Required Report - public distribution

**Date:** 7/2/2004

**GAIN Report Number:** MY4032

MY4032

**Malaysia**

**Solid Wood Products**

**Annual**

**2004**

**Approved by:**

![](media/image1.wmf)Joani Dong

U.S. Embassy, Kuala Lumpur

**Prepared by:**

Raymond Hoh

**Report Highlights:**

Malaysian imports of U.S. temperate hardwood lumber dropped 25%
reflecting purchase drawdowns following a sharp 58% surge in purchase in
2002. There are potential opportunities for U.S. hardwood in the
furniture, interiors and flooring sector.

The Malaysian timber industry performed very well in 2003. Log output
rose 3.5% than a year ago while lumber output was down marginally.
Overall export earnings from timber products rose 7% with the furniture
sector chalking up an impressive 12% growth.

The 2004 outlook is optimistic with an expected further increase in
overseas demand for logs and timber products (including furniture), not
only from East Asia, but also from India.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Annual Report

Kuala Lumpur \[MY1\]

\[MY\]

Table of Contents

[**Executive Summary 3**](#executive-summary)

[Production 6](#production)

[Market Section 8](#market-section)

[Trade Section 18](#trade-section)

[Tropical Hardwood Logs PS&D Tables
26](#tropical-hardwood-logs-psd-tables)

[Tropical Hardwood Logs Export Trade Table
27](#tropical-hardwood-logs-export-trade-table)

[Tropical Hardwood Logs Import Trade Table
28](#tropical-hardwood-logs-import-trade-table)

[Tropical Hardwood Lumber PS&D Table
29](#tropical-hardwood-lumber-psd-table)

[Tropical Hardwood Lumber Export Trade Table
30](#tropical-hardwood-lumber-export-trade-table)

[Tropical Hardwood Lumber Import Trade Table
31](#tropical-hardwood-lumber-import-trade-table)

[Temperate Harwood Lumber PS&D Table
32](#temperate-harwood-lumber-psd-table)

[Temperate Hardwood Lumber Import Trade Table
33](#temperate-hardwood-lumber-import-trade-table)

[Hardwood Veneer PS&D Table 34](#hardwood-veneer-psd-table)

[Hardwood Veneer Export Trade Table
35](#hardwood-veneer-export-trade-table)

[Hardwood Plywood PS&D Table 36](#hardwood-plywood-psd-table)

[Hardwood Plywood Export Trade Table
37](#hardwood-plywood-export-trade-table)

[Hardwood Plywood Import Trade Table
38](#hardwood-plywood-import-trade-table)

# Executive Summary

Malaysian imports of temperate hardwood lumber declined by 31 percent in
2003 reflecting purchase draw downs following a big surge in purchase in
2002. In tandem, imports from the U.S. showed a 25 percent drop compared
to a 58 percent increase in 2002. However, U.S. exports accounted for 62
percent of Malaysia's total temperate hardwood import market in 2003. In
value terms, exports of U.S. logs and lumber to Malaysia recorded a 2.5%
and 3.6% increase respectively. Imports of softwood lumber also declined
by 16 percent in 2003 reflecting a sharp drop in overseas demand for
softwood furniture. However, imports from the US rose 7.3 percent. New
Zealand and Finland remained the top two sources of temperate softwood
lumber to Malaysia.

The Malaysian timber industry performed very well in 2003. Overall
export earnings from timber products rose 6.9% to US\$4.3 billion in
2003 from a year ago. In terms of volume, exports of hardwood logs
increased by 7 percent while exports of lumber rose about one percent. A
23% drop in exports of veneer reflecting lower overseas demand,
especially from Hong Kong and South Korea more than offset the 4 percent
increase in plywood exports. The furniture sector fared better, chalking
up an impressive 12% growth in export earnings.

Malaysia\'s total round-wood production rose 3.5% to 21.4 million cubic
meters (cum) in 2003 while lumber output was down by marginally to 4.6
million cum. Malaysia's plywood production was rose by 8.4 percent to
4.4 million cum. Veneer production recorded a small drop during the
year.

The outlook for log production in 2004 is more optimistic with an
expected further increase in overseas demand for log and timber
products. Higher overseas demand is expected not only from East Asia but
also from India. The furniture industry is hopeful of an increase in
demand as shown in another successful International Furniture Fair held
in Kuala Lumpur in early March 2004. Considering the growing
competition, American wood product suppliers must be price competitive
and move aggressively into the Malaysian market in order to increase
market share. There are potential opportunities for U.S. hardwood in the
furniture, interiors and flooring sector.

