Updated on Sunday, 12 August, 2018 11:30:53 PM

The Timber Industry in Malaysia

Shorea sumatrana is a forest tree species belonging to the family Dipterocarpaceae. This large-sized timber tree is widely distributed across Sumatra, Thailand and Peninsular Malaysia, particularly in the east coast region. Frequently, it grows in low lying swampy habitat along river banks. Shorea sumatrana is locally known as balau sengkawang ayer. In Indonesia, it is called kayu meranti. It has small fragrant flowers with yellow petals and looks beautiful with its pink base. The stem is straight and smooth with small buttresses. The wood is grouped as heavy hardwood. The timber is used for heavy construction, such as housing poles and bridges.

The stems produce resin or dammar known as gusi dammar, gummy dammar or cat’s eye dammar. The resin was traditionally used for making torch and now is used to produce paint, varnish, lacquer, cosmetic and in the pharmaceutical, dental and linoleum industries. It is also used as emulsifier and stabilizer for paint products and printing inks.

The conservation status of the species is critically endangered. This is the consequences of destruction to its habitat. The flowering and fruiting sengkawang ayer trees can be seen near FRIM’s library, Urban Forestry office (building D13), and at the Rover Track entrance near the mosque.


Source : Forest Research Institute Malaysia.

A drop in timber sales and cause Sabah’s forests to lose economic value:

The Sabah Forestry Department has called allegations of widespread illegal logging in the state “wild and baseless,” adding that the dissemination of such allegations would cause a drop in timber sales and cause Sabah’s forests to lose economic value:

“We have reason to believe the unfounded allegations are politically motivated and not driven by any love for the environment. The allegations are therefore baseless and made with bad intention to discredit the sacrifices made by the state government to achieve good forest governance and sustainable forest management in the shortest time possible, despite the economic, financial and social challenges. Short-term licenses that cause tremendous damage to the environment are being drastically phased out and Sabah’s forest management credibility is at its highest — an open-book philosophy whereby logging and forest management areas are all open to third-party and NGO scrutiny.”


Barcode for trees to curb illegal logging : http://thestar.com.my/lifestyle/story.asp?file=/2012/7/31/lifefocus/11287268&sec=lifefocus

Timber Companies Asked to Obtain Certification : http://www.tempointeractive.com/hg/nasional/2012/07/26/brk,20120726-419446,uk.html

East. Kalimantan Police Sound Alarm Over Illegal Timber Flow to Malaysia : http://www.thejakartaglobe.com/nvironment/e-kalimantan-police-sound-alarm-over-illegal-timber-flow-to-malaysia/542358

Timber corruption scandal


The timber industry in Malaysia is one of long-standing prominence, garnering much attention as one of the economy’s core components of growth.

As Malaysia is well-blessed with an abundance of rainforest and land, the steady supply of trees and logs highlight the importance of this resource-based sector, ranking it among the likes of agriculture, oil and gas, mining and manufacturing.

Malaysia is among the world’s largest exporter of tropical logs, plywood, sawn-timber and furniture to international markets.
Specialists concur that this industry will not likely become redundant anytime soon.

As the world’s second largest industry after food, timber is a material with a wide range of uses, providing employment opportunities and raw materials with further flexible functions.

Malaysia is aggressively promoted downstream activities to become a manufacturer of higher quality and value-added products.

Malaysia Timber Industry Board (MTIB) believes that Malaysia can achieve a target of RM53 billion in the export of timber and timber related products by the year 2020.

So far, statistics from official records supported the direction of this segment’s growth.

In 2010 and 2011, Malaysia exported timber and timber products was worth RM20.52 billion and RM20.06 billion respectively.

Looking at 2011 performance, timber products export revenue clinched RM20.03 billion, contributing substantively to the national economic growth.

Sarawak collected RM7.08 billion from its timber export for the whole of 2011.
The highest export value within the past four years was in 2008 when the income recorded was RM7.91 billion. Sarawak's export revenue dropped to RM6.59 billion in 2009 but in 2010 it increased again to RM7.21 billion.
For the whole of 2011 Total Exports in Sarawak :
1) Logs 45.59%
2) Plywood 33.45%
3) Sawn Timber 10.67%
4) The rest were veneer, moulding, dowels, particle board, laminated board, flooring, woodchips, block board and other timber products.

