KOTA KINABALU: The Sabah Timber Industries Association (STIA) has appealed to the state government to allow the sector to operate during the movement control order (MCO) period, saying the industry is at risk of losing millions of ringgit.
Its president, Chua Yeong Perng, said there are 100,000 and 120,000 cubic metres of felled logs, valued at between RM35 million and RM45 million, currently sitting idle due to the MCO.
The STIA also estimates there are 120 containers, with timber products worth between RM9 million and RM10 million, stuck at ports and at various factory locations.
“The value and quality of the logs continue to deteriorate each week.
“We expect, overall, these felled logs would have lost at least 15% to 20% of their inherent value. Certain non-durable species have lost nearly all its commercial value by now,” he said in a statement here today.
Critical problem of expiring wood adhesives
In addition to this, Chua said downstream mills are now faced with the critical problem of wood adhesives expiring.
If partial production is not permitted over the next few days, he said 963,000kg of plywood and woodworking adhesives will need to be disposed of.
“The value of adhesives and the disposal cost will come to between RM5 million and RM8 million. There is the concern also that Sabah may not have the facilities to dispose of such quantities in such a short time-frame.
“STIA is extremely concerned that the combination of the above factors will ultimately impact the industry’s short-term ability to cover employee wages for April and the months after,” he said.
As such, Chua appealed to the government to grant special permission during the current MCO period for ready shipments to be exported.
He said this is to avoid massive adhesive disposal problems, adding selected factories with expiring adhesives should also be given restricted production days in order to use up their adhesive stock.
He added the authorities could take the initiative to allow movement of raw material and manufacturing to progressively start within timber clusters (Keningau, KKIP, Ladalam, Kimanis) that are not deemed high-risk areas for Covid-19.
Meanwhile, Chua said the economic impact of losing four weeks of productivity from March to April will have far-reaching consequences on the forest and timber industry, and potentially more if the MCO is extended beyond Apr 14.
“STIA has serious concerns over the industry’s capacity to cover wages in May, June and July.
“Shipment of ready goods, controlled movement of perishable raw materials (felled logs) and systematic re-starting of manufacturing will go a long way in improving the industry’s ability to maintain and pay its workforce.”
If the MCO is extended after its expiration on April 14, Chua suggested that the government allow for certain upstream and downstream activities to commence operations.
“It is recommended that the authorities refer to other states in Malaysia, like Sarawak and Johor, which have permitted scaled-down manufacturing operations to commence.
“STIA feels that it is neccessary for the Sabah government to consider making minor changes to (its regulations) during this MCO period. This will at least allow the industry to help itself in the interim.
“If remedial action is not taken, during and after the MCO, the repercussions would be irreversible.”
Chua said the timber sector has 30,000 full-time employees and between 5,000 and 10,000 part-time workers, adding that at least 50% of the workforce in the upstream and downstream sector will be facing job cuts.
Due to the inherent remote location of timber factories and logging camps, most companies have at least 40% of its workforce residing in living quarters within factory premises or logging camps.
“Consideration should be given for these workers to be allowed to commence work immediately. Social distancing within the tight confines of worker quarters has no additional advantage over factory or camp operational areas,” he said.
By default, he explained, workers’ quarters act as quarantined areas since entry and exit is restricted and controlled by security personnel.
“Since the implementation of the MCO, companies have proven to have successfully controlled and monitored the welfare conditions of workers staying in company quarters.”