MTC Marketing Seminar 2004 : Strategies For Growth In Timber Business

Datuk Anifah Aman delivering the Minister's keynote address at the seminar In tandem with the improved global economy of late, there is a greater optimism in the immediate future for Malaysia's timber sector. In 2003, export earnings grew by 6.9% to reach RM 16.3 billion, with better export performance evident in nearly all timber products. Plywood and veneer together fetched RM4.4 billion while logs and sawntimber contributed RM2.3 billion and RM2 billion, respectively. Furniture, both wooden and rattan, remained the star performer with RM4.7 billion in export earnings. Mouldings contributed RM594.4 million while MDF and joinery products showed improved performance with exports totalling RM978.6 million and RM803.7 million, respectively.

Although the Malaysian timber industry has made commendable achievements, the industry players should not be lulled into complacency because the challenges that lie ahead are even more daunting. Minister of Plantation Industries and Commodities, Datuk Peter Chin Fah Kui said while it is prudent for the industry to maintain existing markets, efforts to develop new markets should be vigorously pursued. "Creating opportunities in yet-to-be-developed markets are vital to strike a balance between exporting to traditional markets and developing new markets. This helps to mitigate business cycles so that slacks in certain markets can be offset by increased uptakes in other markets that are growing," said the Minister in his keynote address delivered by his Deputy, Datuk Anifah Aman at the MTC Marketing Seminar 2004. Held on 15 July in Kuala Lumpur, the theme for this year's seminar was "Timber Markets 2004 – Strategies for Growth in Your Business".

(From left) Mr John Bagley. Mr Shoji Kumagai. Mr S.K.Tham (chairperson) and Mr. Ian Fuller in the first session. Among those present at the seminar's official opening were MTC's Board Members and guests from the UK, Germany, the Netherlands, Denmark and Italy who were on the MTC Familiarisation Programme for European Trade and Media Representatives.

"Apart from venturing into new markets, our industry needs to also build upon its strength in advanced wood manufacturing to produce high quality value-added timber products for niche markets. In this respect, the initiative by the industry together with MTC, Malaysian Timber Industry Board (MTIB) and Forest Research Institute Malaysia (FRIM) to utilise lesser-known timber species for the production of laminated scantlings is much welcomed," said Datuk Peter Chin. According to the Minister, the laminated scantlings project is very much in line with the Malaysian government's objective in encouraging product development and utilising lesser-known timber species. "Marketing the laminated scantlings as a service package, whilst of adopting our target markets' quality standards, branding and warranty is an approach that is customer-driven and consonant with current marketing practices. The novel marketing strategy adopted in the project could also serve as a model to market other value-added timber products;' he added.

(From left) Mr. Tarek Mohamad Zaid Hashem, Mr. Jerzy Karpinski. Dr. Eric Ng (chairperson) and Mr. Brent J. McClendon in the second session. The Malaysian timber industry is also encouraged to strive to improve its image. Branding and image building will not be adequate unless manufacturers satisfy consumers' requirements and preferences more precisely. This has to be underpinned by improving product quality, standards and design as well as being alert and proactive on issues pertaining to globalisation and trade liberalisation, new regulations and environmental concerns. "Change is pervasive, constant and accelerating in the market. A high level of flexibility is necessary and transformation is vital. However, I believe the industry is sufficiently resilient to overcome these challenges, especially with the support of the Government and other related agencies

to make further progress as a leading tropical timber producer," said Datuk Peter Chin.

Earlier, in his welcoming remarks, MTC CEO, Dato' Ismail Awang said the MTC Marketing Seminar 2004, the fourth in its series, was in tandem with MTC's efforts to provide market intelligence to the industry to enable the industry to be adequately prepared in facing fierce competition in the global market. "One of MTC's priorities is to position Malaysia as an important international player for tropical timber products by enlarging market share in the traditional markets and developing a stronger presence in new emerging markets;' said Dato' Ismail."Towards this end, MTC is running a number of trade facilitating activities to promote our timber products. Besides increasing the number of timber trade fairs overseas for participation by industry members in line with the objectives of raising awareness and interest on Malaysian timber and timber products, the Council has also set up a market advisory committee to meet the needs of the industry;' said Dato' Ismail, adding that two working committees, one for Central Europe and the other for the Middle East, were established under the market advisory committee. Following a successful fact-finding visit to Poland, Czech Republic and Hungary by the working committee, the Council will be mounting a full-fledged marketing mission to these countries in October 2004.*

High on MTC's priorities is to position Malaysia as an important global player for tropical timber products, said Dato' Ismail Awang Some 100 participants attended the one-day seminar which featured a distinguished panel of speakers who are eminent members and professionals of their respective timber industries and areas of expertise. Mr. John Bagley, a timber consultant from Australia, kicked off the seminar programme with a paper titled "Australia – Where is the Timber Market Heading?" in which he unfolded the strategic future direction for the Malaysian timber trade to remain competitive in the land down under. In "Japan –The Re-awakening of the Giant", Mr. Shoji Kumagai of Sojitz Corporation, highlighted several strategies for manufacturers to penetrate the Japanese market, among other issues and market insights. Mr. Ian Fuller of Ian Fuller Agencies presented a paper on "South African Market for Timber Products – Prospects and Challenges".

Mr. Tarek Mohamad Zaid Hashem of Basheer Hashem Sons Co., enlightened seminar participants on Saudi Arabia's booming building and construction industry in his paper "Opportunities and Strategies for Malaysian Timber Trade to Saudi Arabia". Mr. Jerzy Karpinski of DLH Poland, shared with the audience the strategies to capitalise on the current market situation in Poland being a new member of the European Union in his paper "Poland – Doing Business with EU's Newest Member"."US Lumber and Panel Markets – Boom or Gloom?" was presented by Mr. Brent J. McClendon of the International Wood Products Association (IWPA), Alexandria, Virginia, USA. Mr. McClendon said it is important to note that Malaysia holds a positive reputation among IWPA importers, with its members citing Malaysia's well-developed infrastructure and exemplary forest management as major pulses in doing business in the country.

Overall, many of the participants felt that they had benefited from the insight into various markets provided by the speakers. Numerous questions were posed to the speakers during the Panel Discussion.

* Note: Malaysian companies interested to participate in the MTC's Marketing Mission to Czech Republic, Poland and Hungary on 30 October-9 November 2004, are requested to contact Ms Noraihan / Ms Alexis Chang at 03-92811999 ext. 112/117.