performance of the · fibreboard 3 6 plywood 3 13 products usa (by import) malaysia (by export)...

18 October 2018

Le Meridien Hotel, Kuala Lumpur

2

MALAYSIAN TIMBER CONFERENCE 2018“Performance of the

Malaysian Timber Trade”

CONTENT

1. Importance of Malaysian Timber Sector

2. Performance of Malaysian Timber Trade

3. Performance Forecast

4. Issues and Challenges

5. Market Prospects

6. Moving Forward

3

4

Importance of Malaysian

Timber Sector

Timber Industry’s Contribution to the Malaysian Economy (2017)

5

6

Performance of Malaysian

Timber Trade

MALAYSIA: Export & Import of Major Timber and Timber Products (1997–2017)

7Source: Global Trade Atlas (GTA)

0.0

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IMP

OR

T (U

SD M

illio

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EXP

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T (U

SD M

illio

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EXPORT

IMPORT

MALAYSIA: Export of Major Timber and Timber Products (1998– July 2018)

8

Source: Global Trade Atlas (GTA)

Top 5 Products – Malaysian Export (Value - USD Billion)

PRODUCTS1998 2000 2005 2010 2015 2016 2017

Jan-July 2018

Total 3.8 4.7 5.5 6.2 5.6 5.3 5.4 2.7

Wooden Furniture 0.9 1.2 1.4 1.8 1.8 1.8 1.9 1.2

Plywood 0.9 1.0 1.5 1.6 1.2 1.1 1.1 0.7

Sawntimber 0.7 0.9 0.8 0.8 0.8 0.8 0.9 0.5

Logs 0.5 0.7 0.7 0.7 0.5 0.4 0.3 0.1

BJC 0.2 0.2 0.3 0.3 0.3 0.3 0.3 0.2

MALAYSIA: Import of Major Timber and Timber Products (1998– July 2018)

9


Top 5 Products – Malaysian Import (Value - USD Billion)

PRODUCTS1998 2000 2005 2010 2015 2016 2017

Jan-July 2018

Total 0.2 0.3 0.5 0.7 0.9 0.9 1.1 0.7

Wooden Furniture 0.03 0.05 0.18 0.19 0.30 0.35 0.39 0.24

Plywood 0.004 0.01 0.01 0.05 0.16 0.15 0.17 0.15

Sawntimber 0.06 0.10 0.17 0.13 0.11 0.11 0.13 0.09

Veneer 0.03 0.04 0.04 0.10 0.09 0.10 0.12 0.07

Particleboard 0.01 0.02 0.03 0.09 0.06 0.07 0.08 0.04

MALAYSIA: Price per Unit of Export of Major Timber and Timber Products (1997–2017)


-

100.00

200.00

300.00

400.00

500.00

600.00

700.00

800.00

900.00

1,000.00

USD

Logs Sawntimber Plywood Mouldings

MALAYSIA: Price per Unit of Import of Major Timber and Timber Products (1997–2017)


0.00

100.00

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300.00

400.00

500.00

600.00

700.00

800.00

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USD

Logs Sawntimber Plywood Mouldings

Logs

Mouldings

Plywood

Sawntimber

MALAYSIA : Destinations for Export of Major Timber Products By Region (1997–2017)

12


0.0

500.0

1,000.0

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USD

Mill

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ASEAN EU East Asia Americas

MALAYSIA : Sources of Import of Major Timber Products By Region (1997–2017)

13


0.0

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USD

Mill

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ASEAN EU East Asia America

MALAYSIA : Top 10 Destinations for Export of Major Timber Products (1997–2017)

14


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Mill

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Japan United States India Singapore South Korea

China Australia United Kingdom Thailand The Philippines

Japan

India

USA

Singapore

Australia

Thailand The Philippines

S.KoreaChina

U.K

MALAYSIA : Top 10 Sources of Import of Major Timber Products (1997–2017)


0.0

50.0

100.0

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200.0

250.0

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USD

Mill

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China Indonesia Thailand Vietnam Australia

