Stirring Asean sustainable Forestry Summit 2025

Daily Express

3 days ago

Published on: Sunday, August 10, 2025
Published on: Sun, Aug 10, 2025
By: Kan Yaw Chong Text Size: At the Asean Summit (from left): Tan Peng Juan, Rahman Khan, Melvin Ku, Dr Firdausi Suffian, Norman Wong and Prof Chin Yew Sin. THE Panel 1 at this Summit on July 29 was 'Sustainable Forestry Investments in Asean'. Moderator Melvin Ku, Programme Manager (Forestry and Biomass), Control Union (Malaysia) Sdn Bhd, asked the five panellists their perspectives on this question:
Advertisement 'On the state of forestry investment in Asean, where do you see the momentum of concern? ' Each panelist was given five minutes to state their views. The summit was co-organised by the Strategic Institute for Asia Pacific (KSI) and the Asean Economic Club. Tan Peng Juan, President of Sabah Timber Industries Association.
Advertisement Major timbers traded are all planted species now. 'Well, if you look at the timber industries and forestry sectors, when you look at the global picture, what we're seeing today is timber trades globally is about 4 billion cubic metres a year, derived from plantations and natural species of timber that's going around. And with this figure, it's actually gradually growing from an annual of 1pc to 2pc growth. This goes to show that the timber industry itself is continuing to progress and continue growing. So those old saying that timber is a sunset industry is practically not true. We have done so much in conserving the forests and also to promote the industries. But out of the 4 billion cubic metres of timber traded in the world, who are the biggest exporters? It's Canada, America, Sweden, Germany, these are all developed nations. They have gone beyond harvesting of natural timber from the natural forests. They have gone into plantations. And major timber traded are all planted species. And compared to the Asian scenario here, just now Tan Sri Majid Khan is rightfully saying that, you know, the Vietnamese model of timber regeneration and how it has helped the economy-driving the economy to $18 billion in trade. He went further by saying it's sustaining a million households - a million households. That's how fast, how much economic generation it has achieved. But it does not happen overnight. Since the 90s there were initiatives from all the government interest in all these tree plantings within the region … I still remember, as Tan Sri Majid Khan also mentioned, Vietnam used to buy industrial timber from Sabah. I know that, they bought acacia from the northern part of Sabah, the Benkokah Peninsula area, to bring back to their country for their furniture making. But now, every year, Vietnam self-generate about 41 million cubic metres of timber for their own furniture making and generate $18 billion of export. It's a huge achievement. So it's a very viable investment that they embarked on. And when it comes to Malaysia, it has a success story. One of the success stories I want to share is the rubber wood. Rubber tree was initially planted in Malaysia to alleviate poverty, to help the rural area to introduce economic activities. But later on, due to replanting, trees were being introduced into rubber furniture sector. And it just took off to generate $12 billion exports of furniture industries we have in Malaysia. All this actually helps. These are all the success stories which happened in our Asean region, Malaysia, and globally. It certainly proves that this industry is viable and definitely those who don't see it too bad, Thank you.' Rahman Khan – Group CEO & Executive Director of Jawala Inc on its one single mission: The state of forestry investment in Asean from an Industrial Tree Planting perspective – the Jawala experience 'I DID not see anything written on ITP there, but thank you for bringing it up because Jawala's whole idea of a sustainable forest management policy is all about replacement and substitution of the natural forest, which is through industrial tree plantations. Now, Sabah is a special place for growing trees. Now, we have identified all the fast-growing species with varying densities, from 250 kilograms per cubic meter all the way up to 700kg/m3 with the Eucalyptus pelita. Now, to give you an idea that can already replace your Merati, your Serayas, your Kapur, your keruing, especially in the construction or structural application industry. If you look at Jawala Inc., if you go to our website, you will not see a vision and mission of Jawala. We only have one single mission, and that mission is to replace and substitute tropical timber. Our trials and research have proven that we can produce on a ratio of seven to one at five years. Now, that is a rotation advantage of about four times versus tropical forests. We have done that with two species that we have. I always call this the magical tree of Sabah, which is the laran. Not much has been spoken about it, but, you know, I think this is a species or tree that is worth promoting. It is indigenous to Sabah. It is very much sought after now. We are exporting it to Poland