No logs, no jobs, no future

Sabah's domestic timber industry has hit a crossroads and unless the government revamps its policy, it will see a natural death.

TAWAU: Nasir, 27, a father of three has been living on RM200 a month since May 2011. He and his wife work in a sawmill in Tanjung Batu Laut colony, near here.

To compensate for a cutback in his pay, he has been doing odd jobs but these too are rare.

“I keep hoping the situation will improve. I only had 10 days work a month in the last two months. I earn a daily wage.

“Before when I worked a full month, I use to earn about RM400 to RM600 a month. Now I am lucky if I get RM200.”

In a makeshift shack, 30 minutes drive away from this colony, another group of women are wondering if there will be work for their husbands tomorrow.

Hamisah is weary of strangers. Peeling the skin off a tapioca, which she is preparing for family’s lunch, she said her husband worked at a sawmill but had been without a job for four months.

“He has gone to work now but I don’t know if he has a job today.

“Some days he has work but many days he has nothing. Last month he earned RM200.

“It is difficult to find money now. We grow some vegetables like this tapioca and share the cooking,” she said, her views echoed by the two other women whose husbands are also working in the industry.

Nasir and Hamisah are not alone in their worry.

Some 10,000 others, who work in Sabah’s timber industry, are also in the same predicament.

But the state government does not seem to care.

No interest
The local operators have blamed the government’s policies and disinterest for the woes of the domestic timber industry.

Countless complaints over the government’s export of round logs despite an acute domestic need has been met with stony silence.

The Tanjung Batu Laut sawmill colony which was once a thriving hub is today almost a “ghost town”.

At its peak this colony was among those which contributed to Sabah’s export revenue.

According to Plantation Industries and Commodities Minister Bernard Dompok, “the major commodities exported from Sabah are plywood (RM1.2 billion) and sawn timber (RM641 million)”.

But these once active mills are now deserted.

Those that are still in operation are barely surviving, said one operator Gary Yap, who has predicted that at the current rate Sabah’s timber industry would see a natural death sooner than later.

Yap, 53, who has been in the business since the 1999, believes the industry is at a crossroads and the government must decide whether it wants to invest and develop the production and export of value-added products from Sabah, which is currently still low.

“The situation now is such that there is no timber for us. The state is exporting all its round logs. The government is not interested in the local operators or our arguments.

“We don’t see any interest from them in developing downstream activities. For now, the government doesn’t see that developing downstream activities can be profitable.

“Exporting round logs is a billion-ringgit industry for the state government,” he said, adding that the industry was monopolised by five players closely linked to the state leadership.

No work

Yap said another fact is that the majority of the workers in the sawmill industry are foreigners or Indonesians.

“These workers and their livelihood are of no concern to the government. The situation and urgency would be different if the workers were local Sabahans,” he said, while driving the FMT team through Tanjung Batu Laut.

Yap, who is the managing partner of Rinvision Sdn Bhd, stopped operations eight months ago when he could not get good quality logs for use.

“I stopped operations at my mill after failing to get good wood. I don’t mind paying the export rate for the round logs but the government doesn’t want to sell the logs to us.

“Now the mills here (Tanjung Batu Laut) are operating on scraps and poor quality timber.

“I can’t use this. I need good quality timber because I make wood window frames for export to Europe,” he said, adding that he was luckier than most operators because he owned the land on which he built his factory.

According to Yap, who is a chemical engineer by profession and a father of four, he has been losing RM300,000 since shutting down operations eight month ago.

“But I’m luckier than the other operators. This is my land and factory. I don’t have to worry about rental and debts. Some of the mill operators are paying RM50,000 a month in rent.

“I don’t have that worry. Now we are just maintaining a skeleton staff at half-pay to maintain the factory. There is no real work,” he said, adding that he was now looking at alternative business.

Yap cannot see a future for the timber industry in Sabah, not with the current policies in place.

“If the situation doesn’t change, I don’t see a safe future for the timber industry here. The government can say Sabah still has a lot of timber, but I don’t believe so.

“The forest is being depleted. Look at the forest reserve land in Meratoi. I still remember how dense it was… now you can see it thinning.

“It’s not just the deforestation… it’s also the encroachment of illegals and foreigners into these forest reservations,” said Yap, who supports environmental conservation in Sabah.

Time for revamp

Last week, the Sabah Timber Industry Association (STIA), after months of silence, called for the reduction of log exports from Sabah.

According to STIA, there was a need for the local mills to restructure and for the government to revamp its policy on log procurements and distribution systems in Sabah.

While noting the benefits of the timber industry’s economic spin-offs, which included the transport and warehousing industry, shipping and forwarding service, the construction and infrastructure development of factories, it also called for the local industry to be given equal opportuntiy to purchase all logs extracted before they are exported.

“A fair system should be worked out by the state government in full consultation with the industry for log procurement and distribution policy.

“The log export royalty should be increased to reflect the fair profit margin for the log exporter and the state government.

“At least 20,000 M3 of round logs per month should be put on the open market for tender, open to all purchasers, local and overseas.

“And as there is insufficient supply of raw material, it is only logical for the state government to open up the importation of logs.

“No permit or quota should be imposed on importation.

“The industry should have a free hand to purchase from any source countries, ” noted STIA in its recommendations to the state government.

But it remains to be seen if the Chief Minister Musa Aman-led administration will take up on STIA’s recommendations.

Posted in: Free Malaysia Today