The biggest market for Sarawak’s timber sector export for 2011 was :
1) Japan with 33%
2) India 16%
3) Taiwan 11%
4) Asia 10%
5) Middle East 9%
6) Korea 6%
7) China 5%
8) US and Europe 10%

Malaysia Export of Major Timber Products for January 2012


January 2012

Quantity Value % Change from 2011/2010
m3 '000 RM '000 million m3 '000 Value
Logs 299 159 -24.69% -27.06%
Sawn Timber 190 201 1.6% -3.83%
Fibreboard 74 91 -34.51% -13.33%
Plywood 248 401 -25.08 -11.87%
Builders' Joinery and Carpentry - 73 - -17.98
Wooden and Rattan furniture - 487 - -13.81
Others - 127 - -22.09
GRAND TOTAL - 1537 - -14.69
Source: MITB, Malaysia 2012


index of wood industries

Integrated Timber Complex, Pasir Putih, Tawau

Sawit Watch: an Indonesian network against oil palm plantations http://www.wrm.org.uy/bulletin/14/Indonesia2.html



Ricehusk Board (Papan Sekam Padi)

Ricehusk Board (Papan Sekam Padi)Ricehusk Board (Papan Sekam Padi)

Round Logs from KalabakanRound Logs from Kalabakan

Photo above : Round Logs from Kalabakan

 Wednesday May 23, 2012  Malaysian Government to give RM3bil to expand forest plantation

Malaysian Government plans to allocate RM3bil to expand the country's forest plantation by up to 375,000ha by 2020 to ensure sustainable and a guaranteed supply of raw materials for the wood-related industry.


“The Government is upbeat on the prospects of the wood-related industry and the allocation (financial) reflects our commitment in its development,''
“Malaysia is the eighth largest furniture exporter in the world and third in Asia,'' said Muhyiddin.

Deputy Prime Minister Tan Sri Muhyiddin Yassin
22 May 2012 speaking at the opening of the Malaysian Timber Industry Board showroom



Wood-related industry was one of the main revenue earners in Malaysia, generating a yearly export income of RM21.7bil from 2006 until 2010 and creating 300,000 job opportunities.

The wood-based industry contributed RM20bil in export revenue in 2011, representing 14.1% of the total RM141.2bil of the country's commodities exports.

Wooden furniture remained Malaysia's main wood-based product for export and in 2011, the total furniture exported amounted to RM6.5bil or 32.5% of the total wood-based products.

The plantation and commodity industries must continue their effort to develop Malaysia's wood-based industry by producing higher quality products and strengthening the export market.

National Timber Industry Plan, Malaysia could achieve the target of exporting RM53bil of wood-based products and emerge as the top three furniture exporters in the world by 2020.

In order for Malaysia to achieve that status, the local furniture makers must shift from own equipment manufacturing to own design manufacturing and own brand manufacturing.





New timber tracking tools to bolster global fight against illegal logging : http://blog.cifor.org/8835/new-timber-tracking-tools-to-bolster-global-fight-against-illegal-logging/

Japan, United States and India remain Malaysia core export destinations. Malaysian furniture business segment needed to be more creative in order not to be left out from the booming industry. Local furniture makers should innovate their products to be competitive both in design and cost terms.

Rebirth Control: Lessons Learned from 90 Years of Rainforest Regeneration
The world's oldest effort to regrow a rainforest suggests what the future may hold for other deforested regions



1. Malaysia will reiterate its commitment towards the principle of sustainable development which has been endorsed by the international community. While focusing on economic growth and development, Malaysia government will give equal emphasis to promote conservation of its natural resources and also to give adequate attention to social aspects as well. Despite of the robust development in the last few decades, Malaysia still manage to maintain about 59.5% of her total land mass under natural forest covers. Out of this, about 43 % or 14.1 million hectares of Malaysia's natural forests have been gazette by laws as Permanent Forest Estates (PFE) and other conservation areas such as; national parks, and wildlife sanctuaries.

2. Forests worldwide are being threatened by uncontrolled degradation and destruction mainly because of unsustainable human activity as well as due to forest fire. Equally threatening is the issue of global warming and unsustainable consumption of natural resources. Many countries are faced with a serious conflict in deciding on the right balance between productive and protective functions of the forest. Information on full cost internalization of all functions and values of the forest would be useful to improve the present under estimation of the value of the forest as an option in land-use allocations.