now, Japan, Korea. Let me get back to what the world outlook is like for the timber industry. The FAO (Food and Agriculture Organisation) has forecasted that we're going to need around 5.2 billion cubic metres of wood by the year 2050, 3.1 billion coming from round wood industrial, which is for your plywood, your furniture, and whatnot, and 2.1 billion will be for energy. Now, Malaysia has an energy transition program, but I do not see anybody looking at ITP as a source. Now, we are already planting our trees. I think my colleague from Indonesia is harvestable at four years, and they are all for the wood pellet market or for the bioenergy market. This is also a viable alternative for Sabah - 400,000 hectares that we're going to develop for ITP. Now, that's going to produce between six and eight million cubic metres. Let me give you an idea, because one of the subject matters is between oil palm, which they consider as profitable, and how is ITP going to be a choice between oil palm and ITP? Sabah generated around RM15 to 17 billion from the oil palm industry in the year 2023, but that requires 1.5 million hectares to deliver that number. If Sabah were to produce that 6 to 8 million cubic metres a year, if you take the Vietnam numbers, for example, their log conversion to product translates to about 1,500 ringgit per cubic metre from log to product. If you can produce that 6 to 8 million cubic metres that are going to come from the harvest of only 40,000 hectares a year and you need 1.5 million hectares from oil palm to generate 15 billion. That 8 million cubic metres is going to generate you around RM11 to 13 billion from the harvest of only 40,000 hectares per year. But Sabah can go up to RM20-30 billion through ITP if a furniture ecosystem is in place. This based on 6-8 million m3/year of ITP log production. That is log to product conversion value of RM2,500/m3. So, what else is there? I think that's the most viable alternative. People are talking about carbon. Now, don't forget, sustainable forest management is tied to communities, biodiversity, and environment. Now, let me ask you this question. Take a look at the carbon project. How much can you generate per year per hectare? Your sequestration rate is around 10 to 20 pounds. And with the ongoing price of carbon at 50 ringgit, that's only going to generate you around 1,500 ringgit per hectare per year. How are you going to look after the communities, the biodiversity with such a revenue? Now, the ITP offers you 60,000 ringgit per hectare per year. You know, I always tell the government, don't worry about investing in the communities. With tree planting going on, with a revenue of 60,000 ringgit per hectare, the FMUs can take care of the communities. Now, I agree with the carbon project, Melvin. It should continue. But with the replacement of ITP with tropical timber, you can slowly set aside your natural forest management, to conservation, and then on to carbon. So we have an interesting future ahead of us because the yields that have been proven in Sabah, far supersede Sarawak and West Malaysia. So there is this baby here that I think is real worth nurturing. The government should ensure that all ITP investments can become profitable so we can look after the ESG (Environmental, Social and Governance), the people for the government.' Dr Firdausi Suffian, Chief Executive Officer, Invest Sabah Bhd Asean is a huge trading bloc in an uncertain world – being third largest in Asia, it can do more to 'Prosperity Thy Neighbours'. 'WELL, I guess there's a lot of unusual things happening around the world today. So first of all, we know timber. I think both our panelists have given us an outlook, sneak peek of the timber industry. But look the world of look today is a bit unusual, we all know recently Trump Donald Trump like to take credit on everything, Because of Trump and his tariff move this region, Asean has now become even stronger and deeper economic integration. Now leaders of all Asian countries, the overarching goal is to think how to integrate our economies now. Forests aside, now the Asean global export hold 40pc now, that is really huge. Two-fifths of the world exports is in Asia and Asean is in Asia and we are the hub of global production network. So when it comes to sustainability, the world will not have net zero without Asia. Net zero that is a clear cut vision. When we talk about the economy, growth, development of forestry, it goes without saying sustainability is the main theme. Now Asean is the third largest economic block in Asia and set fifth largest in the world with $3.8 trillion GDP and a 600 million population. If you think about it we don't need the rest of the world to be honest, and we hold 40pc of the global exports if you think about it. But of course we don't weaponise interdependence. If you look at it Malaysia, it is the 36th largest economies in the world. Malaysia cannot achieve that status without this state of Sabah which is one of the economic powerhouses to Malaysia. One thing though, you know things are very uncertain, we somehow