United States Germany New Zealand Brazil Singapore

China

Indonesia

ThailandVietnam

Australia

USA

N.Zealand

Singapore

Germany

Brazil

Malaysia’s Position in Major Export Destinations

16

JAPAN

INDIA

USA

Products Japan

(by import)

Malaysia

(by export)

Plywood 1 1

Fibreboard 2 1

Wooden

Furniture

3 2

Veneer 4 4

Mouldings 5 4

Products India

(by import)

Malaysia

(by export)

Sawntimber 1 4

Particleboard 2 4

BJC 2 7

Wooden

Furniture

2 6

Fibreboard 3 6

Plywood 3 13

Products USA

(by import)

Malaysia

(by export)

Furniture 5 1

Mouldings 6 3

Plywood 9 5

Wooden Frame 11 1

BJC 13 4

By International Ranking



17

CHINA

UK

SOUTH KOREA

Products China

(by import)

Malaysia

(by export)

Plywood 1 10

Particleboard 3 1

Veneer 5 3

Sawntimber 12 2

Products UK

(by import)

Malaysia

(by export)

BJC 4 2

Mouldings 6 9

Plywood 6 6

Products S. Korea

(by import)

Malaysia

(by export)

Veneer 2 1

Mouldings 3 5

Fibreboard 3 21

Particleboard 3 2

Plywood 4 2

Sawntimber 5 16

Wooden Frame 5 25




18

AUSTRALIA THAILANDProducts Australia

(by import)

Malaysia

(by export)

Veneer 1 6

Fibreboard 3 8

Wooden Frame 3 2

Plywood 3 7

Wooden

Furniture

3 4

Mouldings 4 2

BJC 4 1

Sawntimber 5 23

Products Thailand

(by import)

Malaysia

(by export)

Particleboard 1 8

Sawntimber 1 1

Fibreboard 2 34

Plywood 2 8

BJC 2 9

Wooden Furniture 2 12

Mouldings 3 20

Wooden Frame 3 11




19

SINGAPORE THE PHILIPPINES Products Singapore

(by import)

Malaysia

(by export)

Sawntimber 1 12

Mouldings 1 8

BJC 1 3

Fibreboard 2 35

Wooden Frame 2 6


Veneer 3 10

Plywood 3 12

Particleboard 4 10

Products The

Philippines

(by import)

Malaysia

(by export)

Particleboard 1 5

Sawntimber 1 3

Fibreboard 2 12

Veneer 2 5


Plywood 3 15



MALAYSIA: Export of Timber, Palm Oil & Rubber Products (2010–2017)

20Source: Ministry of Primary Industries (MPI) Malaysia

6.3 6.5 6.4 6.1 6.25.5 5.3 5.4

19.3

27.2

23.6

20.0 20.2

16.2 16.4

18.1

8.1

10.79.3

8.57.2

6.4 6.0

7.5

0.0

5.0

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15.0

20.0

25.0

30.0

2010 2011 2012 2013 2014 2015 2016 2017

USD

Bill

ion

TIMBER & TIMBER PRODUCTS PALM OIL & PALM-BASED PRODUCTS RUBBER & RUBBER PRODUCTS

Palm oil

Rubber

Timber

21

Performance Forecast

Malaysia’s Timber Export Trend

22

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

1995 2000 2005 2010 2015 2020

USD

Mill

ion

Exports (USD million) Linear (Exports (USD million))

Malaysia’s Timber ExportsVs

World’s GDP

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-1

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6

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1,000

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4,000

5,000

6,000

7,000

8,000

GD

P %

Exp

ort

s (U

SD M

illio

n)

Exports (USD million) World GDP

Malaysian Export of Timber Products Seasonal Adj. Forecast Forecast: 2019 - 2021

24

0.0

1,000.0

2,000.0

3,000.0

4,000.0

5,000.0

6,000.0

7,000.0

8,000.0

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USD

Mill

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2016 2018fExport Forecast

Malaysian Export of Timber ProductsSeasonal Adj. Forecast: 2019 - 2021

25

Logs

Sawntimber

Plywood

Veneer

MouldingsChipboard/Particleboard

Fibreboard

Wooden Frame

BCJ

Wooden Furniture

0.0

500.0

1,000.0

1,500.0

2,000.0

2,500.0

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USD

Mill

ion

26

Issues and Challenges

Market Challenges

▪ Prevailing global market developments that may affect demand for Malaysia’s timber

