TPAC. Malaysia (1), China (3), India (2) and Singapore (2) in October. MTC Glulam Quality Mark. from the IAP facilitation, with 29,835 m3 or 46% of the total. This resulted in a Dutch Ministerial delegation’s visit to The programme focused on Malaysia’s sustainable forestry Malaysia in June 2014 for discussions with the Minister of practices, certification efforts, timber industry, plantation MTC’s Mechanisation and Automation study on five furniture We continued to see a wide range of species imported by the MPIC, MTC and the Malaysian Timber Certification Council development programme and conservation efforts. companies and three sawmills as test partners was completed in industry - which include Agathis, Balau, Beech, Birch, Cherry, on finding ways forward. After this visit, the MTCS was The core message was that Malaysia has been doing its 2014. After implementing the consultant’s recommendations, Cypress, Jarrah, Kempas, Oak, Okoume, Paulownia, Poplar, ‘conditionally’ accepted under the Dutch Public Procurement utmost to balance the commercial, environmental and social the test partners reported improved productivity of 5-20% Radiata Pine, Red Cedar, Rubberwood, Sapele, Seraya and Programme, provided current perceived gaps were closed demands on its natural resources in the best possible way. and cost savings of 5-25%. One furniture company reported cost Teak – which speaks volumes of the programme’s success in by a full TPAC assessment of the MTCS by June 2016. All the journalists left with positive impressions of the savings of RM20,000 per month. With such significant impact, encouraging exotic timber imports for value-adding. Malaysian forestry and timber industry, and by December this project would be continued into 2015 with eight new MTC continued to provide strong support to MPIC in 2014, four positive articles written by three journalists industry test partners. To facilitate sourcing, MTC also organised two raw material national, regional and international meetings on matters from China and Singapore had been published. missions to Vietnam (Hanoi and Ho Chin Minh), and one related to sustainable forestry and sustainable/legal timber Another highlight in MTC’s timber industry development each to China (Shanghai) and Indonesia (Medan). In total, in 2014, whether through MTC HQ or through MTC London. A further highlight in MTC’s communications work was the programme is the organisation of a Technology Acquisition 48 Malaysian companies participated and benefitted from MTC has done a lot of advocacy work in developing allies complete revamp of the MTC website (www.mtc.com.my), Mission on timber frame housing to Australia. Following the these missions, either by being exposed to new woodworking in environmentally sensitive markets since 1992, and this giving it a fresher, more contemporary look and feel. Vast mission (also participated by JKR, MTIB, CIDB and MIDA), machinery (for mission in conjunction with Woodexpo has been crucial in ensuring unimpeded and fair access for amount of information has been collated and reorganized. the Ministry of Urban Wellbeing, Housing and Local Shanghai 2014) or to new suppliers of raw materials. Malaysian timber products. Published in October 2014, the website features five pillars Government started to seriously consider adopting the timber of information to cater to various stakeholders’ needs i.e., frame system for their mass housing projects. This means Closer to home, the Council has also been active in supporting Malaysian Timber Legality & Sustainability; Malaysian opportunities for Malaysian timber manufacturers who would MPIC in terms of providing inputs and information for national Timber Species & Applications; Programmes for Industry; like to start producing timber frames for local construction. and regional initiatives, and on matters like the EU-FLEGT, Publications & Resources; and Timber Awareness & and the Malaysian Country Specific Guidelines under the Education. There is also a secure Members’ Section on market MTC’s Guidebook on Incentives for the Wood-based Sector, Australian Illegal Logging Prohibition Act 2012. intelligence, reports and specific programmes exclusive to which provides a comprehensive listing of all the existing Malaysian timber industry members. Since the revamp, traffic financial incentives, was updated and sent to all timber trade It is important to note that without continuous advocacy to the website has increased by over 300%! Now that the associations in 2014, to raise industry members’ awareness efforts, it is highly likely that Malaysian timber products would website has been revamped, MTC would also be looking on incentives they can avail themselves of. be tarred with the same brush that discriminates against at social media like Facebook, Twitter and Pinterest, mainly products from less environmentally-responsible countries. to drive further traffic to the website, in 2015.

raising awareness We continued to proactively engage with the media (local/ The highlight of our programmes on raising awareness on foreign and trade/mainstream), to foster better understanding sustainable forestry and timber’s ‘green’ credentials was our of and appreciation for the Malaysian forestry and timber continued collaboration with the Sri Aman Environmental industry. This resulted in the publication of 133 news items Youth Leadership Summit, which saw the participation on MTC’s programmes and activities through print and online of 20 schools from seven nations i.e., Malaysia, Indonesia, media. MTC’s returns in terms of Advertising Value Equivalent MTC- UiTM testing of Mengkulang for development of first Thailand, Brunei, Laos, Philippines and Denmark. in 2014 was in excess of RM3.7 million which is 1,625% over span table for glulam (January 2014) We sponsored a beach clean-up at Bakaugruv Kampung our investment of RM229,298. 16

Top Officiating at the MIFF Furniture Design Competition Workshop (August 2014)

RighT Presiding over deliberations during MTC’s Workshop on Raw Material Procurement Strategies (August 2014)

partnering purpose with integrity This is my final year as MTC CEO, and I would like to thank In terms of the Council’s earnings in 2014, MTC’s the Minister of Plantation Industries and Commodities, the Endowment Fund registered a growth rate of 7.8% p.a. Chairman and the Board of Trustees for the opportunity to since inception, while the Operating Fund, a commendable serve in this capacity for two years. I would also like to thank 8.1% p.a. (cf. 8.4% and 8.7% p.a. respectively for 2013), the trustees, Ministry officials, sister agencies, management due to the massive sell-down in Bursa Malaysia in Q4 2014, and staff for their kind support and cooperation in helping which generally wiped out most corporate earnings in the me realise the Council’s vision, mission and objectives. first three quarters of the year. In the final quarter of 2014, the Investment Management Committee approved a small MTC was set up to serve the Malaysian timber industry, Operations project to study how the Endowment Fund’s risk-return and it is important that it continues to do so with a sense of profile could be improved by adjusting its strategic asset purpose, and with integrity, especially in ensuring that the allocation, particularly between equities and fixed income. Council’s government-sponsored funds are spent responsibly The study will be carried out in 2015. to serve the whole industry. MTC has so much potential to Review become a formidable trade promotion agency, and with the right leadership helming the council, I am sure MTC is able 1 This is related to MTC’s initiation to achieve so much more than what it has so far. of the EU Infringement Procedure against the Netherlands for excluding the Malaysian Timber I wish the Board, management and staff all the very best in Certification Scheme (MTCS) the Council’s future endeavours. from TPAC’s list of approved certification schemes in 2013. Datuk Yeo Heng Hau chief executive officer 18 19

Performance

of the Malaysian 1.6% Particleboard 1.5% Veneer 3.5% Mouldings 0.6% wooden Frame 0.2% ratten Furniture 4.9% BJC Timber Trade 30.8% Wooden Furniture 4.8% Fibreboard malaysian export of 2014 major timber products (2010-2014) export of 10.1% Logs 2010 2011 2012 2013 2014 major timber

7.0 products total RM20.5 Billion 6.0 12.4% Sawntimber 30.3% Others 20.2% Japan 4.2% Others 5.0

4.0 25.3% Plywood illion 2014 M B M

R top 10 markets 3.0 2.9% Thailand for timber products 11.8% USA 3.7% United Kingdom 2.0 total 3.8% China RM20.5 Billion 8.6% India 1.0

4.8% Taiwan

4.4% Australia 0 4.7% South Korea 4.6% Singapore logs sawntimber plywood venEer mouldings particlebOArd fibREboard bcJ furniture others

The global economy grew at 3.3% in 2014. The pickup was particleboard and MDF. Wooden furniture remained as the aided by a return to growth in the Eurozone, where economic biggest export item contributing RM6.3 billion or 30.8% of logs output rose 0.9%, having contracted by 0.5% in 2013. The US the total timber exports in 2014. This was followed by plywood, The total export of logs from Malaysia increased by 10.9% in 3 economy grew faster than previously expected, notching an sawntimber, logs and Builders’ Carpentry and Joinery (BCJ) value to RM2.1 billion and 1.9% in volume to 3,218,515m annual growth rate of 2.4%. In contrast, China’s rate of expansion which accounted for 25.3% (RM5.2 billion), 12.4% (RM2.5 in 2014. The top three markets for Malaysian logs were India, slowed to 7.4% from 7.7% in 2014 while Japan struggled to billion), 10.1% (RM2.1 billion) and 4.9% (RM1 billion) of the Taiwan and China. Accounting for 61.5% of Malaysia’s total log 1.1% south Korea 0.7% Thailand exports, India’s uptake of logs rose 14.1% to RM1.3 billion and strengthen their weak recovery, posting a 2.2% GDP growth total timber exports, respectively. 0.8% Philippines 0.1% Singapore 1.7% in volume to 1,819,101m3. Malaysia overtook Myanmar well below the 3.6% growth forecast by economists in 2014. 1.8% Indonesia 0.2% Others The Malaysian economy performed exceptionally well last year By region, East Asia continued to be the largest market for 4.6% Vietnam to become the biggest exporter of logs to India. This was mainly 7.7% Japan with real GDP growing right on the target of 6% per annum. Malaysian timber products accounting for 34% of Malaysia’s due to Myanmar’s imposition of a log export ban since 1 April total timber exports (RM7 billion) followed by North America 2014 2014. India relies heavily on imported logs as domestic raw export of materials are scarce to fuel its timber industry. The Malaysian timber sector contributed 2% of the Malaysian (14% at RM2.9 billion), ASEAN (13% at RM2.6 billion), 10.2% China logs to top 10 GDP and 2.7% of the country’s total merchandise exports. South Asia (10% at RM2.05 billion), European Union (10% countries Taiwan and China maintained their ranking as the second and The export of Malaysian timber and timber products registered at RM2.04 billion), West Asia (9% at RM1.9 billion), Oceania total a positive growth of 5.1% with total exports of RM20.5 billion. (5% at RM983.3 million) and Africa (3% at RM636.9 million). RM2.1 Billion third largest markets for Malaysian logs, accounting for 11.2% 11.2% Taiwan The timber sector is the 5th largest export earner after crude By country, Japan, USA and India maintained their position as and 10.2% respectively. Exports to Taiwan increased 3% to 3 petroleum; electrical and electronic products; palm oil and palm the top three leading export destinations for Malaysia’s timber RM232.3 million but decreased 10.8% in volume to 331,995m oil-based products; and rubber and rubber-based products. products. Value wise, export receipts to Japan fell slightly indicating an increase in log prices. Exports to China grew by by 0.1% to RM4.1 billion while exports to USA and India 4.5% to RM211.7 million due to the growing demand from the 61.5% India The increase in exports was attributed to the positive registered a 5% (RM2.4 billion) and 15.8% (RM1.8 billion) domestic sawmilling and veneer industry. performance of all sub-sectors except for plywood, increase, respectively. 20 21

