MTCC updates industry members on Malaysian and German timber trade

MTCC’s webinar “Timber Trade 2020: Malaysia and Germany – Status, Challenges, Perspectives”

The COVID-19 pandemic is changing the norms in forestry and timber industries across the globe, posing numerous challenges and creating new opportunities for both producing and importing countries.

In light of the global health and economic conundrums, the Malaysian Timber Certification Council (MTCC) organised a webinar titled “Timber Trade 2020: Malaysia and Germany – Status, Challenges, Perspectives” at its premises on 27 October 2020. The webinar was held to give the latest update on sustainable forest management and certification in Malaysia and the status of timber trade between Malaysia and Germany to industry players and stakeholders in both countries.

Germany and the European Union (EU) have been important business partners for Malaysian tropical timber and furniture industries for decades. Malaysian timber-based agencies such as MTCC and the Malaysian Timber Council (MTC) have been working closely with the German Timber Trade Federation (GTTF) over the years to facilitate and promote the trade of sustainable Malaysian timber products to Germany.

Three topics were presented at the webinar which was moderated by KaiserCommunication GmbH (Germany) founder and Chief Executive Officer, Guntram Kaiser. MTC Deputy Chief Executive Officer, Wong Kah Cane presented a paper titled “Overview on Latest Developments in Malaysia-EU/Germany Timber Trade.” Highlighting MTC’s recent study on the impact of COVID-19 outbreak to the industry, Wong said the pandemic has disrupted the local timber supply chain following the Movement Control Order (MCO) imposed by the Malaysian government in March.

“By June 2020, however, more than 90% timber product manufacturers have resumed operations, with 60% resuming their export activities. This situation is resulted from the economic stimulus packages injected by the Government as well as the re-opening of China economy. Despite facing disruptions during the earlier MCO period mainly in terms of demand from the Middle East, East Asia and some parts of Europe, the Malaysian timber industry is seeing new orders coming from the United States,” said Wong. According to the figures compiled from Department of Statistics Malaysia and IHS Markit, the total export of Malaysian timber products to Germany from January to July 2020 was valued at €31.6 million, a 26.3% dip compared to the same period last year, he added.

Thomas Goebel, Secretary General of the European Timber Trade Federation and GTTF Chief Executive Officer, presented a topic on “Market Development in the Timber Trade 2020” where he briefly explained about the timber trade progress in Germany and the EU in general amidst the coronavirus situation. 

He said the German timber trade was picking up steadily from June onwards, with increased percentage of turnover in products mainly sawn timber, decking and components such as interior doors. 

“There was a sharp decline in the sales of panel products, but the demand for garden products looks promising following the boom in DIY market here and some parts of Europe,” said Goebel.

Goebel said there was a big difference when it comes to road to timber trade recovery between northern and southern countries in the EU.

“The Netherlands, Germany, Denmark, Sweden and Finland have strongly progressed so far mainly because the construction sector in the respective countries were allowed to resume business as usual during the lockdown months in March, April and May. Italy, Spain, Greece, Belgium and Austria were experiencing otherwise. These countries had between three to five weeks of complete stop order in the construction sector, thus making it more difficult for them to recover,” he added.   

In his paper, “Update on Sustainable Forest Management and Timber Certification in Malaysia”, Yong said Malaysia has a total of 18.273 million ha or 55.3% of land area under forest cover as of December 2018. As of 30 September 2020, the total certified forest under the Malaysian Timber Certification Scheme (MTCS) is 5,244,641.49 ha, consisting of 22 Forest Management Units (FMUs) and seven Forest Plantation Management Units (FPMUs). A total of 382 Malaysian companies were issued with the Programme for the Endorsement of Forest Certification (PEFC) Chain of Custody Certificate as of 30 September 2020. 

With regard to PEFC/MTCS-certified timber products export, Yong said the cumulative total export as of 31 August 2020 was 2.3 million m3, with Malaysia supplying to 70 destinations. “A total of 54% of the certified timber product in 2019 was exported to the EU, with 6.07% to the German market. The main certified products exported to the Deutschland were sawn timber, builders’ carpentry and joinery (BCJ) and mouldings,” he said.

In his welcoming remarks earlier, Yong pointed out the rising awareness among European industry players on Malaysia’s sustainable forest management efforts and recognition of the PEFC-endorsed MTCS implemented by MTCC. 

“With the increasing awareness on the need to ensure sustainability, certification has been accepted as a market -linked tool to maintain and improve market access for our timber products. We at MTCC are happy to see the increased awareness in the EU markets of our efforts towards sustainable forest management and for their recognition of the MTCS,” he said.

The MTCS is recognised by public and private procurement policies and green building systems worldwide. The first city in Germany which recognised the scheme was the Free and Hanseatic City of Hamburg.

The webinar was concluded after a Q&A session between participants and the three speakers.

A total of 82 participants comprising the PEFC/MTCS Chain of Custody certificate holders, timber traders and representatives of various timber associations from Malaysia and Germany joined the 90-minute webinar.