3. Malaysia underscore the importance of good governance and proper management of natural resources as amongst the core tools for achieving sustainable development. Malaysia's commitment to achieve sustainable forest management (SFM) necessitates tremendous efforts on our part, including changes at the policy level as well as effectively implements those policies. Internationally, greater focus should also be given to the constraints on market access encountered by timber exports from the developing countries in the global markets. Without market access and remunerative returns, forests have little value and will loose its importance.

4. The IPF/IFF proposals for action represent significant progress and consensus at the international level on how to move forward towards sustainable forest management from policy dialogue to action. However, a number of specific areas have impeded the effective implementation of the IPF/IFF Proposals for Action, including the lack of financial resources, technical and institutional capacity, especially in developing countries, as well as a lack or even the absence of national legislation and institutions that are adequately equipped to implement existing conventions and other instruments.

Malaysian Timber is graded according to the Malaysian Grading Rules (MGR).

The Malaysian Grading Rules (MGR) is an internationally recognized grading rules for which Malaysian Timber Industries Board is the Grading Authority. Grading ensures the elimination of defects and blemishes which can affect the strength and performance of timber.

Malaysian government in order to further enrich forestry resources, fast growing timber species such as Meranti tembaga, Merawan and Sesenduk will be planted.

The planting of high value trees such as teak and  trees for paper and pulp is encouraged.


These are very few true softwoods of commercial significance in Malaysia. None are durable in the tropics. The main difference between the timber of Hardwoods and Softwoods (conifers) is the absence of vessels (pores) in Softwoods.


These include all the relatively light weight and soft timbers which range in density from about 400 to 720 kg. per cu. m. at 15 per cent moisture content. They are the 'general utility' timbers of Malaysia, comparable with the general utility timbers in temperate climates; the latter however, are mainly softwoods (conifers).

In addition to general utility purposes many of these Light Hardwoods are excellent for high class joinery work, cabinet making, furniture, decorative panelling, etc. Although not naturally durable in tropical climate, some are quite durable in temperate regions. Provided that proper precautions are taken against attack by wood destroying agents, the Light Hardwoods as a whole make very satisfactory timbers for general construction even when used in tropical climates.


These are moderately heavy to heavy constructional timbers ranging in density from 720 to 880 kg. per cu. m. at 15 per cent moisture content. Some of these timbers are heavy and strong enough to be classified as 'Heavy Hardwoods' but under tropical conditions they lack sufficient natural durability when exposed to the weather or in contact with the ground unless they are properly treated with preservative before use. Most of them however, are naturally durable in temperate countries where climatic conditions are less conducive to the activity of the destroying agents.


These are heavy or very heavy constructional timbers ranging in density from about 800 to 1,120 kg. per cu. m. at 15 per cent moisture content. They are naturally durable as they contain within their tissues some toxic materials, e.g. alkaloides or other substances repellent to wood destroying agents and can therefore be safely used without preservative treatment even in positions exposed to fungus or termite activities; the sapwood of these timbers, however, is not durable.

Malaysia is richly endowed with tropical forest resources and is one of the world's leading producers and exporters of tropical timber. The vast forest resources have enabled the country to establish processing industries geared for the world markets.

Forests of Malaysia

The total forested land in Malaysia is estimated to be 20.56 million hectares, with 5.82 million hectares in Peninsular Malaysia, 4.46 million hectares in Sabah and 10.28 million hectares in Sarawak. Permanent Forest Estate (PFE) covering 14.33 million hectares or 43.6% of Malaysia's total land area of 32.86 million hectares has been earmarked. Of this, 3.49 million hectares are classified as Protection Forest where no logging is permitted and 10.84 million hectares as Production Forest where sustainable timber harvesting is carried out. Besides the PFE, 2.12 million hectares are dedicated to national parks, wildlife sanctuaries and nature reserves.

Of the 20.56 million hectares of forests 87.5% or 17.99% million hectares are dipterocarp forests, 1.74 million hectares are fresh-water swamps and 0.63 million hectares are mangrove forests. The dipterocarp forests are characterized by the predominance of the family Dipterocarpaceae with many species of the genera Anisoptera (Mersawa), Dipterocarpus (Keruing), Dryobalanops (Kapur), Hopea (Merawan & Giam). Shorea (Meranti & Balau) and Parashorea (Gerutu).

