Wood-Based and Furniture
Malaysia is an important player in the international market for tropical wood and wood products, and is also the leading exporter of wooden furniture globally. For the past 20 years, Malaysia’s wood-based industry has become one of the major revenue contributors to the country’s economic growth, encompassing the production of sawn timber, veneer, panel products (plywood, particleboard, chipboard, and fibreboard), mouldings, and builder joinery and carpentry (BJC), as well as furniture and furniture components.
Foreign Investment RM13.7 mil (8.8%)
Domestic Investment RM141.3 mil (91.2%)
Foreign Investment RM41.2 mil (16.8%)
Domestic Investment RM203.4 mil (83.2%)
In order for the wood-based and furniture industry to improve its export ranking, the industry has to adopt new and state-of-the-art technologies to overcome production bottlenecks that would result in newer and sophisticated products and reduce dependency on unskilled foreign labour. This can be achieved by identifying and exploiting innovation gains through the promotion of knowledge intensive industries, technical breakthroughs and design and development initiatives.
MIDA encourages industry players to focus on creativity and innovation in their production processes, moving up the value chain from an original equipment manufacturer (OEM) to becoming an original design manufacturer (ODM) or own- brand manufacturer (OBM).
Malaysian manufacturers have started to raise capital expenditures for technological investments despite the associated high costs, enabling them to start venturing into automation and Industry 4.0.
The Government continues to encourage more local companies to produce high value-added products and leverage on automation as well as invest in the upskilling of their talents. Some of the available incentives for companies in this industry include:
Under the Promotion of Investments Act (PIA), 1986 the incentives offered are as follows:
Companies in this industry are also eligible for Reinvestment Incentives under the PIA 1986:
The Malaysian Timber Industry Board (MTIB) has set up the Wood Industrial Skill Development Centre (WISDEC) to produce more industry-ready talents that specialise in woodworking, wood crafting and furniture design. The training institution works closely with TVET institutions, government agencies or ministries and other training centres to carry out technical training and facilitate product development. It has also been mandated to coordinate the Malaysia Skills Competition (CPM).
Meanwhile, public higher learning institutions like the Universiti Malaysia Sabah offers a Wood Technology and Industry programme which covers the basic knowledge of wood, identification of commercial timbers, the technology and processing techniques, management and marketing. The programme focuses on the upstream and downstream processing industries to produce wood products such as paper, fibreboard, particleboard and plywood. Other than that, this programme will also focus on technology and methods to enhance the wood quality-related to wood drying and preservation.
The availability of these courses and platforms reflects the country’s commitment to expanding the talent supply and skills level of its workforce for the advancement of this industry.