Act on non-performing FMUs; go for ITPs

Published on: Sunday, June 27, 2021

By: Datuk John Lo

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MY heartiest congratulations to Sabah Foundation and Merica Group for their JV company Gerak Saga Sdn Bhd having been awarded 2 covetous certificates

[a] Malaysian Timber Certification Scheme Forest Management Certification (MTCS-FMC) and

[b] the Forest Stewardship Council (FSC) Forest Management/Chain of Custody Certification.

These 2 awards are important in many significant ways because all the logs down to all finished products will be acceptable in the world, meaning worldwide market access.

Now that Gerak Saga has pathed the way, I hope other Sabah ITP companies will be encouraged to seek same recognitions. For more information, please access to Headline news in Daily Express on 24 June 2021

Full-Fledged ITPs with Down-Stream Industrialization can Reduce/Eliminate Pressure on Natural Forest.

ITPs and natural forests are not mutually exclusive nor are they locked in a zero-sum game. They are important complementary parts in Sabah’s future. Successful ITPs plus downstream industrialization can, in fact, reduce or totally eliminate the need to cut down trees from our natural forest.

The ITPs will replace the Government’s revenue source from natural forest timber. This will also give a chance for the existing logged over forests to regenerate for perpetual preservation. We duty bound to keep natural forests for our children’s children!

According to TAS [Timber Association of Sabah], it takes only 400,000 ha planted ITPs to give Sabah a fully integrated viable ITP industry, from tree planting, several levels of down-stream from furniture right down to chemicals, 80,000 skilled jobs, RM11.5B in value for the economy and major investments.

Compare with Sabah having devoted 1.7 m ha in oil palm, we have minimal downstream and no jobs for Sabahans. ITPs are incomparably superior.

The present downstream players will need to convert to ITP downstream. Relying on natural forest logs will become a thing of the past like 1G or 2 G smartphone users. They can’t survive on natural logs any longer.

ITP logs will benefit the pragmatic present down-stream players if they can embrace reality and grab opportunities in ITP logs especially those produced by ITP plantation companies like Gerak Saga which have achieved worldwide recognition certifications.

The downstream products too will gain worldwide market access readily.

Sabahans Thrive Excellently in ITP Employment.

ITP owners have debunked the myth/excuse of oil palm plantations not to give employment for Sabahans. They have no more excuses.

All the ITP owners, 5 in number, have Sabahans in senior management and downline staff. Without exception, these Sabahans have been well trained and are doing well in ITP plantations. Tan Sri Majid Khan’s Jawala which is listed in Singapore, has Rahim Khan, a Sabahan as the CEO.

Gerak Saga is the prime example. Contributions from Sabahan management team and work force have made it possible for the company to win the 2 awards. Why Sabah should go for ITPs.

Simple.

[a] Sabah has serious competitive advantages like all year-round growth. ITPs in northern [Canada. USA] and southern [New Zealand] hemispheres take more than 30 years to mature. ITP trees in Sabah’s tropical environment take only about 10 to 15 years, depending on species.

[b] Logs from natural forest are mixed specie, often too many of them, and sizes vary a lot. These make uniformity in product, colour. quality impossible.

[c] ITP plantations are at least 4 to 5 times more productive than natural forests.

[d] ITP companies in Sabah, despite their small numbers, have been conducting research which will produce exciting prospects.

For examples, [i] engineered timbers can be used for construction up to 20 stories.

[ii] With technology, the common fast-growing eucalyptus which can grow quite easily in Sabah, can be transformed to match the long lasting and hardness qualities of Belian.

I am sure there will be plenty of other possibilities.

Hajiji’s economic pragmaticism will boost ITPs.

ITPs and downstream industrialization will flourish under Hajiji’s pragmatic approach in economic development for Sabah. Sabahans will benefit in many substantial and meaningful ways. All that is needed is for Sabah to formalise a positive, well balanced ITP policy for ITPs and related downstream industrialization to take off.

Towards this end, I understand MID Minister, Joachim, CCF Fred Kugan and TAS, with encouragement from Hajiji, have made considerable progress in the finalization of this policy.

Once this is in place, the ITP policy can send a clear signal to investors who will make a beeline to Sabah. Let me reiterate—-Investors seek out good policies, run away from bad policies.

At the same time, I hope the Government will expedite review on all dormant FMUs [only 5 FMUs are active] with the view of kicking them awake from their more than 20 years old slumber or face cancellation.

These FMU licence holders are not being fair to Sabah. If they have complied with the terms and conditions of their FMU licences, Sabah would have plenty of ITP logs by now, would have a booming downstream industry.

Sabah cannot afford or allow these non-performing FMU owners to continue to take us for a ride. They have deprived Sabahans for far too long. Cancel their licences, reallocate these FMUs to Sabahans under Sabahans First Policy.

They can seek out JV partners like Merica and other credible companies.