& timber products

Japan• Its policy to promote the use of local wood may have a negative impact over a longer

term. • Legal Wood Use Promotion Law (Clean Wood Act 2017)

• Maturing plantation forest in Japan will increase the supply of domestic-manufactured plywood in the Japanese market for concrete forming plywood and pose competition to imported tropical plywood from Malaysia.

USA• Faster-than-expected increase in interest rate could potentially affect housing demand.• “American First” Foreign Policy to bring back jobs to the USA may discourage demand

for imported products.• US-China Trade tension may lead to the dimming of global economic growth

India• Longer-term economic outlook remains promising on the back of growing affluence.

27

Market Challenges

▪ Prevailing global market developments that may affect demand for Malaysia’s timber & timber products

European Union• Uneven growth prospects in the EU • Declining demand for tropical hardwood by France, Italy & Germany.

UK• Economic activities slowed markedly post ‘Brexit’ referendum. • Cost of import for building materials has increased following the

depreciation of Sterling Pound.

China• China is navigating a slightly slower growth to avoid hard landing.• Rising housing prices in large cities & excessive housing inventories in

smaller cities are risks to Chinese property market.

28

Market Requirements

Ever-changing global regulatory requirements

1. European Union Timber Regulation (EUTR)

2. EU-FLEGT Voluntary Partnership Agreements (VPA)

3. US Lacey Act 2009

4. US Formaldehyde Standards for Composite Wood Products Act & California Air Resources Board (CARB) Requirement

5. Australian Illegal Logging Prohibition Act 2012 (AILPA)

6. Japan “Clean Wood Act” (May 2017)

29

30

Market Prospects

Key Markets Outlook▪ ASEAN

• Tapping potential market of 725 million population

• Buoyant economies of the Philippines & Vietnam

▪ Europe

• Growing competition from Indonesia & Vietnam

▪ Middle East

• Volatile geopolitical situation & persistent high budget deficits

▪ China

• Moving towards high tech & clean industries and a huge population of growing affluence

▪ India

• Large population with growing affluence & government economic reforms

▪ USA

• Strong employment & rising housing starts

▪ Japan

• Tokyo Olympic 2020 boost demand for timber & timber products 31

Malaysia’s Involvement in FTAs

• Malaysia has implemented 13 Free Trade Agreements:

32

ASEAN1. ASEAN-China (2003)2. ASEAN-Korea (2006)3. ASEAN-Japan (2009)4. ASEAN-India (2010)5. ASEAN-Australia-New Zealand (2010)6. ASEAN Trade In Goods Agreement

(2010)

BILATERAL1. Japan (2006)2. Pakistan (2008)3. New Zealand (2010)4. India (2011)5. Chile (2012)6. Australia (2013)7. Turkey (2015)

FTAs under negotiation• Regional Comprehensive Economic Partnership

(RCEP)

• Malaysia-European Union FTA

• Malaysia – Iran FTA/ PTA

33

CPTPPA

Trans-Pacific Partnership Agreement (TPPA) now known as the Comprehensive

Progressive Agreement for Trans-Pacific Partnership Agreement (CPTPPA)

after USA withdrew from the pact.

34

Moving Forward

Moving Forward

1. Growing demand for timber & furniture products made from

sustainable & legal timber.

2. Aggressive & effective promotion on Malaysian timber products

through e-trade and marketing platforms.

3. Further adoption of technology & innovation for timber & furniture

products.

4. Strengthen strategic alliance with international timber

associations.

5. Greater engagement with stakeholders for marketing

collaboration.

6. MTC will organise ‘Malaysian Wood Expo’ in 2019.35

Thank you

36

www.mtc.com.my

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