Datuk Dr. Abdul Rahim Nik

Mr. K. Vikram Rastogi, Editor-in-Chief, Architecture and Interiors International Panorama (AIIP), discussed a range of topics with Datuk Dr. Abdul Rahim Nik, Chief Executive Officer of the Malaysian Timber Council (MTC), which has its headquarters in Kuala Lumpur. Dr. Abdul Rahim provided much valuable insight into Malaysia’s timber and furniture industry which would be beneficial for the knowledge of India’s wood and furniture importers and other industry players. In the context of furniture, MTC has been extending its support to the staging of international fairs in Malaysia such as EFE, which is organized by EFE Expo Sdn Bhd, a fully-owned subsidiary of the Malaysian Furniture Council (MFC).

Major Timber Products Exported: Wooden furniture is the leading export item from Malaysia and the most popular are dining sets followed by bedroom furniture and living room or sofa sets. The other major timber products exported include plywood, sawn timber, MDF and Builders’ Carpentry and Joinery such as ready-made doors and solid flooring.

Enhancing Furniture Designs: Most of the designs currently are generic but there has been a trend for some years now by Malaysian furniture manufacturers towards generating original designs and product branding. The products manufactured now are robust, compact in nature and provide comfort in limited spaces. The Malaysian Timber Industry Board through its Malaysian MOBILI Furniture Design Competitiion (MOBILI) aims to hone the talents of local furniture designers so that they can produce designs which are acceptable by the more discerning affluent furniture buyers, both in the local and overseas markets. MTC is promoting the same objective by partnering the organizer of the Malaysian International Furniture Fair (MIFF) in promoting furniture design development through the annual MIFF Furniture Design Competition.

Export Furniture Exhibition 2016: The Malaysian Furniture Council (MFC) has been organizing the Export Furniture Exhibition (EFE) every year for Malaysian exhibitors to display their best and latest products. In this 12th annual event (one of the biggest furniture exhibitions in South-East Asia), 257 exhibitors from Malaysia and the region converged in the Kuala Lumpur Convention Centre (KLCC) with their best products. The majority of the Malaysian exhibitors were participating for the first time. More than 9,000 visitors including a large number of quality buyers from 135 countries attended this exhibition. MTC has been supporting EFE to boost furniture export from Malaysia. Besides participating at the fair, MTC also sponsored the participation of 15 Malaysian furniture companies at its China Export Pavilion.

Main Export Markets: The top ten export markets for Malaysian timber and timber products are, as mentioned, Japan, USA and India followed by Singapore, Australia, Republic of Korea, Taiwan, China, the UK and Thailand. Malaysia exported wood and furniture worth RM22.14 billion (US$ 5.8 billion) in 2015. Besides it headquarters in Kuala Lumpur, MTC also has offices in London, Dubai and Guangzhou which undertake market promotion in their respective regions of operations. In line with Malaysia’s National Timber Industry Policy, the export target for Malaysian timber and timber products including furniture is RM53 billion by 2020. MTC in collaboration with the relevant government agencies and the various timber trade associations has implemented many activities towards achieving this objective including maintaining export quality and providing goods at competitive prices.

Export Practices: Prices are quoted in US$, normally based on C&F port of importing country for full containers. Sometimes products are exported as Completely-Knocked-Down (CKD) items to save cost on ocean freight.

Regional Trade Pacts: Malaysia is a signatory to the ASEAN Trade in Goods Agreement (ATIGA). The establishment of the ASEAN Economic Community (AEC) in 2015 is a major milestone in the regional economic integration agenda in ASEAN, offering opportunities with a huge market of US$2.6 trillion and a population of over 622 million. Under ATIGA, there would be a free flow of trade between the members of the AEC with the eventual removal of trade tariffs. Meanwhile, the Trans-Pacific Partnership Agreement (TPPA) is overall beneficial to Malaysian exporters when lower tariffs and trade barriers are implemented under the agreement.
Certification: Malaysia has been committed to sustainable forestry for close to two decades now. A voluntary national timber certification scheme called the Malaysian Timber Certification Scheme (MTCS) was established in 1998 by the Malaysian Timber Certification Council to provide independent assessments of forest management practices to ensure the sustainable management of Malaysia’s Permanent Reserved Forests as well as to meet market demand for sustainably produced timber products including furniture. The MTCS was the first tropical timber certification scheme in South-East Asia to be endorsed by the Programme for the Endorsement of Forest Certification Schemes (PEFC) in 2009 and re-endorsed in July 2014.

Datuk Dr. Abdul Rahim Nik stated that the opening of a regional office in India would help in providing needed information on timber, furniture, prices and quality of Malaysian products to Indian importers. This would help to boost the trade of timber and furniture between Malaysian and India in a sizeable manner. A delegation consisting of MTC personnel and representatives from the Malaysian timber and furniture trade will be mounting a marketing mission to India in late August 2016 to further enhance trade between the two countries. India is poised to be one of the best trading partners for timber and furniture with Malaysia given its expanding middle class, increasing per capita income, rapid urbanization and growth of the real estate sector.

Trade with India: India is one of the biggest consumer markets for Malaysian timber products. It is ranked third after Japan and USA, and ahead of China which is ranked eighth. Flats for nuclear families have limited space and, therefore, ready-packed or DIY furniture items for bedrooms, dining rooms and for home offices are in demand. Malaysian companies can provide all these items at competitive prices. Some Indian companies have imported materials from Malaysia. MTC is in the process of setting up an office in India to promote and popularise Malaysian timber and furniture among Indian consumers and households. Some Malaysian companies are also keen to invest in India for manufacturing and marketing of their products. As such, joint-ventures with Indian furniture companies are also being considered by some Malaysian exporters. Malaysia and India have established the Malaysia-India Comprehensive Economic Cooperation Agreement (MICECA) on 24 September 2010. MICECA, which came into force on 1 July 2011, is expected to further boost trade and investments between the two countries. Under MICECA, both countries will progressively reduce or eliminate tariffs on industrial and agricultural products. Currently, India’s Customs Duty Tariffs under MICECA are 4% for sawntimber, 18.85% for all other timber and timber products and 18.85-23.85% for wooden furniture products and components.