There are altogether 2,650 tree species in Malaysia, of which 408 species have been identified as commercial species which can be utilized for a wide range of applications.

In Malaysia, the conversion of forests for agricultural purposes has been undertaken with environmentally-sound land use practices and carried out systematically under the country's 5-year development plan.

Most of the cleared forests have been replaced by tree crops such as rubber, oil palm and cocoa. These crops covering 4.8 million hectares have contributed to the greening process making a substantial part of the country (77.2%) still under forest and tree cover.

Forest policy & legislation

The forest resources in Malaysia have been systematically managed since the beginning of this century when the first Forest Officer was appointed in 1901. Over the years, ecologically and environmentally-sound forest conservation and management practices have been developed to ensure forest renewal and sustained yield.

The National Forestry Policy was formulated and officially adopted in 1978. This Policy was revised in 1992 to take into account the conservation and sustainable utilization of biological diversity, the participation of local communities in forestry and the enhancement of ecotourism. The salient feature of the National Forestry Policy are as follows:-

i. to dedicate as Permanent Forest Estate sufficient areas strategically located throughout the country in accordance with the concept of rational land use under four major functions, namely:-

• Protection Forest

• Production Forest

• Amenity Forest and

• Research and Education Forest.

ii. to implement a planned programme of forest development through forest regeneration and rehabilitation operations;

iii. to promote efficient harvesting and utilization within the production forest and to stimulate the development of appropriate forest industries commensurate with resource flow;

iv. to increase the production of non-wood forest produce through scientific and sustainable management practices;

v. to provide for the conservation of biological diversity and areas with unique species of flora and fauna;

vi. to encourage private sector investment in forest development;

vii. to undertake and support intensive research programmes in forestry and forest products;

viii. to undertake and support a comprehensive programme of forest training at all levels for the public and private sectors;

ix. to promote education in forestry and undertake publicity and extension services; and

x. to promote active local community participation in various forestry development projects and to enhance their involvement in agro-forestry programme.


Implementation of the National Forestry Policy is aimed to ensure:

 • the sound climatic and physical condition of the country;

| • the safeguarding of water supplies and soil fertility;

• the minimizing of damage by floods and erosion to rivers and agricultural land;

• the supply in perpetuity and at reasonable rates of forest produce for further processing, manufacturing and export;

• the conservation of adequate forest areas for recreation, education, research and protection of the country's flora and fauna.

Harvesting and rehabilitation

Forest harvesting in the PFE is always carried out by selective cutting as opposed to clear felling. Only 7 to 12 trees, out of 500 trees per hectare, are allowed to be removed per harvest. These trees must measure at least 45 cm in diameter at breast height. Directional felling of marked trees is strictly adhered, to reduce damage to the remaining trees. A minimum of 32 trees, at least 30 cm at breast height, are left behind for the second harvesting cycle.

In the moist tropical climate, regeneration after harvesting occurs quite naturally. However, where necessary, rehabilitation of the harvested forests is carried out to enable young trees to achieve faster growth. Enrichment planting is carried out at areas poorly stocked with preferred species.


Plantation programmes have been implemented to supplement timber supply. Today, about 196,846 hectares of plantation forests have been established mainly in Peninsular Malaysia and Sabah. Moreover, increasingly, agricultural tree crops has supplemented wood supplies from the natural forests. Wood from rubber trees is a case in point. In recent years, Rubberwood also known as Heveawood has emerged as a popular timber species for furniture and is well regarded as a renewable resource and environment friendly material. Research and development is being conducted to utilize oil palm trunks and fronds for the manufacture of reconstituted panels.

Malaysian Criteria and Indicators

Malaysia is intensifying its efforts towards achieving sustainable forest management and will ensure that the ITTO Guidelines for Sustainable Management of Natural Forests and its Criteria for the Measurement of Sustainable Tropical Forest Management be fully realized. In this regard, the National Committee on Sustainable Forest Management in Malaysia was established in February 1994 at the Ministry of Primary Industries, Malaysia. The National Committee has formulated a total of 92 activities to operationalise the ITTO's 5 criteria and 27 indicators on sustainable forest management at national level. Recognizing each individual state in Malaysia as a Forest Management Unit (FMU), the National Committee had also identified a total of 84 activities to be implemented at the forest management unit level under ITTO's Criteria and Indicators. Against each activity identified, the Forestry Department of Peninsular Malaysia has also formulated management specifications (benchmarks) for its effective monitoring and evaluation. Management specifications have also been formulated by the respective Forestry Departments of Sabah and Sarawak. All these management specifications need to be realized by the year 2000 in accordance with Malaysia's commitment to the ITTO's Year 2000 Objective.