Performance of the Malaysian Timber Trade

13.1% Others

1.6% Egypt 32.1% Others 15.9% Thailand 1.7% Mexico

1.9% Australia

2.4% USA 2014 3.6% United export of 2014 11.2% China Kingdom plywood to export of top 10 countries 51.0% Japan sawntimber to 4.0% Yemen top 10 countries plywood total RM5.2 Billion total Plywood exports saw a slight drop of 2.3% to RM5.2 billion 3 RM2.5 Billion and volume-wise it fell 8.8% to 3,099,371m in 2014. More 4.2% Philippines 3.8% saudi Arabia 7.6% Netherlands The Netherlands was the third largest buyer of Malaysian than two-thirds of Malaysian plywood worth RM3.7 billion 7.6% Taiwan 4.2% south Africa 5.9% Japan sawntimber. Shipment of sawntimber to the said country saw an were exported to East Asia while 8.1% (RM421.3 million) was 3 9.0% south Korea 4.2% Yemen 5.3% Taiwan increase of 41.2% to RM193.8 million and 33.6% to 71,747m . exported to ASEAN and 7.8% (RM406.6 million) was shipped Such positive growth was driven by the Dutch construction to West Asia. 4.8% UAE 4.9% Singapore sector which picked up pace last year owing to the strengthening of its economy. Japan maintained its position as the single largest market for Malaysian plywood, accounting for 51% of total exports. sawntimber Export of Malaysian sawntimber to Japan in 2014 rose slightly The value of export receipts from Japan grew by 1.3%, Malaysia’s export of sawntimber increased by 5.5% to RM2.5 by 4.4% to RM149.6 million but contracted 6% in volume to equivalent to RM2.6 billion. However, in terms of volume it billion but slipped in volume by 0.3% to 1,893,949m3 as 73,741m3. Japan was the fourth largest market, accounting for has dropped 7.9% to 1,495,190m3 mainly due to the increase compared to the previous year. East Asia and ASEAN upheld 5.9% of Malaysia’s sawntimber exports. Most popular Malaysian in consumption tax of 6-8% in April 2014 which caused their position as the two biggest markets for Malaysian sawntimber species in the Japanese market were Keruing, Kapur uncertainties amongst Japanese importers as well as the sawntimber amounting to RM634.5 million and RM625.7 and Meranti. campaign by the Japanese government through its Wood million respectively. Shipment to East Asia improved 11.1% in Utilization Point System to promote the usage of domestic value terms owing to the rising demand from China and Taiwan. United Arab Emirates, the seventh largest market for Malaysian timber species in the manufacture of timber products Imports by ASEAN, however, declined 10.2% mainly due to sawntimber, accounted for 4.8% of Malaysia’s total sawntimber including for plywood production. Thailand’s slower construction activities, which were aggravated exports in 2014. Exports to UAE recorded an impressive growth by its volatile political situation. of 10.8% in value to RM121 million and 10.8% in volume to The second and third largest markets for Malaysian plywood 80,358m3 due to the stability of timber prices especially for were South Korea and Taiwan, respectively. South Korea As the largest buyer of Malaysian sawntimber, Thailand Malaysian Meranti. accounted for 9% of Malaysia’s total plywood exports. However, accounted for 15.9% of Malaysia’s total sawntimber exports in shipment to South Korea fell 9% to 310,066m3 at the value 2014. However, export receipts from Thailand shrank by 16.6% A total of 67,106m3 of Malaysian sawntimber was shipped to of RM470.5 million. This was possibly due to the country’s to 384,724m3 valued at RM405.7 million. South Africa with a value of RM107.7 million in 2014. However, imposition of anti-dumping duties on Malaysian plywood since this was a drop of 4.8% in volume and 13.2% in value, partly due 2011. Taiwan accounted for 7.6% of Malaysia’s total plywood In contrast, exports to China, the second largest importer of to the country’s slow economic growth rate since the recession exports. Taiwan’s uptake of Malaysian plywood plummeted both Malaysian sawntimber, has been on an upward trend accounting in 2009 and the weakening of its local currency, Rand, against in value and volume terms by 11.3% to RM395 million for 11.2% of Malaysia’s total sawntimber exports. China’s import the US Dollar. Nevertheless, Malaysian Meranti remains the and 13.2% to 269,814m3 respectively. On the contrary, of Malaysian sawntimber surged by 13.6% to RM283.9 million highly preferred choice of sawntimber in the market for its Taiwan imports of Chinese and Indonesian plywood increased and 12.2% in volume to 209,045m3 respectively in 2014. quality, characteristics and consistency in supply. 17.9% and 36.5%, respectively. 22 23

Performance of the Malaysian Timber Trade

veneer medium density fibreboard (mdf) 24.3% Others 21.2% Japan Export of veneer strengthened in value terms by 5.8% to The export of MDF ended on a low note with exports falling RM304 million whereas the volume of exports shrank 1.6% to 3.1% to RM995 million and 8.9% in volume to 953,975m3. 216,926m3. East Asia remained the largest market commanding The export decline is notable in West Asia, the biggest market more than 90% of Malaysia’s total veneer exports. The veneer for Malaysian MDF, with exports declining 4.3% to RM383.9 2014 export of exports to East Asia rebounded 5.7% to RM278.4 million due to million and 10.8% in volume to 421,356m3 respectively. mdf to the rising demand especially from China for the manufacturing This was partly due to Middle Eastern traders and end-users top 10 countries 3.7% USA 13.5% UAE of timber products such as engineered wooden flooring. preferring to buy cheap MDF as the market is price sensitive. total 3.7% Kuwait RM995 million

Taiwan maintained its ranking as the largest market for Similarly, exports to East Asia retracted 14.6% to 163,467m3 4.1% Indonesia

Malaysian veneer, accounting for 43.4% of the total Malaysian and 13.4% in value to RM234 million respectively. The decline 4.4% Iran veneer exports. This was despite a downtrend in exports since in export was largely due to competition from Thailand. 4.5% Australia 8.2% saudi Arabia 2011, which saw the export value dropped 9.6% to RM131.9 4.6% Pakistan million and 11.6% to 100,205m3 respectively. Taiwan’s veneer By country, Japan remained as the largest market accounting for 7.9% Vietnam imports dipped 1.2% to RM331.9 million in 2014, due to slower 21.2% of Malaysia’s total MDF exports but its uptake dropped economic activities. 15% to 140,863m3 and 14.6% to RM211.1 million, respectively. In contrast, Japan’s import of MDF from New Zealand saw an South Korea, the second largest market, accounted for 31.9% 1.0% India 1.0% Others increase of 8.7% to RM461.9 million. of Malaysia’s total veneer exports, registering a healthy rebound 1.6% Philippines 0.4% Vietnam 3 1.7% USA of 26.8% to RM97 million and surged 13.2% to 75,133m . 0.6% Italy UAE, the second largest market for Malaysian MDF, accounted 2.5% Australia South Korea’s overall import of veneer was on the uptrend for 13.5% of the total MDF exports in 2014. Exports to UAE 4.7% China 3 increasing 7.4% to RM411.9 million. Malaysia was the second 11.3% Japan 2014 grew by 18.4% to RM134.3 million and up 9.6% to 153,347m largest veneer supplier contributing 27% of the market share, export of due to increasing demand in interior joinery works for its robust behind China. veneer to fit-out industry. Exports to Saudi Arabia, the third largest market top 10 countries 43.4% Taiwan was down 12.9% to RM81.1 million and down 19.7% in volume total 3 Japan accounted for 11.3% of Malaysia’s total veneer exports. RM304 Million to 84,836m . Iran has shown a small recovery in MDF demand. Export to Japan registered a notable growth of 31.6% in value As the seventh largest market for Malaysian MDF, exports to Iran to RM34.4 million and 16.9% in volume to 15,189m3. Japan’s improved 5.1% to RM43.5 million but eased 1.2% in volume to overall import of veneer increased by 5.23% to RM493.7 million 49,325m3. Malaysia’s MDF export to Iran is expected to rise to fulfill the requirement and growing demand of its local with the lifting of US sanctions. plywood industry. 31.9% south Korea 24 25

23.5% Others 13.9% united Kingdom Performance 13.1% Australia of the Malaysian 2014 export of bcj Timber Trade to top 10 2.7% Vietnam countries 3.2% Thailand total RM1 Billion

3.4% Pakistan 12.2% Singapore

5.4% Belgium 8.5% Japan

6.3% India 7.6% USA

mouldings builders’ carpentry and joinery (bcj) wooden furniture Malaysia’s mouldings exports rebounded 14.9% to RM711.2 Export of Builders’ Carpentry and Joinery (BCJ) saw an The wooden furniture sector performed remarkably well in million due to increased demand especially from the European increase of 5.3% to RM1 billion in 2014, reflecting the rise 2014 to meet the global demand for furniture with an export Union (EU). In 2014, EU retained its position as the biggest of international demand for quality joinery products such as value of RM6.3 billion, a 10.3% increase compared to the market for Malaysian mouldings, contributing 41.4% or wooden doors and wooden flooring. previous year. RM294.4 million. East Asia, the second largest market contributed 21.5% of the total export value amounting Europe was the largest market for Malaysian BCJ amounting The USA retained its position as the single largest market for to RM153 million, an increase of 12.2% compared to the to RM269.5 million but the exports dropped 0.1% over the Malaysian wooden furniture, accounting for 31.3% of Malaysia’s previous year. previous year. This was despite reports that Europe recorded total wooden furniture exports. The USA imported RM2 billion the highest GDP growth rate in the third quarter of 2014 since worth of Malaysian wooden furniture, registering an increase The Netherlands, which accounted for 20.6% of Malaysia’s total the economic crisis in 2008. The second largest market by of 9.3% compared to the previous year. The overall import mouldings exports, registered an impressive growth of 30.3% region for Malaysian BCJ was ASEAN which expanded 5% to a of furniture by the USA rose 7.7% in 2014 to RM44.9 billion. to RM146.6 million. The Dutch mouldings sector showed a total export value of RM210.2 million in 2014. The biggest furniture exporters to USA were China with an stable increase in 2014 attributed to healthy growth in the export valued at RM22.9 billion and Vietnam at RM8.3 billion home improvement, refurbishment and DIY sectors. Other Country-wise, the United Kingdom maintained its position while Malaysia was ranked the fifth largest exporter of wooden 11.9% Others 20.6% Netherlands major exporters of wooden mouldings into Netherlands were as the leading importer of Malaysian BCJ. Rapid rise in house furniture to the USA. Indonesia, Germany and China. buildings with the recovery of London’s commercial activities 2.6% France enabled Malaysia’s export of BCJ to the UK to surge 21.6% to Japan, the second largest market for Malaysian wooden furniture 3.6% Belgium Australia was the second largest mouldings market for Malaysia RM139.2 million. Malaysia was the sixth largest supplier of BCJ accounted for 8.9% of Malaysia’s total wooden furniture exports. accounting for 17.4%. Mouldings exports to Australia registered to the UK. Exports to Japan slackened slightly by 1% to RM565.4 million. 3.9% Singapore 2014 export of an increase of 17.2% to RM123.9 million. In 2014, Malaysia was The top two exporters of wooden furniture to Japan were China 4.1% United Kingdom mouldings to the fourth largest exporter of mouldings to Australia behind The second biggest market for Malaysian BCJ was Australia and Vietnam, accounting for to RM3.9 billion and RM1.6 billion, top 10 countries Indonesia, New Zealand and China. contributing 13.1% of Malaysia’s total BCJ exports at RM131.5 respectively. Overall, Japan’s import of wooden furniture saw an total million, a 5.8% increase compared to the previous year. Malaysia increase of 4.2% to RM8 billion in 2014. RM711.2 Million was the fourth largest exporter of BCJ to Australia behind China, New Zealand, and USA. Australia was the third largest market for Malaysian wooden 5.9% south Korea furniture, contributing 6.9% of the total wooden furniture 8.0% Germany 17.4% Australia Export to the USA, the fifth largest market for Malaysian BCJ, exports in 2014. The wooden furniture exported to Australia 9.3% USA 12.8% Japan registered an increase of 37.5% to RM76.2 million as housing saw a 2.1% increase in export value to RM433.7 million, construction improved. The US housing starts in 2014 reached amidst increased demand for furniture in the residential and the 1 million mark for the first time since 2007. commercial development of the country. The United Kingdom, the fifth largest market for Malaysian wooden furniture, increased its imports by 21.8% to RM322 million. Export of 26 27

28.4% Others 31.3% USA

2014 export of Promoting & wooden furniture to top 10 countries 1.8% South Developing the Korea total 2.2% India RM6.3 Billion