Export earnings from the timber (including furniture) sector rose to
RM16.3 billion (US\$4.3 billion) in 2003. The timber product sector
remained as the third commodity export earner after palm oil/palm based
products and petroleum products (see table below). With the rapid
development of down stream activities, the combined earnings from wood
panel and furniture exports have far surpassed those from logs and
lumber.

Malaysia\'s Export Earnings by Major Commodities

(RM billion)

  ------------------------- ---------------- --------------- -------------
                            2001             2002            2003

  Total Exports of which,   334.3            354.4           382.3

  Palm Oil/Palm Based       15.1             20.8            27.7
  Products                                                   

  Petroleum Products        18.7             18.3            23.9

  Timber Products 1/        14.3             15.3            16.3

  Rubber                    1.9              2.5             3.7
  ------------------------- ---------------- --------------- -------------

Malaysia: Export of Major Timber Products, January-December 2002-2003

(FOB Value in RM million)

+-----------+------+------+------+------+------+------+------+------+
| PRODUCTS  | Pe   |      | S    |      | Sar  |      | T    |      |
|           | nins |      | abah |      | awak |      | otal |      |
|           | ular |      |      |      |      |      |      |      |
|           |      |      |      |      |      |      |      |      |
|           | Mala |      |      |      |      |      |      |      |
|           | ysia |      |      |      |      |      |      |      |
+-----------+------+------+------+------+------+------+------+------+
|           | 2002 | 2003 | 2002 | 2003 | 2002 | 2003 | 2002 | 2003 |
+-----------+------+------+------+------+------+------+------+------+
| Logs      | na   | na   | 171  | 312  | 1641 | 1689 | 1812 | 2001 |
+-----------+------+------+------+------+------+------+------+------+
| Lumber    | 992  | 1051 | 445  | 470  | 758  | 784  | 2194 | 2306 |
+-----------+------+------+------+------+------+------+------+------+
| Plywood   | 237  | 193  | 1139 | 1172 | 2445 | 2699 | 3821 | 4064 |
+-----------+------+------+------+------+------+------+------+------+
| Veneer    | 12   | 14   | 141  | 132  | 281  | 212  | 434  | 358  |
+-----------+------+------+------+------+------+------+------+------+
| Molding   | 381  | 359  | 200  | 166  | 72   | 69   | 654  | 594  |
+-----------+------+------+------+------+------+------+------+------+
| Dressed   | 176  | 199  | 87   | 64   | na   | na   | 262  | 263  |
| Timber    |      |      |      |      |      |      |      |      |
+-----------+------+------+------+------+------+------+------+------+
| Woodchips | na   | na   | na   | na   | 20   | 18   | 20   | 18   |
+-----------+------+------+------+------+------+------+------+------+
| Chipboard | 70   | 86   | 6    | 11   | 40   | 5    | 116  | 102  |
+-----------+------+------+------+------+------+------+------+------+
| M.D.F     | 741  | 848  | na   | na   | 126  | 131  | 867  | 979  |
| ibreboard |      |      |      |      |      |      |      |      |
+-----------+------+------+------+------+------+------+------+------+
| Wooden    | 92   | 101  | 2    | 3    | na   | na   | 94   | 104  |
| Frame     |      |      |      |      |      |      |      |      |
+-----------+------+------+------+------+------+------+------+------+
| Building  | 611  | 677  | 5    | 7    | 130  | 120  | 746  | 804  |
| Joinery   |      |      |      |      |      |      |      |      |
+-----------+------+------+------+------+------+------+------+------+
| Wooden    | 4107 | 4545 | 44   | 109  | 23   | 16   | 4174 | 4670 |
| Furniture |      |      |      |      |      |      |      |      |
+-----------+------+------+------+------+------+------+------+------+
| Rattan    | 68   | 53   | na   | na   | na   | na   | 68   | 53   |
| Furniture |      |      |      |      |      |      |      |      |
+-----------+------+------+------+------+------+------+------+------+
| Grand     | 7487 | 8126 | 2240 | 2445 | 5536 | 5745 | 1    | 1    |
| Total:    |      |      |      |      |      |      | 5262 | 6316 |
+-----------+------+------+------+------+------+------+------+------+