International cooperation in forestry

In the wake of global concern for the environment, Malaysia attaches importance to international co-operation and consultation on forestry issues. The country has been actively involved in international, regional and bilateral arrangements on forestry and timber trade development issues.

At the international level, organizations such as the FAO, UNDP, World Bank and the International Tropical Timber Organization (ITTO) have rendered technical and financial assistance towards forestry development in the country. Malaysia is an active member of ITTO and subscribes to the ITTO Objective Year 2000.

Malaysia also fully subscribes to the Statement of Principles on Forests and the various forestry programmes under Agenda 21 adopted at the United Nations Conference on Environment and Development (UNCED) held in Rio De Janeiro, Brazil in June, 1992, as well as the Convention on Biological Diversity which Malaysia has ratified on 2 June, 1994.

Malaysia has and will continue to participate actively in the post UNCED discussions on forestry under the United Nations Commission on Sustainable Development (UNCSD) especially the Intergovernmental Forum on Forests (IFF), in ensuring the early implementation of the UNCED decisions on forestry.

Currently, Malaysia is carrying out bilateral cooperation forestry projects with a number of countries such as Denmark, the European Union and Japan.

Timber certification

As part of Malaysia's efforts to ensure sustainable forest management as well as to facilitate the trade in timber from Malaysia, the National Timber Certification Council, Malaysia was incorporated in October, 1998. It is responsible for the development and implementation of a timber certification scheme in Malaysia.

The role of the Council would also include the development and implementation of standards as well as training programmes related to timber certification; establishment and implementation of a system to oversee and monitor the implementation of the certification scheme, including appeal mechanisms; establishment of networks and cooperation with national and international bodies to facilitate cooperation and mutual recognition arrangements; and collection, processing and dissemination of information related to timber certification and sustainable forest management.

Forests are of prime importance to the Malaysian economy. It generates income, employment and foreign exchange earnings and serve as an excellent base for industrial development. It is thus very much to its interest that Malaysia continues to manage its forest resource on a sustained basis. The Malaysian forests will remain a renewable resource and will be managed to ensure a balance between economic, ecological and environmental needs of the country.

The viability of the downstream processing industry is important to the wood-based sector as a whole. Towards this end, the Ministry of Primary Industries,  will continue to play its role in formulating appropriate policies and strategies to ensure the viability and competitiveness of the wood-based industry in the next millennium. In this context, the active participation by the timber industry towards government programmes is a step in the right direction in the spirit of Malaysia Incorporated.

Challenges to the marketing of Malaysian wood products are indeed many and diverse. Changes in the market scenario brought about by globalization, liberalization, technology advancement, policy changes as well as labor and raw material shortages have to be constantly dealt with. Nevertheless, with the constant improvement undertaken by our manufacturers and continuous support from the government for the industry, Malaysian timber industry, particularly the furniture sector, will continue to grow from strength to strength.

Encouraged by Malaysian government's policy of promoting an export-led manufacturing sector as the engine for growth, Malaysian wood-based industries have in recent years adopted aggressive business strategies to expedite globalization and penetration into non-traditional markets.

The Malaysian timber industry exports registered an all-time high at RM14.9 billion in 1998, thus maintaining its position as a major foreign exchange earner for commodity products. It is gratifying to note that downstream processing activities in particular the furniture sector has been developing rapidly. Furniture exports (wooden & rattan) in 1998 reached RM3.3 billion and are expected to exceed RM4.0 billion by the end of 1999.

The Malaysian timber industry remains a major foreign exchange earner. In 1997 timber and timber products contributed RM14.7 billion or 7 percent of total export earnings of the country. In 1998, the timber industry remained prominent even though exports dropped to RM14.2 billion.