cannot trust the global production, the world trading system, some countries talk about free trade but in the end come up with protectionist tools. So remember subnational economic integration is very important. When I say subnational, here is this Borneo region, you have Sabah, the economic powerhouse to Malaysia, Sarawak goes without saying, an economic powerhouse as well, then Brunei, a sovereign state and Kalimantan which you know, the new capital city will be in Kalimantan. What is the common economic profile of Borneo? We all are rich with resources, rich with forestry, you name it, we have oil, forests you know – everything so rich. With that, remember the GDP for Borneo states was Rm140 billion last year and the growth rate is 3.5 percent recorded every year. And showed positive trajectory after Covid-19. It shows that this region is a gateway to Asean which is the third largest economic block in Asia. So, today, it is timely and necessary we talk about sustainability and of course against the backdrop of forestry. I have five minutes for a quick look at Sabah, we have seen it, you know when it comes to sustainability, it is self-evident When it comes to forestry policy, I think we are one of the best in the world Of course, there are some challenges when it comes to FMU and of course, the ITP or Industrial Tree Planting. When it comes to sustainability, there are so much potential when you look at Sabah, especially in forest policy. If you look at recent statements from our chief conservator, the revenues from timber royalties is RM16 million, revenues from forestry itself is RM 170 million - from both natural forests and forest plantations If you look at diversifying our forest resources it is in place as well, integrating sustainable approach , you know we focus on Payment on Ecosystem Services (PES) – revenues from non-timber produce, as well and coming up with carbon credit - maybe something that we should look at. If you one hectare can absorb 10 tons of carbon, you know just have to preserve the forest. Of course it has its own challenges. The way forward? When we discuss about forests, the Number One thing that goes without saying is sustainability while inclusivity has to be incorporated. I always have this mantra on 'Prosper thy neighbour'. Borneo states are progressing, so much that when it comes to for the sustainable practice, we should not let perfect be the enemy of good. Whatever we do we cannot marginalise the community.' Norman Wong, President of Timber Association Sabah The three burning questions 'THANK you KSI (Strategic Institute for Asia Pacific) for inviting me, I would like to ask three questions and I will answer in relation to sustainable forestry investments in Asean. The first question is: Is forestry an asset or is forestry an industry? 'If forestry is viewed as an asset, it means that it's a selling price minus your planting cost minus your extraction cost divided by your capital and that will give you your ROI (Return On Investment). But if you look at it as an industry then it must be coupled with the economic value chain where the resources are processed and marketed. Why is the economic value chain important? Because it is the foundation to capture value and to add value to the timber and economic value chain is a necessary condition to scale up the industry because without scaling up you won't have the economies of scale and it will not be competitive. And as Tan Sri (Majid Khan) has said and also Rahman (Khan) had put it, that forestry can contribute RM10 to 13 billion GDP per annum on a sustainable basis and also massive employment in the interiors. The second question I have is that what are the different classes of assets in our sustainable forest management license agreement? In fact there are two very distinctive classes of assets, that is, natural forest timber and their industrial tree plantations. Each have their own unique propositions. The natural forest is lesser known for his timber value but more for his ecological value. By that I mean carbon financing, biodiversity credits and payment for environmental services as Dr Suffian had said. Also, a lot of those natural forest species have found substitutes in the plantation timber. We have different densities and with different technologies you can easily replace all the natural forest species. For ITP its unique proposition is that it is homogenous, it is consistent, predictable, it is sustainable and that is a necessary condition to invest in the supply chain. And without investment you would not be able to scale up, you would not be able to have a profitable industry because if you have just resource but no processing in the ITP world, it won't work, as planting is very expensive, maintenance management is very expensive, you would be doing a lot of charitable work! As Raman has said, ITP on a per hectare basis is four or five times more productive than the natural forests, I would like to add another dimension to it in terms of harvesting cycle ITP is more productive than natural forests in space and time