Samling Timber Malaysia focuses on sustainability

Samling Timber Malaysia chief executive officer Lawrence Chia.

SOURCING timber from conventional forests has always been a challenge.

Nevertheless, as businesses worldwide face mounting pressure to adhere to environmental, social and governance (ESG) requirements, the need for sustainable timber sourcing has become imperative.

Recognising the dual necessity of meeting global timber demand and combating climate change, Samling Timber Malaysia chief executive officer Lawrence Chia says the group has moved its focus from conventional forests to planted forests known as industrial tree plantations (ITPs), through their “Timber 2.0” initiative.

To note, the integrated timber company currently manages approximately 1.2 million ha of forest land and 190,250ha of gross forest plantations in Sarawak.

Shifting focus

As global demand for timber continues to grow, Chia says, Samling aims to meet the need through its ITPs.

“By utilising most of the wood resources from ITP sources, we are able to re-engineer our downstream operations to include new markets, methodologies and products in our plywood, flooring, kitchen cabinet and furniture businesses.

“Wood residues from these operations are further utilised for our fibre businesses, such as biomass pellets, to fully embrace our zero-waste policy,” he explains in an email to StarBizWeek.

Having been in the business for 60 years, Chia acknowledges that a major change such as moving the group’s dependency of timber source from conventional forest to plantation will not be an easy task.

“But we are greatly encouraged by the fact that our trajectory is in line with the Sarawak state government’s initiative towards meeting future demands for wood resources from plantations through the development of one million ha of sustainably managed plantation forest in the state by 2025.

“Achieving that would mean that the natural forest will be left to continue to regenerate,” he adds.

Moreover, Samling’s commitment to sustainability extends to carbon sequestration and reforestation efforts.

In terms of sustainable reforestation, Chia says, the group believes that ITP is an active cyclical effort of responsible planting, harvesting, and replanting.

“Our ITP practices are guided by the Malaysian Timber Certification Scheme, which is endorsed by the internationally recognised Programme for the Endorsement of Forest Certification to ensure transparency and compliance,” Chia notes.

The company has identified areas within its ITPs, like the peat swamp forest in Marudi, Sarawak, as high conservation areas, contributing significantly to carbon sequestration and aligning with the Sarawak government’s green economy initiatives.

“Peat swamps not only play a significant ecological role, but are also important carbon sinks. We undertook an environmental assessment of the area, which indicated that the peat swamp forest in Marudi is very deep and contains a significant amount of carbon,” Chia adds.

As an integrated wood company, Chia says Samling’s operations span from nursery to mill, allowing for full traceability and accountability in every step of its process.

He says the group’s operations start in its own nurseries where seedlings that populate its ITPs are cultivate.

“After harvesting, these logs are transported directly to our mills, where they are transformed into a diverse range of products, from solid wood furniture to fibre-based door skins and wood pellets. “Our zero-waste policy ensures that all parts of the harvested timber, including manufacturing residues and smaller, irregular logs, are utilised, minimising waste and maximising resource efficiency,” he says.

Generating carbon credits

On Samling’s conservation and reforestation efforts, Chia says the group has identified Verra’s Verified Carbon Standard (VCS) programme as the most fitting choice for the validation and verification process of our project as it is the most extensively utilised greenhouse gas (GHG) crediting programme globally.

“Verra VCS projects are subject to regular independent third-party verification. This programme was selected for its relevance to forests and forested peatlands, which requires GHG emissions to be verified.

“The programme manages emissions in two forms, principally reduction of GHG emission into the atmosphere and the removal of GHG emissions from the atmosphere,” he notes.

Chia says the Marudi forest conservation and restoration project, registered under Verra’s VCS, spans 35,045ha and focuses on avoiding timber harvest and drainage of peatlands, while also exploring reforestation of degraded lands.

This comprehensive approach not only enhances biodiversity but also supports the livelihood of local communities through sustainable economic empowerment activities.

“That is very important to us, ensuring that we are doing right by the environment, which will then positively impact the community. We are focused on ensuring that the community is better off as a result of us executing this project.

“The Marudi forest conservation and restoration project is focused on protecting the existing carbon stock by conserving and restoring the landscape, including hill forest, peat swamp forest, and Kerangas forest,” he adds.

Chia believes it is essential for the project to demonstrate that the carbon activities produce a net positive impact on the environment.

Consequently, via Verra’s validation and verification process, he believes the group is able to claim high integrity carbon credits.

“The successful implementation of this programme will result in carbon credits being issued, representing the quantum of GHG emissions measured in tonnes of carbon dioxide equivalent (tCO2e) arising from the reduction of GHG emissions into the atmosphere and the removal of GHG emissions from the atmosphere,” he says, adding that the current market price for carbon credits in nature-based voluntary markets ranges between US$2 and US$3 per tCO2e.

As the world continues to tackle climate change, Chia says, the practical implementation of the Paris Agreement in achieving global milestones, such as reduction of carbon emissions, acceleration in global energy transition from fossil fuels, and building resilience to compounding climate issues in developing countries, has become more urgent.

As such, he expects the carbon credit market to remain important and robust in the future.

“For Samling, carbon projects are expected to be another revenue source to complement our existing revenue stream. At the same time, our intention is to create a positive impact on the carbon equation, the community, and the environment in lands that are placed in our care,” Chia explains.

With ESG playing a significant role in supply chain management, the company aims to align with like-minded stakeholders and reduce its carbon footprint.

“This will be challenging but it’s not a bridge too far,” he says.

He says participation in forest carbon projects and peat restoration initiatives remains an integral part of Samling’s journey to contribute to the country’s efforts in mitigating the effects of climate change.

Transparency and public engagement are also pivotal to the company’s strategy.

By clearly communicating its actions and the benefits they bring to the environment and society, Samling aims to enhance public understanding and support for its projects.

Overall, while the journey to carbon neutrality is complex, Chia sees significant opportunities not just for the company’s operations but also for the communities and environments it interacts with.

Focusing on ITPs as a significant wood source is in line with the increasing global demand for more sustainably sourced wood and Samling is confident that the upfront costs involved are an investment into its long-term viability.

“To remain competitive, we must change. As we streamline our operations and enhance our ESG credentials, we expect not only to see an improvement in our bottom line but also to enhance our competitive position in the timber industry,” he says.

Chia believes the transition to ITPs will position Samling at the forefront of the industry’s shift towards sustainability, which is rapidly becoming a determinant of market leadership.

“By adhering to these practices, Samling not only meets the evolving preferences of customers and stakeholders but also ensures compliance with international regulatory standards, securing market access and future growth prospects,” he adds,

Samling’s strategic focus is expected to yield significant returns as markets continue to reward companies that prioritise sustainable practices.