Source: Monthly timber bulletin of Malaysian Timber Industry Board

Note: Exchange rate pegged at US\$1.00 = RM3.80 since Sept. 1998

Key Economic Indicators for Malaysia

(Value in US\$ million unless otherwise specified)

  ------------- ------------------------------- ----------- ----------- -----------
                                                2002        2003        2004(f)

  Income,                                                               
  Production,                                                           
  Employment:                                                           

                Population (millions)           24.5        25.1        25.6

                GDP in 1987 Prices              57,713      60,339      63,628

                Percent Growth                  4.1%        4.5%        5.5-6.0%

                GDP at Current Prices           88,315      94,542      100,666

                Percent Growth                  8.7%        7.1%        6.5%

                Per Capita GDP (Curr. US\$)     3,601       3,774       3,935

                Official Unemployment Rate      3.5%        3.5%        3.4%

                                                                        

  Money and                                                             
  Prices:                                                               

                Inflation (CPI)                 1.8%        1.2%        1.5%

                Average Commercial Rate         4.4%        5.7%        \-

                                                                        

  Balance of                                                            
  Payments:                                                             

                Merchandise Exports (FOB)       94,132      104,974     116,658

                Merchandise Imports (FOB)       79,763      83,605      96,526

                Exchange Rate (avg., per US\$)  3.80        3.80        3.80

                                                                        
  ------------- ------------------------------- ----------- ----------- -----------

Sources: Bank Negara Annual Report 2003/04, Ministry of Finance Economic
Report 2003/04

and US Embassy Estimates.

Note: Exchange rate pegged at US\$1.00 = RM3.80 since Sept. 1998

# Production

-The Forest Resource Base

Natural Forest

The total area of natural forest in Malaysia at the end of 2003 was
estimated to be 17.8 million hectares or 54% of the total land area. The
proportion of forested land is higher in Sabah and Sarawak than in
Peninsular Malaysia. Approximately, 5.8 million hectares (MH) are
located in Peninsular Malaysia, 8.0 MH in Sarawak and 4.0 MH in Sabah.

Of the total natural forest, Malaysia has a total of 15.0 million
hectares of forested land designated as the Permanent Forest Estate
(PFE) which is under sustainable management. Approximately 10.5 million
hectares of the Permanent Forest Estate are production forest with the
remaining 4.5 million hectares being protected, non-commercial forest.

Plantation Forests

Total planted forests in the country amounted to about 189,000 hectares
by the end of 2003. Some of the harvested area during 2003 were not
replanted. The State of Sabah leads in forest plantation with an area of
92,000 hectares. The three companies namely, Sabah Forest Industries,
Sabah Softwoods Sdn.Bhd, and Safoda accounted for 90 percent of the
planted area.

Sarawak has planted about 24,000 hectares with fast growing exotics and
indigenous tree species. The Sarawak State Government set a target to
establish about 1.4 million hectares of planted forest in the next 20
years. Investment incentives were given in the form of pioneer status,
investment tax allowance, agriculture allowance, low annual land rental
and reduced annual fee for planted forest license.

Planted forest in Peninsular Malaysia recorded a slight increase to
74,080 ha in 2003. In order to promote the rubberwood-based furniture
industry, the GOM is undertaking the planting of 25,000 ha of rubber per
year for 15 years. For this purpose, the GOM has established a Rubber
Forest Plantation Fund with an initial allocation of US\$52.6 million in
the form of soft loans.

Sustainability of the Forest Resources

The Malaysian timber certification scheme, operated by the Malaysian
Timber Certification Council (MTCC), continued to make some progress in
2003. To date, seven states have been awarded the Certificates for
Forest Management and 38 timber companies have been given permits to use
the MTCC logo to provide assurance of sustainable and legal source of
forest products to buyers of Malaysian timber products. During 2003,
Denmark accepted the MTCC scheme as one of its accepted certification
schemes in its Environmental Guidelines for Purchasing Tropical Timber.
However, the Norwegian government imposed restriction on imports of
tropical timber for public projtecs unless certified by the Forest
Stewardship Council (FSC).