In 1998 there were over 5,200 timber processing mills, the major ones of which are 1,193 sawmills, 179 plywood and veneer mills, 344 moulding plants, and approximately 2,900 furniture factories. The wood-based industry is adequately supported by timber preservation and kiln-drying facilities. In addition, there are also 11 particleboard plants, nine medium density fiberboard (MDF) plants, six wood cement board plants, 41 laminated board plants, ten prefabricated house plants, ten wood chip plants and six wooden toy factories. The industry provides employment to more than 211,000 people.


Sawmills 1,193
Plywood/Veneer mills 179
Moulding plants 344
Furniture factories (approx.) 2,947
MDF plants 9
Kiln-drying plants 259
Timber preservation plants 179

Source : Forestry Department Malaysia

Voluntary "donation" subject to income tax:

A voluntary payment may change in character and be subject to tax. This can happen if it is given repetitiously, as consideration for services rendered, in return for any benefit of any kind, or if the amount is used in a business activity to sustain business operations.

Inland Revenue Board (IRB)
Chief executive officer
Datuk Seri Sabin Samitah
Thursday June 7, 2018



In line with the Government's policy to develop downstream processing of timber, the production of value-added products such as mouldings, joinery and furniture have been actively promoted. Fiscal incentives such as the Pioneer Status, Investment Tax Allowance, and Abatement of Adjusted Income For Export are provided to promote the growth of such industries.

The domestic market, especially in Peninsular Malaysia, remains important for primary processed and value-added timber products. The construction sector continued to be the major end-use sector but due to the economic crisis affecting Malaysia and the Asian region, the construction sector declined sharply by 24.5 % in 1998, compared with a growth of 9.5 % in 1997. About 2.0 million m3 of sawn timber and 356,856 m3 of plywood were consumed in the peninsula registering a decline of 34.2% and 34.3% respectively compared with 1997.

Exports of sawn timber in 1997 totaled 3.0 million m3. In 1998, sawn timber exports declined to 2.7 million m3 due to a drop in demand from markets in Asia. Major markets for sawn timber were Thailand, P.R .China, Taiwan, Singapore, Japan, Netherlands and the Philippines.

Plywood exports in 1997 reached a peak of 3.8 million m3 and then dropped to 3.6 million m3 in 1998. Major markets were Japan, P.R China, the United States, Taiwan, Singapore and Netherlands.

Veneer exports reached to 746,600 m3 in 1997 and then declined to 730,400 m3 in 1998. Major markets were P.R. China, Taiwan, Japan and Korea.

Export of mouldings reached RM 782.6 million in 1997 but lowered to RM 745.2 million in 1998. Major markets were Japan, Taiwan, the United States and P.R. China.

The wooden and rattan furniture industry, on the contrary, showed a positive growth. Exports of wooden and rattan furniture expanded further in 1997 and 1998 to RM 2.6 billion and RM 3.3 billion respectively. Major markets were the United States, Japan, Singapore, the United Kingdom and Taiwan.

The various sectors of the industry must continuously upgrade their product quality in order to improve their position in the market. In line with this objective, the government encourages the adoption of high technology as a means to overcome the increasing cost of raw materials and shortage of skilled labor as well as increasing production capacity. In addition, the government supports market diversification, and off shore sourcing of raw materials.


Government Departments in Tawau

• Addresses of MTIB Offices


• A Sustainable Resource of Malaysian Forest
• The Wood- Industry of Malaysia
• Port Facilities in Malaysia


• Local Timber Trade Associations
• Overseas Timber Trade Associations


Commercial Timbers of Peninsular Malaysia
Harmonized Commodity Description and Coding System
Strength Grouping of Timbers
Strength Groups & Their Applications
Recommended Standard Timber Sizes for Building Components
Timber Grading Marks
Metric Equivalents
Timber Export Statistics (1994 - 1998)


• Exporters/Suppliers/Manufacturers of Timber Products in Peninsular M-Malaysia
• Graders and Jetty Operators
• Exporters/Suppliers/Manufacturers of Timber Products in Sabah and Sarawak


Classified Index
List of Exporters (Peninsular Malaysia)
List of Suppliers/Manufacturers (Peninsular Malaysia)
List of Exporters (Sabah)
List of Suppliers/Manufacturers (Sabah)
List of Advertisers
Guideline to change in telephone numbers by Telekom Malaysia