2.3% saudi Arabia 8.9% Japan Timber Industry 3.4% UAE 6.9% Australia 4.2% Canada

5.1% united Kingdom 5.5% Singapore events such as UAE’s Expo 2020 and Qatar’s FIFA 2022 would create a boon for the construction sector and interior fit-outs, 2014 trade fair calendar hence increasing the need to import building materials including Participation in Trade Fairs timber and timber products. Furthermore, the governments MTC’s participation in international trade fairs is one of the furniture to UAE, the seventh largest market, improved 4.8% of the UAE and Qatar have adopted green building codes, most cost-efficient ways for promoting Malaysian timber to RM216.5 million. Malaysian furniture is favorable in the UAE requiring public projects to procure sustainable building products and strengthening networking, apart from creating given its competitive pricing and good quality finishing. materials including certified timber products. awareness on Malaysia’s sustainable forestry management policies, gathering market intelligence and generating trade 2015 outlook India is expected to grow at 6.3% in 2015 and 6.5% in 2016 enquiries. Participation in trade fairs is usually combined Malaysia is likely to see improvement in the export of timber due to the promising reforms of the new government coupled with a market visit/survey, which often involves meetings and timber products in 2015 as global growth is expected to with the increase in industrial and investment activities in India. with local companies and timber-based associations. rise moderately to 3.0% in 2015. Therefore, demand for timber and timber products is anticipated Trade enquiries and intelligence gathered through these to increase. activities are passed on to the members of the Malaysian The US economy is expected to sustain a 3% growth rate in timber industry through their associations, or debriefing 2015. Unemployment rate is expected to fall to an average of The World Bank reported that the Chinese authorities are sessions, where necessary. 5.8% in 2015. Stronger job recovery would allow the millennials making progress in making reforms in monitoring credit growth to form households and increase the number of first time to maintain a balanced and sustainable economic growth. China MTC facilitated the participation of industry members in buyers. However, an anticipated hike in interest rates in 2015 is going “green” as their community is now more concerned three trade fairs in 2014, as follows: is a downside risk. Existing home sales are expected to improve on health issues. One of the significant trends is the growing MTC Timber Marketing Mission to Qatar, Oman and Kuwait (7-13 November) by 8% in 2015. New home sales are set to increase by 25% demand for home products made of E0 and E1 formaldehyde in 2015 (from their current rate of approximately 440,000 emission standard raw materials. Apart from that, new property no. of Total Products No. of Trade units). A total of 1,158,000 housing starts with single-family developments are concentrated in the second and third-tier date & participants PLUS Estimated Sales Displayed Enquiries production of 801,000 units are forecasted in 2015. Such cities whereas the main buyers for furniture are in first-tier Trade Fair VENue productS displayed Generated (RM) at MTC Booth Received by MTC improvement in the US housing market is expected to boost cities. The third and fourth-tier cities are considered as the new Indiawood 21-25 February 3 companies Immediate sales: Plywood, MDF, particleboard, 62 demand for imported timber and timber products. potential markets for doors, wooden flooring and furniture. RM1.12 million decking, solid wood flooring, Bangalore, India Products displayed: Solid laminated flooring and mouldings. Children furniture market has grown from zero to 18% as China wooden doors and sawntimber. The European Central Bank is focused on tackling deflation. relaxed its one-child policy. The IMF expects a mild recovery in the eurozone to continue. Export 5-8 March, 4 SME companies Immediate and Furniture N.A. Furniture KLCC potential sales: It is estimating a growth of 1.2% in the eurozone in 2015 and conclusion Exhibition Convention MFPC’s Pavilion for their RM1.26 million 1.4% in 2016. German construction activity has been on the In 2015, the export of timber and timber products is expected (EFE) Centre, ‘Malaysia Pride’ exhibits rise since the second quarter of 2013 and is expected to remain to increase to RM21 billion. This will be mainly driven by the KL, Malaysia optimistic in 2014 and 2015 which might lead to improved higher export of value-added products including furniture to INDEX 9-12 October 10 companies Immediate sales: Plywood, MDF, particleboard, 25 demand for Malaysian timber and timber products. improving big economies like the USA, Japan and India as well Mumbai RM2.62 milion decking, flooring (solid wood, Mumbai, India Products displayed: Living, engineered, laminated) and as the depreciation of the Ringgit. Over the years, Malaysia has bedroom and dining room mouldings. IMF expects economic growth for the Middle East and North built up its reputation as a reliable supplier of quality timber sets, sofas, baby cots and Africa region to hit 3.3% in 2015. With depressed prices, oil products. The principal challenge is to sustain this position and outdoor furniture export losses in 2015 are expected to reach about US$300 be more responsive and adaptive to today’s ever-changing global billion or 21% of GDP in the GCC. Upcoming international market environment. 28 29

market visits & surveys Visits to selected markets are another major component of MTC’s trade promotional programme. Sometimes these visits are coupled with a seminar by MTC to provide an introduction/ Promoting & update on the Malaysian timber industry in order to capitalise on pre-arranged meetings with a bigger group of potential business Developing the and networking partners. In 2014, the places where market visits Timber Industry were conducted include the following:

Conducted by VENUE Date Frequency Staff from MTC HQ and MTC Regional Offices in London, Guangzhou and Dubai participated in a total of 13 trade fairs in 2014, as follows: MTC HQ Bangalore, India* 26-27 Feb 1 MTC France & Germany 2-12 June 1 Products No. of Trade London date & Participation Displayed Enquiries (together with MPIC Trade Fair Venue by at MTC Booth Received by MTC Secretary-General)

Malaysian International 4-8 March MTC HQ MTC promotional publications 6 Market Research 28 Sept - 1 Furniture Fair (MIFF) PWTC and MIECC and samples of timber species Mission to Denmark 30 Oct KL, Malaysia suitable for furniture-making. (together with MWMJC)

Ecobuild 4-6 March MTC HQ MTC and MTCC/PEFC promotional 10 NAWLA Traders Market, Chicago, Illinois, USA (12-14 November) MTC • Guangdong’s Various dates 9 London, UK publications, TEAM directory Guangzhou Yuzhu International Timber Market Malaysian Export 5-8 March MTC HQ MTC promotional publications. N.A. Visit to Trade Fairs • Dongguan’s Xingye Furniture Exhibition KLCC Convention Centre Samples of timber species suitable Visits to trade fairs are important for intelligence gathering, Plywood Timber Market (EFE) KL, Malaysia for furniture-making particularly on the latest innovations and trends for timber • Shanghai’s Furen Timber Market DOMOTEX 25-27 March MTC Guangzhou Sawntimber, MDF and 14 products and building materials. These visits are usually Shanghai, China wooden flooring conducted by staff of MTC Regional Offices in London, MTC Qatar 6-9 Jan 1 Dubai Oman 2-5 Feb 1 Fensterbau / Frontale 26-29 March MTC London MTC and MTCC/PEFC promotional 59 Guangzhou and Dubai. The information and trade enquiries Nuremberg, Germany publications, TEAM directory (41 Trade & gathered are disseminated to the industry members through Lebanon 20-24 March 1 18 General) their respective associations. In 2014, MTC provided market Libya 16-25 May 1 reports based on visits to the following fairs: Dubai Woodshow 8-10 April MTC Dubai Flooring, doors, plywood, 85 Iran 22-26 June 1 Dubai, UAE MDF & sawntimber Kuwait (cum recce 21-29 Sept 1 4th China Wood Expo 18-20 May MTC Guangzhou Sawntimber, MDF and 32 Visits by Trade Fair Venue Date for MTC Business Visit) Shanghai, China wooden flooring MTC Dubai Interior, Design, Decor Oman 3-5 Oman and Bahrain 16-22 Oct 1 & Furniture Expo February Libya Build 19-22 May MTC Dubai Flooring, doors, plywood, 30 (recce visit) Tripoli, Libya MDF & sawntimber Outdoor Build & Dubai, 31 March- Algeria (recce for PEKA 26-30 Oct 1 Supply Exhibition UAE 2 April MRV cum Market Survey) Carrefour International 4 -6 June MTC London MTC and MTCC/PEFC promotional 27 du Bois Nantes, France publications, TEAM directory INDEX Dubai Dubai, 19-22 Algeria (together 23-27 Nov 1 UAE May with PEKA Market Spoga+Gafa 30 August-2 September MTC London MTC and MTCC/PEFC 15 The Hotel Show Dubai, 28-30 Research Visit) Cologne, Germany promotional publications UAE September Saudi Arabia 16-23 Dec 1 The Big 5 Kuwait 22-24 September MTC Dubai Flooring, doors, plywood, 36 The Big 5 Exhibition Dubai, 17-20 (Furniture Market Kuwait MDF & sawntimber UAE November Research Visit) Bahrain 27-30 Dec 1 4th China-ASEAN Wood 25-28 September MTC Guangzhou Sawntimber and wooden flooring 6 MTC CIFF/Interzum Guangzhou, 29-30 & Wood Products Nanning, China Guangzhou China March Wood Expo Guangzhou, 12-14 * In conjunction with MTC’s participation in Indiawood with Timber Expo 7-8 October MTC London MTC and MTCC/PEFC 8 China May industry members. Birmingham, UK promotional publications Furniture China Shanghai, 10-13 China September Findings from these visits were disseminated to the industry

Due to lack of interest from industry members, MTC did not in Index Dubai, UAE (19-22 May) with Index Mumbai, India 4th Global Timber Qingdao, 15-16 either through debriefing sessions or the timber-based organise two group participations in MosBuild, Moscow, (9-12 October) after consultation with the Malaysian and Wood Products China September associations. Over and above these market visits, staff of MTC Russia (1-4 April) and Woodshow, Dubai, UAE (8-10 April). Furniture Council (MFC) on 16 April and subsequently was Trade Conference HQ, MTC London, MTC Guangzhou and MTC Dubai also Hence, these group participations were converted into approved by the MAC. This was due to the lack of interest attended relevant trade-based seminars and briefings in their promotional booths undertaken by the respective MTC from the furniture companies in the said fair owing to high Reports and enquiries generated on all of the above were respective areas of operation. Findings from attendance at regional offices. MTC also replaced the group participation participation cost. disseminated to MPIC, MTC HQ and the industry associations. such forums were also channeled to the industry. 30 31

Promoting & Developing the Timber Industry

market intelligence & networking Market Advisory Committee (MAC) The MAC is an advisory committee to the Board and its functions include reviewing Malaysia’s markets for timber products and CLOCKWISE FROM TOP: formulating marketing strategies for specific markets based on • Timber Expo, Birmingham, UK (7-8 October) • Spoga+Gafa Cologne, Germany (30 August - 2 September) research. It also has an oversight function of Task Forces, created • MosBuild, Moscow, Russia (1-4 April) under MAC, to promote specific timber-based products.The • INDEX Tradefairs, Mumbai, India (9-12 October) following representatives were appointed as permanent and alternate members of MAC for 2014: total potential sales under Organisation/ Alternate Association Permanent Member Member negotiation for malaysian Under the purview of the MAC, the following Market Research companies that participated in MPIC Mad Zaidi Mohd. Karli Nik Mohamed Visits by Timber Associations were carried out in 2014: Husni Nik Ali the (mtc middle east) mission amounted to rm5.5 million. MTIB Mohd Kheiruddin Hjh Robiyah Date of City/Country mission. The programme also comprised visits to four lumber Mohd Rani Hj Husin Meetings & Product Assiociation Held Focus Date yards and a DIY store in Chicago for participants to see various MATRADE Susila Devi Ong Yew Chee TEAM • 7 August Manila, The 9-12 Business Visits/ Marketing Missions for types of wood products being sold in the retail market. Potential MFPC Sarimah Hj Aidrus • 29 August Philippines September the Industry sales under negotiation amounted to RM340,000. Mohamad Sabudin Hj Musa • 27 October Focus: Marketing Missions provide a further avenue for networking by (Debriefing) Sawntimber MWIA Dato’Low Kian Chuan None the Council for the industry. Briefings on the Malaysian timber Ministerial Missions MWMJC • 27 August Copenhagen, 29 September TEAM George Tan None industry and B2B meetings are organised by MTC in close MTC also assists MPIC in arranging visits to relevant timber- • 12 September Denmark -3 October MPMA Dato’ Sheikh Othman None • 22 September cooperation with Malaysian Missions and MATRADE offices related places of interest for Ministerial Missions. Two missions Abd Rahman • 23 October Focus: Mouldings based in those target countries. MTC organised the following that MTC assisted in are as follows: • 27 October and BCJ MWMJC Chin Lee Yen None missions/business visits in 2014: (Debriefing) MFC Sunny Ter None Palm Oil, Rubber, Timber & Pepper Ministerial PEKA • 5 November Algiers, Algeria 23-28 MTC Timber Marketing Mission To Qatar, Oman Mission to India (26 June-1 July) PEKA Ahmad Suradi Adnan None • 18 November Focus:School and November • 9 December garden furniture, and Kuwait (7-13 November) The mission was led by the Minister of MPIC and MTC organised BCJ, Doors and The programme comprised visits to 13 companies/joinery meetings with 19 representatives/members of Timber In 2014, six MAC meetings were held i.e., on 10 January, Flooring workshops in Qatar (4), Oman (5) and Kuwait (4). B2B meetings Importers Association India Ltd, Bombay Timber Merchants’ 11 March, 28 April, 12 June, 4 July and 25 November. with 55 companies were organised by MTC HQ and MTC Dubai Association Ltd and Association of Furniture Manufacturers & Dato’ Low Kian Chuan (MTC Trustee) was appointed MTC provided Secretariat support to each market visit by in Doha, Muscat and Kuwait City. Twelve Malaysian companies Traders, India to discuss India-Malaysia timber products trade by the MTC Board as MAC Chairman for 2014. the associations. All the reports of the completed market participated in the mission. Total potential sales under (28 June). MTC also organised a visit to a furniture showroom visits were prepared and disseminated to other sectors of negotiation for Malaysian companies that participated in the that sells Malaysian furniture in Mumbai (28 June). the industry by MTC. mission amounted to RM5.5 million. Palm Oil, Rubber, Timber & Pepper Ministerial MTC Timber Marketing Mission to USA Mission to China (11-18 September) (10-16 November) The mission was led by the Minister of MPIC. MTC HQ, assisted The Mission was held in conjunction with NAWLA Traders by MTC Guangzhou, organised a visit to Furniture China 2014 at Market 2014, a trade show organised by the North American Shanghai New International Expo Centre on 12 September 2014 Wholesale Lumber Association (NAWLA) in Chicago, Illinois. and Shanghai Furen Wooden Industry Forest Product Wholesale Seven Malaysian companies and MTCC participated in the Market on the same day. 32 33

