Forest Plantations in Malaysia

In 2003 the Malaysian Timber Council (MTC) completed and handed over to the Ministry of Plantation Industries and Commodities (MPIC), an important study on the establishment of large scale forest plantations in Malaysia to alleviate the pressure on the country’s natural forests. Based on the study’s recommendations, MPIC set a target to establish 375,000 ha of forest plantations by 2020. The target is to plant 25,000 ha of forest plantations per year for 15 years, starting from 2005.

Once successfully implemented, every 25,000 ha of mature forest plantation is expected to produce 5 million m³ of timber. Malaysia’s climate and soil conditions are highly conducive for the fast growth of tree plantations. Up to September 2016, a total of 112,008.43 ha of forest plantations have been developed under the Forest Plantation Development Programme. A total of RM600.4 million (US$145 million) of government loan has been disbursed to develop forest plantations. The first forest plantation projects are due to mature in 2021 and are located in Kelantan, Pahang and Selangor in Peninsular Malaysia and in Sarawak, with an expected yield of 3.78 million m³ of logs.

Currently, the plantation programme is mainly focused on two species, namely Rubberwood (Hevea brasiliensis) and Acacia mangium. Other additional species promoted under the programme include Teak (Tectona grandis); Sentang (Azadirachta excelsa); Khaya (Khaya ivorensis/ Khaya senegalensis); Kelempayan/Laran (Neolamarckia cadamba); Batai (Paraserianthes falcataria) and Binuang (Octomeles sumatrana).

A company called Forest Plantation Development Sdn. Bhd. (FPDSB) has been established by the Ministry and it is now managed by the Malaysian Timber Industry Board (MTIB). FPDSB manages the disbursement of government loans, the auditing of the plantations and the provision of technical support and training for the programme. Local and foreign companies are eligible to participate in the forest plantation programme. Loan facilities are extended by the government for eligible companies. According to MTIB, 114,355.43 ha have been developed under the programme and 50 companies have taken part in 2016. A total of RM1.2 billion (US$360 million) has been set aside by the Malaysian government in the form of loans for companies interested in establishing forest plantations.

With forest plantation development well under way in Malaysia, it is only a matter of time before a good amount of raw material makes its way into the Malaysian wood-processing industry. The beneficiaries of timber from plantation forests will not only be the obvious downstream woodworking mills that produce indoor and outdoor furniture, but also mills that manufacture mouldings, doors and flooring. This is exactly the result that MTC envisaged when it first conceptualised and conducted the study on the establishment of large-scale forest plantations.