Timber Products

\--Production Trends

Malaysia\'s total round-wood production rose 3.5 percent to 21.4 million
cubic meters (cum) in 2003, mainly due to an increase in opening of
forestland in Peninsula Malaysia as well as in East Malaysia for
logging. As more logs were exported or processed into plywood/veneer,
the production of lumber for the whole of Malaysia was down marginally
to 4.6 million cum in 2003. Malaysia's plywood production rose 8.4
percent to 4.4 million cum. Veneer production recorded a small drop
during the year.

The outlook for log production in 2004 is more optimistic with an
expected further increase in overseas demand for log and timber
products. Output in the state of Sarawak will show a big increase while
the output in the Peninsula and Sabah should also grow albeit at a
slower rate. The expected increase in log output will have a strong
positive impact on output of lumber, veneer and plywood in 2004.

# Market Section

\--Construction Sector

Industry Outlook

The Malaysian construction sector grew 1.9 percent in 2003 compared to
2.3 percent in 2002. While the demand for residential property
contributed to the growth, government expenditure in infrastructure
projects slowed due to the completion of several privatized projects.
Construction activity in the non-residential sector consolidated further
due to the oversupply of commercial buildings and retail space.

In 2003, the GOM continued to provide stimulus packages to increase
house ownership. The Government provided income tax relief on interest
payments for new buyers of completed houses and first-time owners of
houses ranging from RM100,000 to RM180,000; stamp duty waiver on the
Sale and Purchase agreements, loan and transfer documents for houses
costing RM180,000 and below; subsidy of RM600 for new buyers of houses
costing below RM100,000; and exemption from real property gains tax.

Apart from undertaking major on-going projects, namely the Kajang Ring
Road, the Butterworth Outer Ring Road, the new Pantai Expressway and the
development of the new Administrative Center at Putrajaya, the
Government has initiated the SMART Intelligent Tunnel for Flood
Mitigation in Kuala Lumpur and the new Kuala Lumpur Convention Center.

Market Impediments

Given the fact that Malaysia is one of the largest producers of hardwood
in the world, U.S. wood products are unlikely to penetrate into the
Malaysian construction sector. Moreover, Malaysia is in close proximity
to timber-rich countries like Indonesia and Papua New Guinea.

Market Opportunities

Unless the timber resources in Malaysia, Indonesia and P.N.Guinea are
exhausted, market opportunities for U.S. wood products in the
construction sector are extremely limited.

\--Furniture/Interiors Sector

Industry Outlook

The Malaysian furniture/interiors sector showed strong resilience in
2003, with a significant increase in overseas demand for Malaysian-made
furniture. A total office area of 92,800 sq meters was completed in and
around Kuala Lumpur during Jan-Sept 2003, a sharp drop following a big
increase in the previous year. However, the retail sector recorded a 60
percent growth with the completion of several big shopping malls. The
condominium and apartment sector showed a similar increase with 19,060
units completed, a 66 percent growth from the past year. In addition,
111 new hotels/resorts with an additional 7,838 rooms were completed
throughout Malaysia in 2003. The GOM is on track in building a new
Administrative Center at Putrajaya. Additional new facilities include a
brand new boutique hotel and a grand convention center. Next to
Putrajaya is Cyberjaya, the new 'intelligent' city which is the base for
international multimedia companies. Recently completed projects in
Cyberjaya include the Multimedia University, NTT R&D Center, Shell
Company, DHL center and up-scale homes. In addition, in May 2003, the
Government launched the BioValley of Malaysia, a brand-new city to
support the development of the biotechnological industry. Although the
project has a slow start, the Government has expressed renewed interest
in its development in recent months. All these developments still
provide opportunities for the expansion of the furniture/interiors
sector and the increased use of US hardwood.

