The way forward for bumiputera companies in the timber industry is to leverage their inherent strength in crafts and woodwork to create intricate Malaysian designs for high value-added furniture.
KUALA LUMPUR: It is important to ensure that initiatives and programmes to develop the Malaysian timber industry are created based on the needs of the companies operating in the sector, in order to remove bottlenecks and plug the gaps in the ecosystem.
Recognising this, the Association of Malaysian Bumiputra Timber and Furniture Entrepreneurs (PEKA) has embarked on a survey on the actual status of its members across the country, in order to collect data on the impact of Covid-19 on their businesses.
Its president Tuan Haji Hanafee Haji Yusof said, “What we’re looking at is to get data on the impact the pandemic has had on their businesses and see how government assistance can aid in helping recovery and enable them to position themselves to be ready to capture the market with the right capabilities.”
Peka is focusing on removing bottlenecks and plug the gaps in the ecosystem in order to facilitate the growth of bumiputera timber industry players, said Hanafee.
Formed in 1991 with the principal aim of promoting and further developing the bumiputera participation in the timber industry, PEKA cuts across 12 types of businesses in the timber ecosystem, representing around 200 members as a cohesive and collective platform that provides assistance to its members in terms of material resources, technical expertise, product design, marketing and promotion, as well as consultancy.
It also collaborates with government agencies and the private sector to undertake research and development, which is then shared with its members to help improve their businesses. For instance, sharing SIRIM’s knowledge on installing solar power to its members in order to significantly reduce their electricity costs.
But PEKA is not twiddling its thumbs while the relevant data is being collected, as it is moving away from traditional ways of doing business by proactively adopting a digital strategy to adapt to the new norm.
“For digitalisation, we conduct consultancy with members to create data that can be updated at regular intervals to identify any need for intervention, which will be done by the end of the year,” he shared.
The association helps its members leverage the Bumiputera Digitalisation Programme, as well as the Malaysian Timber Council (MTC) Digital Marketing Entrepreneurship Programme, in order to train its members on how to use digital platforms to conduct marketing activities and reach out to a wider segment of customers.
At the moment, PEKA is working in collaboration with MTC to engage its diverse members across the different timber sub-sectors on a one-of-a-kind e-commerce platform to ensure that its members and the timber industry as a whole can benefit from cross-trading within the industry.
While online selling holds huge potential, Hanafee pointed out that there is also a need to look into product reengineering, a programme that is currently under review.
He explained, “While the opportunity [on online platforms] is broader than normal showroom sales, the problem is in product delivery, as the cost of delivery is often high. So we’re engaging designers to start at the drawing board, in terms of product reengineering to optimise costs from packaging to delivery, but also achieving on-time delivery and in good condition.”
Moreover, PEKA is involved in the MTC’s TIMB3R Design Incubator Programme, to assist the Malaysian timber and furniture industry to grow and upgrade along the design and brand value chain, which Hanafee said is the future for bumiputera entrepreneurs, as it builds on their core strengths in crafts and woodwork to cater to the global market.
He shared, “Normally, bumiputera players are involved in original equipment manufacturing (OEM) for furniture and they don’t have their own products. What we’re doing is to take them to the future by moving into developing products with original design manufacturing (ODM).
“We want to involve PEKA’s members in export via ODM, in the crafts and woodwork elements that they excel in, leveraging our expertise to assist the industry to advance further in creating high value-added products with intricate designs that define Malaysia. The focus is on quality, instead of quantity, to drive higher margins with uniquely Malaysian designs for the international markets.”
In order to identify the gaps in the market, timber companies often depend on new product development to stay competitive to further expand their market reach. Thus, to ensure the time and cost invested in new product development does not go to waste, he said that it is essential for timber companies to understand market needs and wants.
“What we need to do now is undertake market intelligence to see what products we can supply in domestic markets and then expand it to the regional level,” he said, adding that there is good opportunity for bumiputera timber industry players to expand their market in Indonesia, Brunei, Singapore and other Asean countries.
Hanafee also said that PEKA is working together with its peers in the timber industry for raw materials development, such as bamboo, in order to diversify supplies and sources of raw materials for downstream activities.
