Timber firms cut log production

KUCHING: Three Sarawak-based public-listed timber firms Jaya Tiasa Holdings Bhd, Subur Tiasa Holdings Bhd and WTK Holdings Bhd cut their tropical log production last year, resulting in timber supply remaining tight in the state.

Their log output was reduced by between 3% and 16.5% over 2012. Their combined production volume fell by about 225,000 cu m to nearly two million cu m.

Ta Ann Holdings Bhd, which has yet to report December’s production figure, is likely to have also trimmed its log output last year as the January-November volume had dropped by about 5% to 369,000 cu m from 387,800 cum in the same period in 2012.

Jaya Tiasa, the biggest logging operator among the four Sibu-based companies, harvested about 1.06 million cu m of logs last year, down from 1.18 million cu m in 2012, representinga decline of some 121,300 cu m or over 10%.

Its average monthly production last year stood at 88,540 cu m against 98,655 cu m in 2012.

Last year’s peak production of 103,882 cu m was in August while the lowest monthly output of 60,557 cu m was in February.

December production was 90,795 cu m, according to Jaya Tiasa’s latest filing with Bursa Malaysia.

Jaya Tiasa has forest concessions covering more than 713,000 ha (gross area).

Subur Tiasa recorded a 16.5% decline in production volume to about 503,800 cu m last year from 603,680 cu m in 2012 or lower by more than 99,800 cu m.

The group’s average monthly production shrank to below 42,000 cu m from 50,300 cu m year-on-year, with the highest monthly production of 73,401 cu m, also in August, while January saw the lowest output of 24,963 cu m.

Controlled by the diversified Rimbunan Hijau group, Jaya Tiasa and Subur Tiasa registered combined log production of nearly 1.57 million cu m last year against 1.78 million cu m in 2012.

The 2012 figure was 21.5%higher than 1.47 million cu m in 2011.

WTK recorded a more than 3% drop inlog output to some 426,600 cu m from 441,400 cu m in 2012 or an averagemonthly production of 35,500 cu m.

Sarawak’s three other leading timber groups Shin Yang, Samling and KTS all have major logging interest. However, their log production figures were not available.

Both Jaya Tiasa and Subur Tiasa have expected continuing lower production volumes to sustain the current firmed log prices.

India is Sarawak’s largest export market, which absorbed about 60% of the state total log export in the past few years.

Jaya Tiasa, Subur Tiasa, WTK, Ta Ann, Shin Yang, Samling and KTS are all Sarawak’s key exporters of timber products like plywood and sawn timber.

According to Jaya Tiasa senior manager (sales and marketing) Woung Lik Chiong, the Indian market has been rather stable in both demand and prices for Sarawak logs.

The state’s annual log production had dipped to below 10 million cu m in the last two years from the peak of some 19 million cu m in early 1990s.

The state government allows up to 40% of the state’s log production to be exported with the other 60% reserved for the local downstream industry to be processed into value-added timber products.

With tighter supply due to declining production volume, Woung has anticipated an improvement in log prices not only for India but also the overall export market.

To better manage the state forest as timber is a depleting resource, Jaya Tiasa had said that it would select good quality timber species with high market value for harvesting.

Besides logging and manufacturing of timber products, all the state’s major timber companies have diversified into the oil palm and forest plantation industries.

Jaya Tiasa, which has increased its investment in the oil palm industry, recorded double-digit growth in the production of fresh fruit bunches (FFBs), crude palm oil (CPO) and palm kernel last year.

The group’s FFBs output surged by about 22% to more than 742,200 tonnes from 608,700 tonnesin 2012 while CPO and palm kernel production volumes rose by over 15% and 20% to about 65,100 tonnes and 10,800 tonnes respectively, from 56,450 tonnes and 8,990 tonnes in 2012.

WTK, a newer player in the plantation industry, more than doubled its FFBs output to 15,740 tonnes last year from 7,320 tonnes in 2012.

December production soared to 1,581 tonnes from 736 tonnes year-on-year.

Last year, WTK had targeted to establish an additional 2,000ha of oil palm plantations to bring total planted areas to 11,700ha.

In 2012, the group carried out new planting on 1,200ha.

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