Promoting & Developing the Timber Industry

events/meetings/presentations/briefings Seminars/Roadshows The MTC CEO together with the directors of MTC, whenever relevant, would meet with the industry members from time

to time, either to brief them on specific topics and market CLOCKWISE FROM LEFT: developments, to apprise them of opportunities in conjunction • Fensterbau / Frontale, Nuremberg, Germany (26-29 March) with other agencies, or to build rapport and maintain its network • Dubai Woodshow, Dubai, UAE (8-10 April) • China International Wood (Shanghai) Fair, Shanghai, China (18-20 June) with the industry. In 2014, a GST talk organised by MTC was • Carrefour International du Bois, Nantes, France (4-6 June) well-attended by 188 participants. A summary of the events to touch base with the industry in 2014 is as follows:

Market Consultants/Correspondents in 2014, a gst talk In order to fully take advantage of market opportunities, organised by mtc was Event Date Venue No. of Participants MTC has engaged market consultants for a few major markets, well-attended by 188 Briefing on Goods and Services Tax (GST) 22 MTC HQ 61 participants from 36 companies and especially where it is too costly for MTC to set up a full-fledged participants. and Related Impending Issues for January 5 related timber associations/agencies Malaysian Timber Industry representative office, or where existing MTC staff do not have the language expertise to operate in that particular market. Factory Visit to Panel Products 27 • Plus Intervest, Batu Kikir 5 MTC officials Manufacturing Companies March • Evergreen Fibreboard, Nilai Market intelligence received through the Consultants’ reports • Dongwha Malaysia, Nilai is directly disseminated to the industry members. The list of Trade Visitors MTC’s Factory Visit to Timber 9 • Victory Enterprise 6 MTC officials market consultants operating for MTC in 2014 is as follows: Apart from attendance at official meetings and events, MTC also Manufacturing Companies in Klang April • Gunung Seraya Wood Products receives trade visitors. A summary of the trade representatives • Vin-Forest Industries Country/ Period of Frequency • Supreme Frame Market Consultant Contract of Reports who visited the MTC HQ and Regional Offices is as follows:

Factory Visit to Palm Wood 24 • Weng Meng Industries, Olak Lempit 3 MTC officials South Africa, Mauritius 01.01.2014- Quarterly No of Trade Origin of & Reunion Island - 31.12.2014 Product Manufacturers April • Step Furniture Manufacturers, Beranang Office Visitors trade visitors • Inception Design and Trading, Sungai Buloh Mr Georges Koo MTC HQ 17 Malaysia, China, Egypt, India, Jordan, Australia - Mr John Bagley 01.01.2014- Quarterly MTC Dialogue with MWIA, TEAM, 9 -11 MTC HQ Collectively, a total of 50 industry members Romania, Singapore, Sri Lanka, UAE MPMA, MWMJC, MFC and PEKA June attended the dialogue 31.12.2014 MTC London 34 European countries and Malaysia Briefing by MTC Regional Directors 12 MTC HQ 35 participants, i.e., 27 industry members Russia - Ms Irina Slepneva 01.01.2014- Quarterly June from 24 companies, 7 from associations 31.12.2014 MTC Dubai 36 GCC countries and Malaysia and 1 from Matrade India - Mr K Baskar 01.07.2013- Quarterly MTC 22 China and Malaysia Briefing by Royal Malaysian Customs 13 MTC HQ No. of attendees: 188 31.06.2014 Guangzhou Department on Goods and Services Tax August No. of timber and furniture companies: 98 (GST) for Malaysian Timber Industry. No. of associations/ agencies: 9 (i.e., MTIB, MWIA, TAS, KLSFEA, The briefing was moderated by a GST TEAM, MPMA, MFC, MWMJC, PEKA) consultant from K-Konsult Group 34 35

Nurturing the Timber Industry expansion/improvement of the industry’s results showed that manufacturing technology base mengkulang has good fire MTC’s Glulam Initiative performance. this species will MTC initiated the development of a glued laminated timber then be used as the main (Glulam) industry in Malaysia starting in 2007. It is envisaged specimen for a full scale that Glulam will become an additional avenue for downstream fire test by branz. value-adding for Malaysian timber products and a new source of growth for the Malaysian timber industry. Over the years, Glulam Quality Manual & Glulam Quality Mark Glulam has gained popularity in Malaysia. MTC’s programmes Since the implementation of the glulam development CLOCKWISE FROM TOP: have been fruitful as specifiers and government agencies such programme, three companies have been set up to produce • Hand-over of “Glulam Tree” to MPIC Glulam for the local markets. However, none of these • MTC’s award-winning booth at ARCHIDEX 2014 as the Kuala Lumpur City Council, Public Works Department • Briefing on results of Glulam pilot test (JKR) and Putrajaya Corporation have shown keen interest in companies are certified to any manufacturing standards. incorporating Glulam in their projects. The following activities MTC is developing a Glulam Quality Mark, to set the right were organised in 2014 to further promote the growth of the standards for Glulam manufacturers based on the MTC Glulam those adopting Malaysian Glulam industry: Quality Manual. Those adopting the Mark will be required to the glulam quality mark conduct regular QC and will be inspected by reputable third will be required to conduct Fire Performance of Glulam – Pilot Test party certification agencies. Among others, a certified Glulam regular qc and will be For certain timber building materials to be accepted as plant is also required to maintain a production manual which inspected by reputable third structural materials and to be used permanently, fire test will be inspected by the third party certification agency during party certification data need to be produced and accepted by the Fire and Rescue audits. MTC is engaging a third party certification body to agencies. Department of Malaysia. These results would fit into the assist the Glulam manufacturers in obtaining the MTC Glulam Quality Mark. revision of the Uniform Building By-Laws to promote the Installation of Glulam Tree at MPIC (25 February) Showcasing Glulam at 15th Archidex 2014 wider use of timber in building constructions. MTC organised The “Glulam Tree” which was constructed as an exhibit for (25-28 June, KLCC Convention Centre) MTC-Putrajaya Corporation Glulam Pedestrian Bridge a pilot test on 5 species, i.e., Mengkulang, Dark Red Meranti, Archidex 2013 and Ecobuild exhibitions found its permanent MTC participated in the International Architecture, Interior Project in Putrajaya Kapur, Merpauh and Yellow Meranti, on the performance of home at the lobby of the Ministry of Plantation Industries and Design & Building Exhibition Malaysia (Archidex) 2014. MTC was invited by Putrajaya Corporation (PJC) to jointly Glulam beams to provide the char rating of each species. Commodities. At Ecobuild, the installation at the MTC booth The main objective of MTC’s participation was to promote build a timber bridge across the Putrajaya Wetlands lake The test was carried out by BRANZ, an independent research won the “Outstanding Concept Booth” award and attracted the wider use of timber and timber products among local as part of its beautification of the Wetlands programme. and testing company providing services for the building a lot of interest. As part of MTC’s efforts on promoting the architects. MTC promoted timber’s ‘green’ attributes and the This was followed by a rigorous selection process by an industry, based in New Zealand. The organisation also use of Glulam in the construction industry, the “Glulam Tree” main attraction of the booth was the Mengkulang Glulam evaluation committee comprising representatives certifies building materials for fire performances including will help create awareness among MPIC’s officers as well as ‘trees’, which generated a lot of positive feedback from from the Institute of Engineers Malaysia, Pertubuhan Akitek timber based on “BS476: Fire test on building materials and visitors on Glulam. architects, interior designers, developers and students of Malaysia, JKR and MTC. MyGlam Sdn. Bhd. was selected as structures”. Results showed that Mengkulang has good fire architecture. MTC’s booth featuring Mengkulang Glulam was the turn-key contractor to construct the timber pedestrian performance. This species will then be used as the main MTC organised a simple ceremony to hand over the “Glulam awarded the second prize in the Best Booth Design (Open bridge. The bridge would take about 18 months to complete. specimen for a full-scale fire test by BRANZ. Malaysian Tree” to MPIC through The Honourable Minister, Datuk Amar Structure Category for 36 sqm and below) at the exhibition. MTC has also engaged a timber bridge engineer, Rune building authorities such as BOMBA, JKR, Kementerian Douglas Uggah Embas. Perumahan dan KerajaanTempatan, will be invited to join Abrahansem from SWECO, Norway, as a third party checker the nanning mission also MTC and witness the testing that will be carried out in 2015. for the bridge engineering details. Mr. Abrahansem has been led to negotiations on a jv involved in building timber bridges, including the world’s plywood manufacturing strongest timber bridge in Norway. project between a malaysian and a chinese company.