**Supply of Office Space, Retail Space, Condominiums and**

**Apartments in Klang Valley¹**

+----------+----------+----------+----------+----------+-------------+
|          | Office   |          | Retail   |          | C           |
|          | Space    |          | Space    |          | ondominiums |
|          |          |          |          |          | &           |
|          |          |          |          |          | Apartments  |
+----------+----------+----------+----------+----------+-------------+
|          | Square   | O        | Square   | O        | Units       |
|          |          | ccupancy |          | ccupancy |             |
|          | meters   |          | meters   |          |             |
|          |          | rate (%) |          | rate (%) |             |
+----------+----------+----------+----------+----------+-------------+
| 1993     | 332,246  | 91.5     | 130,345  | 97.3     | 18,232      |
+----------+----------+----------+----------+----------+-------------+
| 1994     | 192,808  | 94.3     | 117,340  | 98.5     | 9,331       |
+----------+----------+----------+----------+----------+-------------+
| 1995     | 362,851  | 94.9     | 341,091  | 96.1     | 17,822      |
+----------+----------+----------+----------+----------+-------------+
| 1996     | 296,742  | 95.5     | 136,964  | 92.8     | 14,568      |
+----------+----------+----------+----------+----------+-------------+
| 1997     | 869,394  | 94.9     | 362,574  | 90.5     | 5,473       |
+----------+----------+----------+----------+----------+-------------+
| 1998     | 1        | 79.9     | 364,027  | 61.7     | 14,380      |
|          | ,158,776 |          |          |          |             |
+----------+----------+----------+----------+----------+-------------+
| 1999     | 265,645  | 76.2     | 89,787   | 76.6     | 9,547       |
+----------+----------+----------+----------+----------+-------------+
| 2000     | 1        | 76.9     | 218,562  | 78.5     | 5,466       |
|          | ,374,452 |          |          |          |             |
+----------+----------+----------+----------+----------+-------------+
| 2001     | 134,826  | 74.7     | 24,096   | 79.7     | 17,067      |
+----------+----------+----------+----------+----------+-------------+
| 2002 /1  | 200,195  | 75.5     | 141,644  | 83.0     | 20,465      |
+----------+----------+----------+----------+----------+-------------+
| 2003 /2  | 92,800   | 77.2     | 190,175  | 83.3     | 19,060      |
+----------+----------+----------+----------+----------+-------------+
| ¹ Refers |          |          |          |          |             |
| to Kuala |          |          |          |          |             |
| Lumpur & |          |          |          |          |             |
| Selangor |          |          |          |          |             |
| D. E.    |          |          |          |          |             |
+----------+----------+----------+----------+----------+-------------+
| 1/       |          |          |          |          |             |
| Revised  |          |          |          |          |             |
+----------+----------+----------+----------+----------+-------------+
| 2/       |          |          |          |          |             |
| J        |          |          |          |          |             |
| an-Sept. |          |          |          |          |             |
+----------+----------+----------+----------+----------+-------------+
| Source:  |          |          |          |          |             |
| NAPIC,   |          |          |          |          |             |
| V        |          |          |          |          |             |
| aluation |          |          |          |          |             |
| and      |          |          |          |          |             |
| Property |          |          |          |          |             |
| Services |          |          |          |          |             |
| De       |          |          |          |          |             |
| partment |          |          |          |          |             |
+----------+----------+----------+----------+----------+-------------+

Malaysia is within the top 10 exporters of furniture in the world. The
demand for Malaysian furniture exports increase significantly, with
export earnings rising 10 percent to RM4.7 billion (US\$1.23 billion) in
2003. The United States remains the largest single market for Malaysian
wooden furniture (34%), with export earnings increasing by 5 percent.
With the exceptions of the Japan and South Korea, exports to most other
countries recorded increases.

The industry is more optimistic for 2004 and expects overseas demand to
further expand during the latter half of the year. The tenth annual
Malaysian International Furniture Fair (MIFF) 2004, held in Kuala Lumpur
in early March 2004, showcased the best of Malaysian manufactured
furniture. With about 400 exhibitors occupying 60,000 sq. meters of
exhibition space, MIFF 2004 attracted more than 16,194 visitors, of
which 6,593 were international buyers. RM2.05 billion (US\$539 million)
in sales, an increase of 4 per cent from the preceding year, was
generated at the show.

Malaysia: Exports of Wooden Furniture

(in million RM)

  ------------------------------ ------------- ------------- -------------
                                 **2001**      **2002**      **2003**

  U.S.A.                         1213          1508          1577

  Japan                          654           556           497

  United Kingdom                 420           448           495

  Australia                      235           274           357

  Singapore                      243           225           319

  Canada                         118           174           186

  U.A. Emirates                  113           130           186

  Saudi Arabia                   73            99            126

  South Korea                    66            85            74

  Netherlands                    48            37            57

  Others                         596           638           796

  \--Total                       3779          4174          4670
  ------------------------------ ------------- ------------- -------------

Market Impediments

Malaysian imports of temperate hardwood lumber declined by 31 percent in
2003 reflecting purchase draw downs following a big surge in purchase in
2002. In tandem, imports from the U.S. showed a 25 percent drop compared
to a 58 percent increase in 2002. U.S. exports accounted for 62 percent
of Malaysia's total temperate hardwood import market in 2003. Germany,
Canada and Denmark were the top competitors. New emerging competing
countries include Ukraine, the Netherlands, United Kingdom and Romania.
In value terms, exports of U.S. logs and lumber to Malaysia recorded a
2.5% and 3.6% increase respectively.

