KUCHING: Ta Ann Holdings Bhd has significantly increased the harvesting of logs from its industrial plantations to meet the shortfall of natural forest logs and replace imported veneer to support its plywood manufacturing activities.
The group raised its log production volume from planted forest by 63% to 50,319 cubic meters (cu m) last year from 30,917 cu m in 2020, according to group managing director and chief executive officer Datuk Wong Kuo Hea.
He said plantation logs contributed 20% to the group’s total log production volume of 248,638 cu m in 2021, up 5% from 2020. Last year, the group harvested 198,319 cu m of logs from natural forests, down 8,560 cu m or 4% from 2020’s production of 206,879 cu m.
“With well-planned timber resource management, our group managed to supplement the shortfall in log supply from natural forests with plantation logs.
“The increase in plantation logs not only supplemented the shortfall of natural logs but also replaced imported veneer, thus reducing our downstream manufacturing costs.
Ta Ann forest plantation
“Given all these contributing factors, we turned around the plywood division to a profit-making operation,” Wong added in the company’s 2021 annual report. Ta Ann has been importing veneer produced by the group’s operations in Tasmania.
Ta Ann is one of the pioneers in forest plantation project in Sarawak, cultivating fast-growing timber species, mainly acacia mangium. The group also plants other timber species such as kelampayan, sawi, benuang and engkabang.
The Sarawak government targets to establish one million ha of forest plantation by 2025 to provide a new source of timber for the downstream processing industries to relieve pressure on natural forests and also to increase the state’s forest cover to reduce greenhouse effect.
Ta Ann group has total planted forests covering 30,590ha, including 26,234ha under first rotation and 4,356ha under second rotation. Acacia mangium’s second rotation planting was carried out after harvesting of the first round planted trees. In 2021, the group replanted 669.7ha of acacia mangium in two licensed planted forests.
Wong said about 86% or 26,219ha of the group’s planted forests are matured (10 years and above) while another 7% or 2,174ha are immatured (four to nine years).
“Kelampayan planting in natural Forest Management Unit (FMU) areas achieved 216 ha with emphasis on quality planting and increasing stocking per ha.
“This is part of efforts to rehabilitate and enhance forest stocking after sustainable forest harvesting,” he added.
Ta Ann group has three Programme for the Endorsement of Forest Certification (PEFC)-certified FMUs in the Rejang region in central Sarawak, covering a total area of 346,021ha, which represents 92% of its total timber concession.
In 2021, the group exported 70,470 cu m of logs, which was a decline of 26% from 95,118 cu m recorded in 2020.
About 87% of the exported logs went to India and the remaining to Taiwan and Japan.
The group registered an increase in the average selling price of export logs with the recovery of the consumer market as compared to 2020.
On plywood operations, Wong said Ta Ann group is now producing 100% PEFC certified products which are a strong selling point particularly in the Japanese market.
“There was a surge in demand for plywood products in Japan even though we can see a shrinkage in plywood manufacturing due to reduced supply of raw material.
“In this instance, the average selling price for plywood products had become stronger,” he added.
In 2021, the group produced 80,908 cu m of plywood products, down 5% from 85,320 cu m in 2020 while sales volume fell by 12% to 86,529 cu m from 98,242 cu m year-on-year.
About 90% of the group’s certified plywood products were exported to Japan last year against 88% in 2020.
In Tasmania, Australia, Ta Ann is also producing plywood products to cater for the local market there.