37

Nurturing the Timber Industry

FROM FAR LEFT: • Visit to a woodworking factory in Nanning • Briefing at a woodworking machinery company in Guangzhou • Site visit to study the construction of timber frame houses in Melbourne

MTC Technical Projects for the Industry A familiarisation programme was put in place for the MTC has been involved in many technical projects either on its consultants from FMM-MATA to further improve their own, or in collaboration with various agencies. A summary of understanding and knowledge on the woodworking factories Technology Study/ Acquisition Missions the mission the technical projects carried out is as follows: prior to conducting the study. The programme was conducted Technical missions and technology study visits are two of on timber frame housing in February and March 2014 with visits to 8 timber-based the Council’s avenues to collect information on, or expose opened up opportunities Study on Mechanisation and Automation Options companies, i.e., Low Fatt Wood Industries, Trentim Wood, SMIs to the latest product development, new technology for some malaysian timber in the Wood Industry Bakti Malaysia, Mentakab Veneer and Plywood, Forest Height, in woodworking machinery and various markets’ technical manufacturers to MTC appointed the FMM-Malaysian Automation Technology Exowood, Minho and Pembalak Yuan Lim. requirements. Given MTC’s good relations with its start producing timber frames Association (MATA, formerly known as FMM-ATIG) as the counterparts in many difference regions, the Council for local construction. consultant for this Mechanisation and Automation (M&A) Durability Testing of Malaysian Timbers has been able to organise many such visits over the years. study. In 2014, the study was completed with 5 furniture This project, jointly executed by MTC, FRIM, MPMA and MWIA, In 2014, the following missions were organised: companies and 3 sawmills participating as test partners. is to gather data to be included in the BS 350 Part 2 – The After implementing the recommendations given by the Natural Durability of Timbers. This is particularly important consultant, the test partners reported improved productivity as in the UK, all plywood must comply to durability ratings Activity/ Venue Date Remarks of 5-20% and cost savings of 5-25%. One furniture company based on BS 350. Currently, only 6 Malaysian species are listed

MTC Technology Acquisition 28 March- The Mission exposed Malaysian wood product manufacturers to the latest developments in woodworking reported cost savings of RM20,000 per month. in BS 350. The results obtained will be sent to TRADA UK for Mission to Guangzhou, China 3 April and wood processing technologies. The focal point of the Mission was the China International endorsement so that they can be listed in future edition of BS Woodworking Machinery & Furniture Raw Materials Fair, and CIFM/Interzum Guangzhou, held on In order to benefit more stakeholders, MTC organised 350. Durability tests on 13 species have been completed, while 28 March-1 April 2014. Visits were also made to 4 woodworking machinery factories, 4 woodworking a series of roadshows to disseminate more information 9 species are still undergoing termite test, the results of which factories (where the machines were used in actual application) and an international woodworking machinery centre in Shunde. A total of 17 participants from 3 companies took part in the Mission. ‘Made- on both the M&A study and the Retrofitting study in are expected to be ready by early 2015. in-China’ machines and equipment are competitively priced compared to their European competitors. November and December to the Kuala Lumpur & Selangor Through feedback gathered from the participants, there were 5 purchases of machines and raw materials Furniture Entrepreneur Association (19 November); Species that have completed the test fungus and termite tests resulting from the mission. industry members in Northern Peninsular Malaysia are Acacia, Binuang Geronggang, Gerutu, Jelutong, Kapur, MTC Technology Acquisition 14-18 April MTC HQ, assisted by MTC Guangzhou, organised a Technology Acquisition Mission focusing on plywood (26 November) and the Muar Furniture Association Kedondong, Kekatong, Kelat, Keledang, Kelempayan, Keruing, Mission on Plywood, to Nanning, China. This was at the request of the Malaysian Panel-Products Manufacturers’ Association Nanning, China (MPMA)and was participated by 8 industry members from 7 companies and 1 participant from MPMA. (10 December). After the roadshows, 8 new test partners Kulim, Machang, Medang, Mengkulang, Meranti Bukit, Meranti The mission exposed the participants to the technical know-how on the peeling of small logs and in the were successfully recruited for the study in 2015. Sarang Punai, Mersawa, Pelong, Tembusu, Sesendok and Pine sourcing of this technology. Participants were also able to find out more on the success of Eucalyptus (as a reference species). plantation and the plywood industry in China. A Malaysian company purchased machinery from one of the suppliers to start a new production line in Malaysia. The mission also led to negotiations on a JV plywood Consultancy Study on the Options for Retrofitting manufacturing project between a Malaysian and a Chinese company. Woodworking Machineries the results obtained MTC approached FMM - MATA to conduct a study to look into Technical Study Mission on 13-20 May MTC organised a Technology Study Mission focusing on Timber Frame Housing in Australia. The mission on durability of malaysian Timber Frame Housing to was participated by 6 industry members from 6 companies, 9 from government agencies including JKR, the possibilities of retrofitting old or out-of-service machinery timber species will be sent Melbourne, Australia MTIB, CIDB, MIDA National Housing Department and Ministry of Urban Wellbeing, Housing and Local in the local timber-based manufacturing plants. The study to trada uk for endorsement Government. The mission was led by MTC Chairman, Datuk Aaron Ago Dagang. The mission exposed covers the sawmilling, plywood manufacturing, builders’, so that they can be listed in the participants to the technical know-how on timber frame housing. Following the mission, the Ministry of Urban Wellbeing, Housing and Local Government is seriously looking into adopting the timber frame joinery & carpentry and furniture sectors. The project assesses future edition of bs 350. system for their mass housing projects. This also opened up opportunities for some Malaysian timber the current operating state of the machines and proposes manufacturers to diversify their products, i.e., to start producing timber frames for local construction. feasible retrofitting options. 38 39

Nurturing the Timber Industry

improving timber utilisation/ The retreat produced a roadmap with two main thrusts, i.e., technical information services technical and promotion. Activities that have been identified Roadmap for Timber in Construction, to promote the use of timber in the local construction industry 20-22 January 2014 include the organising of missions, dialogues, seminars, MTC, FRIM and MTIB jointly organised a retreat to develop workshops on timber frame housing and on timber’s technical a roadmap on the Use of Timber in Construction. The retreat properties / various timber products available; to prepare was attended by representatives from the ministries and a Cabinet Paper on policy for local councils to use timber government agencies including MPIC, MNRE, KETTHA and in construction; to organise design competition among JKR. The private sectors were represented by the industry university students / professional architects; and to promote members, engineers, architects and PIAM, among others. timber through participation in relevant local exhibitions. MTC Timber Talk Series rune abrahamsen, The Timber Talk Series is designed to disseminate information of sweco, norway shared his and promote utilisation of timber and timber products to local experience in helping to design timber users and specifiers. Four talks were organised and build treet, a 14-storey in 2014, as follows: apartment building in norway Title Date/ No of Speaker/ where all structural elements of Talk Venue Attendees Remarks

are made of wood. Cross Laminated Timber 20 78 The talk by Mann Young of Lend Lease (Asia), focused on CLT as a structural building material (CLT) - A Breakthrough March and sustainable alternative to reinforced concrete, steel and load bearing brick & block in Smart Construction constructions. The world’s tallest residential timber structure, the FORTÉ project in Melbourne, Australia (designed and built by Lend Lease) was used as a case study to demonstrate the capabilities of CLT as an innovative timber structural building material.

Why Not Timber in 19 72 Associate Professor Dr. Mohd Ariff Jamaludin of Universiti Teknologi Mara, Shah Alam shared Building Construction? June his knowledge on timber utilisation.

Massive Timber 30 52 Silvia Pugnaloni, Rothoblaas Australia Pty. Ltd. shared information on modern technology in Construction September timber connectors with a special case study. Samples of fasteners and special connectors for massive timber construction were showcased during the talk. She also shared some acoustic solutions for timber buildings.

Treet – the world’s tallest 20 134 Rune Abrahamsen, of Sweco Norge AS, Norway shared his experience of helping to design and timber building November build Treet, a 14-storey apartment building in Norway where all structural elements are made and Modern timber of wood. Treet would be completed in 2015. He talked about engineering choices, fire design, bridges in Norway dynamics, weather protection, challenges, assembly, etc. He also shared his experience and lessons learned from the numerous timber bridge projects that he had been involved in.

CLOCKWISE FROM TOP LEFT: • Rune Abrahamsen speaking at the talk • MTC Roadshow on Technology Enhancement CLOCKWISE FROM TOP LEFT: • Participants listening attentively to Abrahamsen • Dr. Mohd Ariff Jamaludin delivering his paper • Mann Young delivering his topic • Silvia Pugnaloni attending to enquiries on the sample fasterners and special connectors showcased at the talk • Participants at the talk entitled “Why Not Timber in Building Construction” 40 41

Nurturing the Timber Industry

Technical Publications As part of its services to the industry, MTC also produced the following technical publications in 2014:

the world’s tallest Description/ Title Remarks residential timber structure, MTC Guidebook- Incentives • Provides a comprehensive the forté project in melbourne, for the Wood-based Sector listing of all the existing financial incentives. australia… was used as • The guidebook was updated a case study to demonstrate and sent to all trade associations the capabilities of clt as in August 2014. an innovative timber structural Brochure on Natural Durability • Provides durability ratings attendance at technical building material. of selected Malaysian timber for selected temperate and species and selected temperate Malaysian timbers. meetings /events timber species • The contents were rewritten. MTC regularly attends relevant conferences, forums and seminars to obtain updates on technical matters and/or requirements that could impact upon operations and market Technical Seminars access for Malaysian manufacturers. The more significant As part of MTC’s continuous efforts in disseminating the seminar exposed events attended in 2014 are as follows: information on the latest technology to the timber industry the malaysian woodworking members, architects or other target audiences, the industry to the latest • Forum on High Temperature Drying (HTD) System for following technical seminars / forums were organised waterproofing method for Rubberwood: Kuala Lumpur (7 January) or jointly organised by MTC in 2014: wood-based products. • ISO / TC 165 Meeting: Tokyo, Japan (22-26 September) • 7 th European Conference on Wood Modification: Title of No of Seminar/ Speaker Date/Venue Attendees Remarks Lisbon, Portugal (10-12 March) • World Conference on Timber Engineering: Quebec City, Using Timber in 23 August / 136 Dr. Wong discussed the misconceptions and myths that surround timber, and addressed each Construction – PAM, KL one to correct the misconceptions. It also covered the more salient points on the proper use Canada (10-14 August) the truth is out there! and of timber and some of the common mistakes that are made when using it. The second talk A Common Sense Approach addressed the issues that users face when dealing with specifying timbers in their projects. Dr. in Specifying Timbers Wong shared with the audience the various classes of timbers available in Malaysia and how Speaker: Dr. Wong Tuck to specify them properly. Meng (MTC)

Timber for Furniture – its 28 August / 191 As an event partner of the MIFF Furniture Design Competition (FDC) 2015, MTC was invited limit is your imagination PWTC, KL to speak in the MIFF FDC 2015 ‘Behind-the-Design’ Workshop. The workshop was tailored to Speaker: Dr. Wong Tuck provide useful insights on utilising wood in furniture. Dr. Wong took the audience through the CLOCKWISE FROM LEFT: Meng (MTC) unique properties of timber to provide basic knowledge of properties of the material. During • The talk at PAM was attended by 136 of its members the talk, he also introduced some of timbers suitable for furniture-making, both local and • Dr. Wong speaking at the PAM talk foreign, to the audience, with the aim of showcasing the aesthetic beauty of the material. • Paul Sia demonstrating the application and effects of the The First Malaysian 28 August / 46 The technical seminar was organised jointly with Nano G Central Sdn. Bhd. The seminar waterproofing nanotechnology Nanotechnology-Based MTC HQ, exposed the Malaysian woodworking industry to the latest waterproofing method for • Participants paying attention to Paul’s presentation Waterproof Coating for KL wood-based products. This nanotechnology-based waterproofing solution is designed to fit Wood Surfaces the unique properties of wood surfaces. It is a combination of active ingredients that repels Speaker: Paul Sia water without changing the natural appearance of the wood. The speaker also conducted a (Nano G Central) demonstration on the application and effects of the nanotechnology waterproof coating on wood-based products. 42 43