if you manage it well. One hectare of ITP can produce 200 cubic metres of timber whereas natural forest will produce 40 cubic metres (5x factor in space). ITP rotation is 10 years whereas natural forests will take 25 to 50 years per rotation (2.5 to 5 x, in time) Therefore ITP can be 25 times more productive than natural forests. The third question is if you talk about investment you must talk about ESG (Environmental, Social and Governance) and how is our license agreement sustainable forest management license agreement related to ESG, I would argue that our SFMLA (Sustainable Forest Management Licence Agreement) is the elder brother – the 'dai gor', and the same genetic blueprint as ESG because in the SFMLA you have a triple bottom line – economic, social and environment. For ESG you have environment social and governance, the difference is the G but the SFMLA handles the G very well. If you look at our SFMLA system, the governance side is handled by the TLAS (Timber Legality Assurance System) audits and certification audits which are checks on your governance because you look at the land use rights, the community rights and whether you are following the environmental laws and so forth. So in fact, I would say that our SFMLA is actually more comprehensive and more holistic than ESG. A point that brought up by Tan Sri (Majid Khan) is that Europe announced EUDR (European Union Deforestation Regulations) in 2020 and that is probably in response to the competitive pressure coming from the tropics because our rotation is much shorter, our production cost is much lower and they're not so competitive. Just to share with you Sabah shipped the first EUDR compliant shipment to EU last year and because we were the supplier of the raw materials, we were asked what did you do differently that you make it EUDR compliant? Well the answer is we just follow the framework, we follow the system and implement it accordingly and we are EUDR compliant and that is the standard and the quality of the framework of the SFMLA. I think Sabah is in good position, it has good foundations, good framework good legal system. The only thing I would like to add is Sabah speed is a bit slow. If we can do a lot more to expedite things but I think it in the long game we will win.' Prof Major (H) Dato' Dr. Ir. Ts. Br. Chin Yew Sin, JP A prime place for forest in Chinese character WHEN civilisation began about six trillion trees on earth. Now only about three trillion trees are left. You can see before civilization, the whole world was covered with trees and forests. You can see why trees, forests, timber are important. I am not talking about economic effects. I mean trees can capture carbon dioxide and give out oxygen. That's why trees are considered the lung of the earth. Eighty percent of the global warming is because of carbon dioxide emissions to the atmosphere but the trees and forests capture this carbon. That's why trees are very important for the survival of human beings in the long run. Without trees, global warming will happen faster. Another thing – trees are like green gold mines. All the speakers spoke in unison enormous value Sabah and other Asean countries an get from timber, from so many downstream industries and other industries that depend on these trees, even fire doors! Another advantage thing about forests, if you look at Chinese character 'rest (xiu)', it combines 'ren' or person on the left, and 'muk' or wood on the right. Meaning 2,000 years ago, the Chinese knew if you want to rest, you have to go to the forest or go to the woods where you can reduce your stress level, blood pressure. Recent studies found can get a lot of negative ions in the forests create positive vibes so that you can live longer. That's why few thousand years ago, Chinse were already saying if you want to relax, you have to go to the forests or the woods, look at the trees or greeneries, or walk around the trees, your mood is getting better, your blood pressure is lower and you can live longer. Even tourism nowadays talk about ecotourism. Asean countries can make money out of it – 10.3pc of the GDP come from tourism. That's why the eco-tourism industry support 2.4 million workers. That's why you can see forests not only make money as green gold mine, at the same time can provide so many downstream opportunities for workers. That's why forests are very important and at the same time now because of environmental conservation come up with carbon credit. So Malaysia can earn a lot of carbon credits because we got a lot of forests in Sabah and Sarawak also. So this is another unseen profit from carbon credit because Borneo forests are the oldest forests in the world. Sabah and Sarawak are part of Borneo so we enjoy a lot of carbon credits. Not only we can make money from the timber industry, at the same time, we enjoy other things like ecotourism industries. That's why very important preserve our forests industry and replanting is very important because Asean countries had lost 5.6 million hectares from 2000 to 2010 that's why I say replanting is very important.