KUCHING: Jaya Tiasa Holdings Bhd
’s log production has been hit by the logging suspension imposed by the authorities in concession areas along the Baleh hydroelectric power plant flood zone.
The suspension has also affected concession areas of several other timber companies operating there, according to chief executive officer Datuk Jin Kee Mou.
The 1,285MW Baleh hydroelectric dam project site is located about 105km upstream of the Baleh River’s convergence with the Rejang River in Kapit Division, central Sarawak.
The project, the biggest hydroelectric dam undertaken by state-owned Sarawak Energy Bhd, will comprise a 188m-high concrete faced rockfill dam about 225m above sea level and a ground power plant with five turbines.
The dam is designed to create a reservoir volume of up to 29,867 million cubic meters (cu m). Construction works for the project commenced in late 2018 and the dam is scheduled to be operational in 2027.
Jin said the suspension on logging activities had affected Jaya Tiasa’s log production volume, which fell by 41% to 111,307 cu m in the 12-month period to June 30,2022 (FY22) from 188,843 cu m in FY21.
Jaya Tiasa group’s combined timber concessions span a total area of 412,478 ha in Sarawak. It is not known what is the size of the affected concession area located in the Baleh flood zone.
In a yearly review of the group’s timber operation, Jin said due to lower production volume, Jaya Tiasa’s log sales dipped by 17% in FY22 from FY21 and contributed 11% to group revenue of RM810.8mil.
The remaining 89% of group revenue came from its oil palm business.
Jaya Tiasa shut down its loss-making plywood manufacturing business two years ago.
“The average export price of logs, supported by high global demand and a favourable exchange rate, was higher at US$231 (RM1,097) per cu m from US$191 (RM907) per cu m in the previous year,” he said in the company’s 2022 annual report.
Year-on-year (y-o-y) log export prices jumped by 21%.
The group exported 83% of its logs to India, 11% to South Korea, 5% to Japan and 1% to Taiwan.
“Most of our customers were loyal clients who had established long-term relationship and trust in us, an essential criterion amidst the challenging economy,” said Jin.
Going forward, he said log prices are likely to stay strong as the impact of the Russia-Ukraine crisis on supply chains worldwide had created a demand for timber as well as affecting the prices of commodities, including timber prices which have increased y-o-y.
“The group recognises the need for responsible timber harvesting through the adoption of sustainable best practices in the management of the forest resources.
“In line with the environmental, social and governance principles, measures already in place will be reviewed from time to time through the introduction of new or enhanced policies for a more effective discharge of all our ground activities for production efficiency, while at the same time ensure protection and conservation of the biodiversity and the impact on the local communities.
“Forest management certification audits are well underway and we are optimistic of solving any non-conformity and obtaining the certification for our forest management units,” added Jin.
On reforestation, Jin said Jaya Tiasa had developed 35,655 ha of forest plantations with fast-growing timber species that will generate sustainable log supply in the long run.
He said planting activities had been affected during the restrictions imposed on workers under movement control order of the Covid-19 pandemic and labour shortage.
The company will carry out aggressive planting activities, including with the help of increased mechanisation and workers’ recruitment, to meet the deadline set by the Sarawak government to fully plant the land allocated by 2025.
“Sustainable log supply from the forest plantation via ecologically and environmentally-sound forest conversation and management practices is our strategic path to ensure preservation of the natural forests to conserve biodiversity and reduce greenhouse effect.
“This is echoed in our sustainable forest resources development endeavours to expand out planted forest area with fast-growing tree species such as eucalyptus deglupta (kamarere), eucaluptus pellita, albizia falcataria (batai) and kelampayan as a long-term project.
“This strategy for forest plantation has been gradually implemented through phase approach,” said Jin.