Supplementing Raw Material Supply

developing new sources of supply raw material supply import programmes Since its inception in 1992, MTC has constantly been Raw Material Supply Import Assistance researching new sources of raw material supply for the Programme (IAP) Malaysian timber industry. Information logistics and For 2014, approval was given to 130 companies to participate regulatory requirements on procuring raw materials from in the Import Assistance Programme and 108 companies a particular country would be obtained and shared with completed their importation of raw materials. The programme CLOCKWISE FROM FAR LEFT: the industry members through seminars and roadshows. facilitated the import of 64,584m3 of logs, sawntimber, • Inspecting sawntimber imported by a Malaysian company under the IAP • Roadshow on the IAP (February 2014) veneer, plywood, MDF and particleboard. The breakdown • Resource and Business Mission to Vietnam (7-11 October) MTC organised four Business Visits / Resource Missions the (mtc import assistance) of import utilisation for 2014 is as follows: • Resource and Business Mission to Indonesia (9-12 December) in 2014 to countries which were potential sources of raw programme facilitated material supplies to assist timber industry members in 3 Members Volume the import of 64,584m of logs, of (m3) Products Species sourcing raw materials, gather intelligence on the timber sawntimber, veneer, plywood, industry of prospective supplier countries and enhance MWIA 15,068 • Sawntimber Sapelli, Balau, Raw Material Industrial Testing Programme mdf and particleboard. • Laminated Boards Red Cedar, Poplar, The Industrial Testing Programme incentive was introduced networking. A summary of these visits and missions is • Plywood Rubberwood in 2014 to encourage timber industry members to test new as follows: • Mouldings seminars and roadshows timber species from off-shore sources in their production. TEAM 8,952 Sawntimber Pine, Beech, White Oak, In 2014, MTC organised a few seminars and roadshows to keep In 2014, three companies took advantage of this incentive Mission/ Visit Date Details Teak, Rubberwood the industry abreast of the raw material supply market and to import and test Ponderosa Pine from the USA and Chile MTC & MPMA 12-17 6 Malaysian companies opportunities. A summary is as follows: MWMJC 6,517 Sawntimber Jarrah, White Oak, Resource and Business January met with 7 Vietnamese Radiata Pine, for processing and value-adding. Mission to Hanoi, companies White Seraya, Kempas, Industry No of Companies / Vietnam Rubberwood, Dark Visit Date Attendees Red Seraya, Red Cedar, Business Mission to 15-20 8 Malaysian companies Southern Region 18-20 11 companies / Beech Shanghai, China June visited 2 factories, Wood (Johor Bahru) February 30 attendees Expo Shanghai 2014 MPMA 4,212 • Logs Birch, Okoume, and the Shanghai Furen Southern Region 18 -20 20 companies / • Veneer Red Oak Timber Market (Muar) February 40 attendees MFC 29,835 • Sawntimber Rubberwood, Resource and Business 7 -11 24 Malaysian companies • Boards Red Seraya, Mission to Hanoi and October met with 9 Vietnamese • Logs Paulownia, MLHW Ho Chi Minh City, companies • LVL Vietnam • Plywood • Parts & Components Resource and Business 9-12 10 Malaysian companies Mission to Medan, December met with 5 Indonesian PEKA 0 N.A. N.A. Indonesia companies Total 64,584 44 45

Event/Subject Matter Date(s) Campaigning for on eu forest law enforcement, governance & trade (eu-flegt) action plan Video Conferences with the EC on FLEGT-VPA 21 March, 4 April, 30 April, 1 August, 5 September 50th session of the ITTC and Associated Sessions of the 6th Joint Experts Meeting (JEM) on MY-EU FLEGT TLAS 15-16 May Malaysian Timber Committees, Yokohama, Japan (3-7 November) 11th Technical Working Group (TWG) Meeting 20-21 May Public Consultation with Malaysian Stakeholders on the EU-Malaysia FLEGT-VPA Negotiations 22 May

Post-Technical Working Group (TWG) Meeting 24 June Briefing Sessions to State Secretaries of Peninsular Malaysia 23 January, 19 February, 26 March, 4 June Project on “Compliance Audit of Sabah TLAS” 10 February, 10 March-4 April

Dialogue with Furniture Industry on FLEGT VPA 28 February, 27 May Meeting on the Licensing of Furniture Products under the TLAS 26 September Discussion on Organising a Seminar on the Recent Developments of the Forest Law Enforcement, 20 October Governance and Trade (FLEGT) Voluntary Partnership Agreement (VPA) Negotiations on australian illegal logging prohibition act (ailpa) MTIB Industry Briefing on Malaysian Country Specific Guidelines (MCSG) 2 June

6th Forestry and Timber Sub-Working Group (SWGFT) Meeting under the Malaysia – Australia 18 November Agricultural Cooperation Working Group (MAACWG) Industry Briefing on the Recent Developments of the AILPA 2012 and the MCSG 25 November

Other important proactive measures include the following: Malaysia Timber Legality Assurance Scheme (MYTLAS) and the EU Timber Regulation (EUTR) Engagement with Dutch Timber Procurement Action MTC, through its London office, continued to advocate Committee (TPAC) equitable and across-the-board implementation of the EUTR, proactive measures MTC’s campaigning efforts in Europe required initiating a in order to protect the interests of the Malaysian timber Issue Management legal process against TPAC’s decision to exclude the Malaysian industry in Europe, particularly with the UK, Netherlands, The Council’s proactive measures involve consistent The issues monitored and proactively managed to safeguard Timber Certification Scheme (MTCS) from the TPAC list of France, Germany and Denmark. engagement with relevant stakeholders in Europe, which Malaysia’s image include the following: approved certification schemes, even though the MTCS has forms the crux of MTC’s work through its London office been accredited by the globally recognised Programme for EU Member States Public Procurement Policies to manage issues that have a bearing on the Malaysian • Illegal Logging and deforestation; the Endorsement of Forest Certification schemes (PEFC). New sustainability criteria for solid biomass is being forestry/timber industry. Meetings are regularly held with • Reducing Emissions from Deforestation and Forest MTC, through its London office and its PR Agency in The formulated by the UK, Netherlands and Germany to ensure representatives from, among others: Degradation in Developing Countries (REDD, REDD+); Netherlands, Smeet Stuger and De Vries (SSDV) collaborated a professional, consistent and guaranteed quality supply • Activities of ENGOs and subject matters that they with external timber-related third parties in promoting of wood fuel in the face of ever-growing demand. Such • Malaysian Embassies in Europe; focus on; Malaysia’s interests through the MTCS under the Dutch TPAC. new criteria are to help determine whether or not biomass • Relevant German Government Ministries; • EU Timber Regulation (EUTR); installations are eligible for the Renewable Heat Incentive / • French Ministry of Agriculture and Fisheries; • EU Forest Law Enforcement, Governance and Trade In June 2014, a Dutch Ministerial delegation visited Malaysia Renewable Energy Targets being set by some EU member • Dutch Ministry for the Infrastructure & Environment, (FLEGT) Voluntary Partnership Agreements (VPAs); for discussions with the Minister of MPIC, MTC and MTCC on states. Biomass installations will need to demonstrate that Agriculture and Ministry of Foreign Affairs; • Transparency International’s Corruption Perception finding ways forward. The PEFC re-endorsement of the MTCS their wood fuel meets a ‘greenhouse gas lifecycle emissions • European Commission Directorate-Generals for index (CPI); and for a further 5 years (from August 2014) was a good ground limit’ target and land management standards. MTC London Environment, Enterprise and Market; • IUCN Red List of Endangered Species. for the Dutch government to move towards fully accepting the has been closely collaborating with PEFC International • UK Department for Environment, Food and Rural MTCS under the Dutch policy in the future. After this visit, and PEFC National Bodies to ensure that the criteria being Affairs (DEFRA); At MTC HQ level, the Council’s representatives also regularly the MTCS was ‘conditionally’ accepted under the Dutch formulated would not be a market barrier for solid biomass • Programme for the Endorsement of Forest Certification attend and actively participate in various meetings to, inter alia, Public Procurement Programme provided current perceived products such as pellets from Malaysia into the EU. schemes (PEFC International) and PEFC National proactively assist MPIC in managing and strategising on issues gaps were closed by a full TPAC assessment of the MTCS by Schemes; and that would have a bearing on the Malaysian forestry/timber June 2016. MTC, through its London office, has also been closely monitoring • Parallel EU member state timber federations (especially industry. In 2014, these meetings include the following: and where necessary, lobbying to ensure that Public Procurement the European Timber Trade Federation, and in Belgium, Policies of European countries are not detrimental to imports of France, Denmark, Germany, Italy, the Netherlands and Malaysian timber products. the UK). 46 47

Campaigning for PR & • EGILAT Meeting, Beijing, China (August 2014) Malaysian Timber Communications monitoring & supportive measures Oil Council (usually over allegations of forest clearing for MTC’s monitoring and supportive measures are conducted establishment of oil palm plantations). by both MTC HQ and MTC London. The Council also engages two public relations consultants, one each in Germany The following specific subject matters have been closely The Council undertakes several initiatives in an effort to media relations (Kaiser Communications) and The Netherlands (Smeet, monitored by MTC in the general and trade-based media: send out the right messages to the various stakeholders In 2014, MTC spent RM73,569 on advertising in selected Stuger and DeVries), for monitoring and other PR measures. of the Malaysian timber industry. In 2014, these initiatives trade magazines and journals, which include Building & Issues monitored are not limited to forestry and timber-related • Illegal logging and related international trade in illegal include advertising in selected media mediums, arranging Investment, Asian Timber, and Panels & Furniture Asia /MENA. matters. As trade and timber certification are intertwining timber products; media interviews, carrying out an awareness programme and Other media relations work was based on the issuance of the issues in the European market, information received is fed • Legislative efforts on restricting the timber trade; organising a familiarisation programme for foreign journalists. following Press Releases on MTC’s activities and achievements into MTC’s strategies, formulated in consultation with • Biofuel, forest conversion and climate change; in 2014: Malaysian missions in various parts of Europe and relevant • Environmental NGOs’ activities;

agencies in Malaysia. • EU FLEGT-VPA; Month Press Release Issued English BM Mandarin • EU Timber Regulation (EUTR); Jan MTC-UiTM to Develop First Span Table for Glulam • • • Matters that have an indirect bearing on the Malaysian • Transparency International’s Corruption Perception Index; Mar MTC’s Strategy for the Indian Timber Market (based on MTC’s participation in Indiawood 2014) • • • timber industry, like allegations of forest clearing for the • IUCN Red List of Endangered Species; establishment of oil palm plantations and the debate on • Responsible Purchasing Policies by the Timber Trade MTC’s Glulam Roadmap to Boost Promotion & Adoption of Glued Laminated Timber in Construction • (based on handover of glulam structure to Ministry of Plantation Industries & Commodities) biofuel and climate change, are also actively monitored, Federations / Associations of the UK, The Netherlands, be it in print, broadcast or electronic media. MPIC and France, Germany, Italy and Belgium; and Apr Fun for a Greater Cause (Sponsorship of Sri Aman Environmental Youth Leadership Summit) •

Ministry of Natural Resources and Environment (MNRE) • Politics of countries with influential ‘green’ parties. MTC’s Malaysian Hardwood Guide – Showcasing Malaysia’s Forestry and Timber Industry • are always kept abreast of developments in Europe and June MTC Promotes Strength, Durability and Versatility of Wood at ARCHIDEX 2014 • • elsewhere. Where necessary, information is channeled to As part of its supportive measures, MTC also attended the agencies like the MTIB, MTCC, Malaysian timber-based following meetings and conferences in 2014: July Silver Best Booth Design Award for MTC at ARCHIDEX 2014 • • associations and related entities like the Malaysian Palm Malaysian Timber Council (MTC) mission to Australia highlights cost-saving and eco-friendly advantages • • of timber frame construction Event/Subject Matter Venue Date(s) MTC Upholds Glulam as Ideal Building Material • Timber Industry Briefing Session and Consultation Workshop Selangor, Malaysia 9 January

Regional Consultation (Peninsular Malaysia) on the Review of the Malaysian Criteria and Kuala Lumpur, Malaysia 15 April Aug Re-Establishing Timber in Malaysia’s Construction Industry (based on Timber Talk) • • Indicators for Forest Management Certification (Forest Plantation) [MC&I(Forest Plantation)] Creating Wood-Inspired Moments (based on sponsorship of MIFF Furniture Design Competition) • • • Asia-Pacific Economic Cooperation (APEC) Experts Group on Illegal Logging and Associated Qingdao, China 6-8 May Trade (EGILAT) Meetings Beijing, China 6-8 August MTC Preps Timber Industry for GST • •

th 13 Meeting of the Working Group on Pan-ASEAN Timber Certification Initiative Nay Pyi Taw, Myanmar 3 -4 June A Giant in the Timber Industry (tribute to the late Tunku Osman Ahmad, Founding Chairman of MTC) • 17th ASEAN Senior Officials on Forestry (ASOF) and its Related Meetings Seam Reap, Cambodia 9-13 June Sept Timber for Furniture – Limitless Possibilities • • • Meeting on the Development of Standards and Procedures for Legality Verification Systems Putrajaya, Malaysia 25 June Exploring Forestry, Timber & Sustainable Living • • in ASEAN Member States for Timber Trade

