The main wood-based industries are sawmilling, plywood/veneer manufacture, wood moulding and furniture manufacture or wood working. Others include secondary and tertiary processing industries such as timber treatment plants, kiln drying plants, pulp and paper mill, wooden houses prefabrication plants, laminated board plants, boxes and crates plants, pencil factories, match factories and parquet flooring plants. In addition, Peninsular Malaysia also produces a variety of wood-based panels other than plywood which include blockboard, chipboard, moulded particle board and medium density fibreboard plants.
Of the wood-based industries, sawmilling is the largest in the country followed by veneer/plywood and moulding mills. In 1995, there were a total of 1193 sawmills in the country with an installed capacity of about 24 million m3 while the total number of veneer/plywood mills was 163 with a total installed capacity of about 13 million m3. Currently, there is only one pulp and paper mill in Malaysia which is located in the State of Sabah. Details on the forest industries in Malaysia is attached as Appendix 2.
In recent years, the forest industries are rapidly moving away from the manufacture of low value primary products. This is in line with the national objectives and priority where the development of secondary and tertiary wood processing industries are being actively promoted with a view towards achieving greater utilisation of the resource base and to generate higher value-added products. Moreover, realising the role of forest industries in improving the socio-economic level of the rural population, steps are also being taken to encourage the setting up of small scale rural-based industries using forest produce such as rattan and bamboo as raw materials.
Except for a number of integrated timber complexes that had been established and owned by the State Economic Development Corporations, most of the timber industries are owned by the private sector.
The forestry industry has been identified as one of the resource-based industries to be further developed as an important export-oriented sector. It is the Government's objective to make Malaysia a major producer of high value added wood-based products in the world market as stipulated under the Second Industrial Master Plan 1996-2005. Specifically, it is envisaged that Malaysia should become an important furniture and joinery/mouldings centre. Various policy measures have been implemented to create an environment conducive to the accelerated growth of the sector. However, the forest industrial sector has to brace itself for an environment of stiff competition, growing protectionism and mounting pressures of environmentalism and conservation, if it is to successfully carve a niche for itself in the international market.
As for the future, it is anticipated the number of wood processing mill particularly that of primary processing will undergo restructuring in response to the declining supply of raw materials. This in return will reduce existing capacity of the wood processing mills to a much more reasonable level with production of processed timber in tandem with the availability of supply and export. In transition, import of raw materials, particularly logs/square logs and to a smaller extent veneer may increase to supplement requirements by domestic mills. Export of value-added products may also increase as domestic manufacturers try to maximise the value of the raw materials utilised.