National Policy on Biodiversity 2015-2025 Regional Stakeholder Consultation Workshop Putrajaya, Malaysia 17 September Oct MTC Rides on India’s Growing Demand for Timber Products (based on participation in INDEX Mumbai) • • • (Peninsular Malaysia) MTC Debunks Fallacies About Timber in Construction (based on MTC’s talk to PAM members) • • Meeting with the Agricultural Counsellor of the Netherlands Putrajaya, Malaysia 17 September Nov MTC’s Looks to Strengthen Malaysian Timber Industry’s Presence in United States (based on Marketing • • • th 4 Sub-Regional Training Workshop on the Timber Legality Assurance System (TLAS) Vientiane, Laos 22-24 October Mission with industry members to the US)

The 50th Session of the International Tropical Timber Council (ITTC) and Associated Sessions Yokohama, Japan 3-7 November MTC Leads Industry to Capitalise on Dynamic MENA Market • • • of the Committees MTC Mission Clinches Close to RM6 Million Middle East Orders International Conference on Heart of Borneo “Enhancing Biodiversity towards No Net Loss and Kota Kinabalu, Malaysia 10 November (based on MTC’s Marketing Mission to Qatar, Oman & Kuwait) • • • Beyond within the Heart of Borneo Landscape” Dec Taking Timber to New Heights (based on Timber Talk on Treet – the World’s Tallest Timber Building) • • • 17th Malaysian Forestry Conference Kota Kinabalu, Malaysia 11-12 November

Workshop on the Review of the National Forestry Policy 1978 (Revised 1992) Putrajaya, Malaysia 3-4 December 48 49

PR & Communications

The Press Releases issued resulted in 27 articles in specialist trade magazines / e-publications (local and foreign) with an Press Releases and activities initiated by MTC in 2014 also resulted in the publication of 106 articles in mainstream media with estimated media value of RM824,444 (cf. 23 articles with an estimated media value of RM268,914 for 2013), as follows: a total advertising value equivalent of RM2,902,251, which is summarised as follows:

Items Media Press No of Cumulative Periodical Issue published Value (RM) Release/ Articles Media Advertising Value Event Generated Coverage by Equivalent (RM) FuturArc January - Book Review on A New Paradigm for Malaysian Timber (Full page) 9,625 February 2014 MTC-UiTM to Develop First 6 The Malay Mail (Business); Kosmo (Infiniti); Kosmo Online (Infiniti); 361,738 Span Table for Glulam Sinar Harian (Jom Masuk U); Sunday Star (Star Educate); Panels & Furniture January - 1. Timber is the Ultimate ‘Green’ Construction Material (4 pages) 118 , 8 0 0 The Star Online (Star Educate) February 2014 2. Global Marketing Insights Strengthen Malaysian Timber Trade MTC’s Strategy for the Indian 2 The Malaysian Reserve (Corporate Malaysia); Utusan Malaysia (Bisnes) 69,618 Reno & Deco - Event January Timber Tour 14,000 Timber Market (based on MTC’s Timber + Design International 27 January Malaysia Looks Inward for Growth 15,400 participation in Indiawood 2014)

Panels & Furniture MENA Vol. 1, 2014 1. The Malaysian Timber Certification Scheme 267,300 Bernama Interview with MTC 7 Bernama News Online (English); Bernama News Online (BM); Yahoo! 149,800 2. A Delicate Balancing Act – Managing Malaysia’s Forests for Timber Production CEO, Datuk Yeo Heng Hau News Malaysia (online); The Edge Financial Daily – Business & Markets Through Sustainable Forest Management (SFM) Practices (with Specific (online); Borneo Post Online (Business); The Malaysian Reserve (Enterprise); Reference to Peninsular Malaysia) The Malay Mail – Business. 3. Publication review on MTC Malaysian Hardwood Guide Fun for a Greater Cause 6 The Star (Metro); The Star Online (Metro); The Star (Southern Edition); 470,392.57 4. Timber is the Ultimate ‘Green’ Construction Material (4 pages) (Sponsorship of Sri Aman Utusan Malaysia (Utusan Kota); Utusan Malaysia (Online); Building & Investment March -April MTC Publishes Handbook on Malaysian Wood and Timber 22,800 Environmental Youth Berita Harian (Pendidikan). Leadership Summit) Design Construct & Build January / The Malaysian Timber Council Publishes ‘Malaysian Hardwood Guide’ (full page) n.a. (DC&B) March MTC’s Malaysian Hardwood 2 Sinar Harian (Bisnes); Sinar Harian (Online) 20,040 Guide – Showcasing Malaysia’s Asian Timber March / April MTC Offers Guide to Malaysian Hardwoods* 5,250 Forestry and Timber Industry

Kagushinbun March Interview with MTC CEO and MTC Senior Director of Communications n.a. MTC Promotes Strength, 1 Utusan Malaysia (Utusan Kota) 4,386 Timber + Design International 5 April New Timber Guide Review* (online) 30,744 Durability and Versatility of Wood at ARCHIDEX 2014 Southeast Asia Building May / June Malaysian Timber Council Publishes Guide on Malaysian Hardwoods* 8,700 Malaysian Timber Council 7 Utusan Malaysia (Bisnes); Bernama (Business); New Straits Times (Online); 150,480 Datalignum May / August The New Malaysian Hardwood Guide 2014* n.a. (MTC) mission to Australia The Rakyat Post; Yahoo! News Malaysia (English); Yahoo! News Malaysia (BM); highlights cost-saving and eco- Utusan Malaysia (Online) Go Viet Magazine June Timber is the Ultimate “Green” Construction Material (4 pages) 38,331 friendly advantages of timber Southeast Asia Building July / August Malaysian Timbers Specified at The Park Hyatt Hadahaa, Maldives 13,000 frame construction

Panels & Furniture MENA Issue 2 MTC’s 15th Year Presence in Dubai Affirms Malaysia’s Commitment to the MENA 59,400 MTC Upholds Glulam as Ideal 5 Bernama (Business); Borneo Post (online); New Straits Times (Online); 93,000 Region Building Material Yahoo! News Malaysia; Bernama (Ekonomi)

Timber + DESIGN May / June Introducing the New Malaysian Hardwood Guide - Your Definitive Guide to Malaysian 30,744 Re-Establishing Timber in 4 Borneo Post (online); Sinar Harian (Citra); Focus Malaysia (Assets), 143,228 Hardwoods (MTC banner) Malaysia’s Construction The Ant Daily. Industry (based on Timber Talk) Asian Timber July / August 1. MTC to Further Develop Timber Industry and Promote Use of Glulam 26,250 2. MTC’s Timber Mission to Australia to Spur Industry Growth Creating Wood-Inspired 20 Oriental Daily News, Daily Express Online, New Sarawak Tribune Online, 386,982.40 Moments (based on sponsorship Star Metro (Metro Watch), Berita Harian (Bisnes), Borneo Post Online, Building & Investment July-August MTC Timber Talk Series “Why Not Timber in Building Construction?” 11,4 0 0 of MIFF Furniture Design Malay Mail (Money), Kosmo (Niaga); Nanyang Siang Pau (Commercial News); Southeast Asia Building Sep / Oct Timber is the Ultimate ‘Green’ Construction Material 69,600 Competition) Harian Metro (Nuansa); Harian Metro Online; News Straits Times (Life & Times); Oriental Daily (Online); Cari Online News; Oriental Daily News Asian Timber Sep / Oct MTC Debunks Fallacies about Timber in Construction 15,750 (Investment Weekly); Nanyang Siang Pau (Commercial News); PR Newswire; Panels & Furniture Nov / Dec A Walk in the Park with the Malaysian Timber Council 44,550 Nanyang Siang Pau Online; China Press Online; China Press (U EDU).

Building & Investment November- Use of Timber for Modern Buildings and Bridges 22,800 MTC Preps Timber Industry 4 Bernama – Ekonomi; The Borneo Post Online, New Sarawak Tribune Online, 56,600 December for GST Sinar Harian (Bisnes).

Total Estimated Media Value 824,444 A Giant in the Timber Industry 2 New Straits Times; New Straits Times Online. 130,096 (tribute to the late Tunku Osman Ahmad, former MTC Chairman) * Editorial value is calculated based on the advertising cost for same-size insertion multiplied by 3. Timber for Furniture – Limitless 6 The Star (Metro); The Star Online; Design Times; Creative Home Online; 182,220 Possibilities Oriental Daily News (Commercial); The Borneo Post Online. 50 51

PR & awareness programme Communications In an effort to raise MTC’s public profile, MTC carries out awareness programmes that include educating journalists, Press No of Cumulative the public and students on Malaysia’s sustainable forestry, Release/ Articles Media Advertising Value Event Generated Coverage by Equivalent (RM) sustainable living and the ‘green’ credentials of timber. MTC’s awareness programme in 2014 comprised the Exploring Forestry, Timber & 1 New Straits Times (Life & Times) 62,600 Sustainable Living following activities:

MTC Rides on India’s Growing 4 New Straits Times (Business Times), See Hua Daily Online, 97,094 Demand for Timber Products Oriental Daily News Online, Oriental Daily News (Business) Sri Aman Environmental Youth Leadership (based on participation in Summit 2014 INDEX Mumbai) MTC sponsored and participated for the third time in the MTC Debunks Fallacies About 1 Borneo Post Online 36,000 Sri Aman Environmental Youth Leadership Summit (SAEYLS), Timber in Construction (based which ran from 6-12 April 2014. SAEYLS is a platform started on MTC’s talk to PAM members) by the Sri Aman Secondary Girls’ School in 2012 to spread MTC’s Looks to Strengthen 9 Bernama Online; Sinar Harian Online; Sin Chew Daily Online; Nanyang Siang 98,356.10 Malaysian Timber Industry’s Pau Online; Malay Mail – Money; Sinar Harian – Bisnes; Nanyang Siang Pau – environmental awareness and instill leadership skills through • Students from SMK Bandar Sunway participating in the tree-planting event Presence in United States (based Commercial; Sin Chew Daily – Nation; New Sarawak Tribune – Business. eco-based projects and activities. The 2014 summit saw the on Marketing Mission with participation of 20 schools from seven nations, i.e., Malaysia, Talk and Tree-Planting at SMK Bandar Sunway industry members to the US) Indonesia, Thailand, Brunei, Laos, Philippines and Denmark. MTC was invited by SMK Bandar Sunway to give a talk on MTC Leads Industry to 19 Borneo Post Online; Bernama Online, News Straits Times Online, Free 389,620 MTC was a sponsor together with DRB-Hicom, Permodalan sustainable forestry management, timber’s ‘green’ credentials, Capitalise on Dynamic MENA Malaysia Today, Yahoo! News Malaysia, Berita Harian Online, MStar Online Nasional Berhad, AEON Credit Service, Zalora, and Puspakom Malaysia’s timber certification scheme and sustainable living Market & MTC Mission Clinches (Niaga), MySarawak Online, Borneo Post Online, New Sarawak Tribune Close to RM6 Million Middle Online, Utusan Malaysia Online, Sin Chew Daily Online, Harian Metro Online, Sdn. Bhd. habits to raise its students’ awareness on these issues. The talk, East Orders Malay Mail (Money), Utusan Malaysia (Bisnes), Sin Chew Daily (Nation), given on 10 September, was combined with a tree-planting Nanyang Siang Pau ( Commercial News), Harian Metro (Bisnes), Sinar Harian MTC also gave a talk on sustainable forestry management, programme. MTC donated five Salam (Syzygium polyanthum) (based on MTC’s Marketing (Bisnes). Mission to Qatar, Oman & timber’s ‘green’ credentials, Malaysia’s timber certification tree saplings to help green and beautify the school compound. Kuwait) scheme and sustainable living habits to raise the students’ 106 Total Estimated Advertising Value Equivalent 2,902,251 awareness on these issues. Together with the talk, an MTC- MTC Familiarisation Programme for sponsored beach clean-up at Bakaugruv Kampung Resort in Foreign Journalists Morib spelled a lot of fun for all the students. MTC was also In an effort to raise awareness on Malaysia’s sustainable The following media interviews were arranged in 2014: …press releases and activities involved as a judge in the SAEYLS Leadership and Green forestry practices, certification efforts, timber industry initiated by mtc in 2014 also Efforts Competition. and plantation development programme, MTC organised a Periodical/ Issue/ Title of News Items Channel Date Published/Headline resulted in the publication of Familiarisation Programme for foreign journalists on 13-18 106 articles in mainstream media BERNAMA Economics 6 March Interview with MTC CEO October 2014. The programme involved trade journalists Service on MTC’s efforts for the with a total advertising value from Malaysia (1), China (3), India (2) and Singapore (2). Malaysian timber industry equivalent of rm2,902,251. The journalists were taken to Sg Tekala Regenerated Forest Kagushinbun 6 March Interview with MTC CEO Area, factories that stock / process certified MTCS timber, and MTC Senior Director of Westport, an Acacia forest plantation and Mulu National Park Communications on MTC’s efforts for the Malaysian for first-hand experience of Malaysia’s forestry /resource timber industry policies, timber enforcement, certification efforts, indigenous

Japan Times 11 April Interview with MTC CEO people policies and conservation initiatives.

Business Focus 15 December On MTC’s efforts for the (with MTC CEO) Malaysian timber industry

In summary, with an investment of RM229,298 in 2014 (comprising of RM54,794 in advertising, Malaysian PR fees of RM100,104 and regional PR fees of RM74,400), MTC’s returns in terms of Advertising Value Equivalent (AVE) of RM3,726,695 was 1,625% over its investment. • Participants of the beach clean-up at Bakaugruv Kampung Resort, Morib 52 53

Publications PR & Regular publications include Timber Malaysia, the Council’s mouthpiece on news about MTC, the Malaysian forestry / timber Communications industry and ‘green’ development in Malaysia. The Timber Market Brief was discontinued as market reports began to be uploaded directly onto the revamped MTC website. A summary of collaterals published by MTC in 2014 is as follows:

Circulation / Target Audience / Issues Collateral Initial Print Remarks Published By December 2014, the following positive articles were mtc online & offline publications written and published by a few of the participants: MTC Website Revamp Timber Malaysia 5,500 copies Malaysian and foreign timber companies, Government agencies, 6 Issues in English Diplomatic/trade missions, Academia, NGOs in 83 countries. The MTC website was revamped to give it a fresher, more Article Date of contemporary look and feel. Vast amount of Information has Timber Market Brief E-version only Members of the timber industry in Peninsular Malaysia, Heads of 2 issues (Jan 2014 / Title Journalist Publication Publication effective January relevant divisions in MPIC and agencies in Peninsular Malaysia, and Vol. 229 and Feb 2014 been collated and reorganised. The revamped MTC website MTC Familiarisation Wei Siyaou Panels & Nov-Dec 2014 Vol. 229 issue Sabah/Sarawak companies (on a subscription basis). / Vol. 230) in English Programme in KL, Furniture Asia 2014 was published in October 2014. The website features five Policy decision to Malaysia Ended (Mandarin pillars of information as follows: cease publication Successfully version) in March 2014 Summary of Target Malaysian Hardwood Guide A Walk in the Park Zoey Panels & Nov-Dec 4,000 copies Foreign timber importers and buyers, specifiers (architects, engineers), Issue 1 (2014 / 2015) Pillar Title Contents Audience with the Malaysian Chong Furniture 2014 architectural/ engineering/ industrial design students. • English version Timber Council Asia (English 1 Malaysian Malaysia’s SFM, forest Policy makers, Malaysian Hardwood Guide 500 copies French timber importers and buyers, specifiers (architects, engineers), Issue 1 (2014 / 2015) version) Timber and timber certification, NGOs, architectural/ engineering/ industrial design students, especially • French version Legality & compliance with researchers, Forestry Governance Pan China Green 19 those attending Carrefour Du Bois exhibition at Nantes, France on Sustainability international legality students and System in a Country Chunfang Times November 4-6 June 2014. requirements general public Rich in Resources: 2014 MTC’s Publications on Malaysian 15,000 copies Malaysian architects and civil engineers; lecturers and students of English version All for Sustainability 2 Malaysian Species, products and Architects, Timbers (Information leaflet architecture and civil engineering, property developers in Malaysia. [An Inspection Timber projects using Malaysian builders, and order form) on Sustainable Species & timbers contractors, Development of Applications developers, Timber: Facts That Figure 25,000 copies Malaysian architects and civil engineers; lecturers and students of English version Forestry and Timber engineers and architecture and civil engineering, property developers in Malaysia. Industry of Malaysia specifiers MTC Educational Posters (Set of 1,000 copies • Malaysian secondary school students. English version (Part I) ] 3 Programmes Trade fair, missions and Malaysian 5 posters) on Malaysian forestry, per poster • General public. Malaysian Pan China Green 3 for Industry seminars for industry timber industry certification and sustainable living Timber Industry Chunfang Times December members members Dominated by 2014 4 Publications MTC’s brochures, books Architects, Other regular collaterals published were the MTC Annual Report 2013, the MTC Calendar 2015 and the MTC Trade Promotion Chinese Malaysians & Resources and publications builders, [An Inspection & Industry Development Programme 2015. contractors, on Sustainable developers, Development of engineers and Forestry and Timber MTC publications are sold during MTC functions, participation news flash specifiers Industry of Malaysia at exhibitions, via email and walk-ins as well as through MPH MTC HQ has also been proactively monitoring online (Part II) ] 5 Timber MTC’s public awareness General public Distributors. MTC has also entered into an agreement with trade and forestry information and news. Relevant news Awareness & programmes, timber’s Mulu National Park: Pan China Green 7 January FRIM to display and sell selected MTC publications at their are downloaded and distributed electronically to the Education ‘green’ credentials A Great Tourist Chunfang Times 2015 book shop. For 2014, the number of MTC publications sold timber trade associations. With the aim of further improving Site with a Focus (Scheduled) Members’ A login section on market Malaysian on Conservation Section intelligence, reports and timber industry is as follows: online news monitoring and to provide timely updates and Public Interests specific programmes for members Title No. of Copies and information to relevant Ministries and timber [An Inspection Malaysian timber industry ReThink: A New Paradigm for Malaysian Timber 38 associations, MTC has subscribed to an electronic news on Sustainable members monitoring service. Development of Malaysian Wood: Timeless Living 6 Based on Google Analytics data, traffic to the website had Forestry and Timber On-Site Identification of Some Common Timbers 27 Industry of Malaysia increased significantly after the website revamp. Used in Malaysia (Part III) ] Architectural Use of Timber in Malaysia 28 MTC Guidebook for TImber Doors in Malaysia 11 Rudunara - The Story of the Handmade House 4 Total 134 55

Financial Statement

Balance Sheet as at 31 December

in rm ’000 2014 2013

Property and equipment 18,532 19,350 Investment - Properties 18,392 18,853 Investment - Trust 6,900 - investment - Endowment Fund 519,803 544,674

Current Assets Investments with fund managers 255,750 256,386 Other receivables 3,242 3,339 Cash and bank balances 26,762 22,721 285,754 282,446 Current Liabilities Trust creditors and other payables 4,515 6,974 Net Current Assets 281,239 275,472 Net Assets Value (Nav) 844,866 858,349

Represented By :

Accumulated Funds Balance as at 1 January 313,675 281,575 Surplus/ (Deficit) of financial resources 11,388 32,100 Endowment Fund 519,803 544,674 Balance As At 31 December 844,866 858,349 Financial Income and Expenditure Account for the year ended 31 December Review Financial Resources Surplus transferred from Endowment Fund 29,994 29,142 Other income 23,610 32,485 53,604 61,627

Expenditure Total expenditure 42,216 29,527 SURPLUS OF FINANCIAL RESOURCES OVER EXPENDITURE 11,388 32,100

Note: The above figures have been extracted from the financial accounts of MTC audited by KPMG. A giant in the timber industry In The passing of Tunku Tan Sri Osman Ahmad on July 6 marked the end Dubai, to safeguard markets and promote exports of Malaysian of an era of the doyens of the Malaysian timber industry, which included timber products. Through the council’s promotional efforts, Memoriam the indomitable Tun Dr Lim Keng Yaik and Tan Sri Wong Kum Choon. exports to the European Union grew from RM1.4 billion in 1992 to RM2.6 billion in 2010, proof that efforts to counter the anti- “tunku’s service at mtc was Tunku was the founding chairman of the Malaysian Timber Council, tropical timber campaign worked. Exports to West Asia increased executed with a huge dose of who, along with its second chief executive officer, Wong, and former from RM384 million in 1992 to RM1.8 billion in 2010 and to South passion, determination and Primary Industries Minister, the late Dr Lim, provided the early impetus Asia, from RM177 million (1992) to RM1.7 billion (2010). Based most importantly, integrity.” for the promotion and export of Malaysian timber and its rapid growth on intelligence gathered by MTC, the Malaysian timber and forestry trajectory which stood at RM20.5 billion in 2010. Tunku was chairman industry was eventually benchmarked against global best practices, from 1992 to 2010. He was a giant in terms of his stature and presence making Malaysia the first tropical country to come up with its own within the industry. He was highly respected by his peers in Malaysia timber certification scheme. and business counterparts in the dozens of countries he traversed promoting the local timber industry and its interests. In 1998, as recognition for his efforts, he was conferred a federal award, “Tan Sri”. Despite this, he continued to introduce himself as His reputation always preceded him and he was known as a disciplined “Osman”. In that same year, MTC also received an endowment fund go-getter. He started his career in the Johor civil service after completing from the government. This fund had to be invested wisely to make his diploma in agricultural engineering and served the government for the council self-sustaining. Under Tunku’s able stewardship, by end- 13 years before venturing into various businesses. 2010, the fund had grown at an average of 7.9 per cent per annum, a commendable rate of return given the limited instruments in which With stakes in oil palm, timber, property development, food, banking, MTC was allowed to invest. petrochemicals and consumer goods, among others, Tunku was very businesslike. But he also had the innate ability to inspire loyalty in the Tunku also worked tirelessly in uniting the timber industry members, people working for him: his assistant-cum-bodyguard served him not only within Peninsular Malaysia (under the “Timber Industry for 30 years, while others worked for him for at least 20 years. As for Forum”), but also with members from Sabah and Sarawak (under business partners, initial scepticism would quickly morph into respect, the Malaysian Timber Association or MTA). The MTA provided a cementing relationships that lasted decades. valuable platform to discuss industry issues common to the three main regions. The management and staff of MTC knew Tunku In 1990, given his experience, Dr Lim believed that Tunku would make the expected a serious commitment to work and the best in terms of perfect founding chairman for an establishment to counter the anti-tropical results. Outside working hours, his easy-going nature endeared timber campaign and promote exports of Malaysian timber products. him to those working for him. Tunku’s friendship was a gift to the In 1992, after a dinner and handshake with Dr Lim, MTC was born. many people who had worked closely with him. He had many stories to share, most of them extremely funny and the source of shared Tunku used to joke that birthing MTC was “easy” with a “father” laughter after serious work discussions. His office was always open like Dr Lim, but “raising the baby” was a challenge. The initial work and anyone could walk in, share their thoughts or ask for advice. involved extensive travelling all over Europe, forging alliances and convincing counterparts of Malaysia’s progressive sustainable In 2010, Tunku told the then Minister of Plantation Industries and forest management system. MTC provided strong support to the Commodities that after serving for 19 years, the council could government in global forums like the Rio Summit, the International benefit from new stewardship. His last day was Dec 30, 2010, and it Tropical Timber Organization and Inter-Governmental Panel on was a tearful farewell. Tunku’s service at MTC was executed with Forests to ensure that Malaysia’s message of being a responsible a huge dose of passion, determination and most importantly, tropical timber producer was always highlighted. integrity. His favourite number was 6. That was also the date he left us — July 6, 2014. Tunku made it seem effortless. The many who had interacted with him, from high commissioners to ambassadors, importers and After many dry weeks, it rained hard in Johor Baru on the morning parliamentarians, were charmed by his impeccable manners. Many of July 7, when the Tunku was laid to rest. He may be gone, but his referred to him as “the humble royal” as he always introduced legacy of passion and commitment lives on. himself as “Osman”. Suria Zainal, Senior Director, Communications and Investments, During his 19 years as chairman, three regional offices were Malaysian Timber Council established, in London, Shanghai (later moved to Guangzhou) and Source: New Straits Times, 28 August 2014