Imports of softwood lumber also declined by 16 percent in 2003
reflecting a sharp drop in overseas demand for softwood furniture.
Imports from the U.S. rose 7.3 percent. New Zealand and Finland remained
the top two sources of temperate softwood lumber to Malaysia.

Lack of knowledge of U.S. hardwood and softwood is still a constraint,
especially the technical application of popular U.S. hardwoods in making
furniture and flooring in Malaysia. Lack of linkage between Malaysian
importers/users and US wood suppliers is often cited as another
constraint. There is also still a need to reach a wider range of
potential users such as housing, shopping, restaurants and hotel/resort
developers.

Market Opportunities

Much of the success of the Malaysian furniture industry is directly
attributable to coupling cheaper native woods, such as rubberwood and
particleboards, with high-value veneers from the U.S. Strong increases
in market share of U.S. temperate hardwood veneer and hardwood logs in
past years confirms this trend. As Malaysia moves into the top ten
furniture exporters in the world, the U.S. wood industry, if properly
positioned, would largely benefit from the development.

The American Hardwood Export Council (AHEC) has done a commendable job
of increasing the awareness of U.S. hardwoods in Malaysia. In 2003/04,
its main activities were participating in trade shows, conducting a
technical seminar, holding two regional conferences involving
speaker/panelist from Malaysia and co-organizing a Malaysian
interior/architect mission to the U.S. in July 2003 to meet with their
peers in leading architectural and design firms and to see applications
of U.S. hardwoods in large scale convention and hospitality settings.

Post recommends the following:

1\. Conduct technical seminars in Malaysia on a yearly basis in order to
increase the level of technical knowledge and application of U.S.
hardwoods in making furniture and flooring. A Pan Asian Architectural
Seminar is scheduled for Kuala Lumpur in 2005.

2\. That American Forest and Paper Association bring another team of
present/potential U.S. wood users to the States for an exposure/buying
mission. This might address the constraint of the lack of a large,
existing distribution network in Malaysia.

3\. Support AHEC's proposed 'Quality Samples Program (K Lumpur
Convention Center)' as a follow-up activity to the architect mission to
the US in 2003. The new state‑of‑the-art convention center will be the
premier and most prestigious convention center in the country. The
project provides a tremendous opportunity for AHEC to influence the
specifiers to use U.S. hardwood in its interior. The interior designers
are determined to use the very best materials. If we succeed, the Center
could very well become a showcase for American hardwoods not only to
Malaysia but also to the region and beyond.

4\. U.S. wood suppliers should team up with AHEC to participate at trade
shows in order to increase their visibility in the local market and to
make direct contact with local furniture manufacturers.

Without concerted marketing efforts, U.S. market share will be slowly
eroded by aggressive competitors, i.e. Australia, Germany and Canada for
hardwood; and New Zealand, Russia, Canada and the Scandinavian countries
for softwood.

The following events will provide opportunities for U.S. trade
associations and firms to learn more about, and to be involved in the
Malaysian furniture/interior decoration market

Dat: March 1-5, 2005

Event: Malaysian International Furniture Fair (MIFF) 2005

Venue: Putra World Trade Center, Kuala Lumpur

MIFF is developing into a premium international furniture fair in the
region and had received full accreditation since November 2000 from the
Union des Foires Internationales (UFI), the world\'s leading authority
on trade fairs. This export‑oriented exhibition, showcasing the latest
designs for the world‑wide market, represents the largest collection of
Malaysian furniture for the global market. It accounts for about 40
percent of Malaysia\'s total annual furniture exports. AHEC (S.E.Asia)
was the only foreign timber association to have the privilege of
participating in MIFF 2004. (For details, please e‑mail
info@miff.com.my)

Date: March 2 - 6, 2005

Event: Muar Furniture Association Show, 2005

Venue: MINES Exhibition Center, Kuala Lumpur

A smaller show, organized by the Muar Furniture Association, is offered
around the same time as the MIFF. AHEC has participated in this show in
the past. The show\'s website is www.muarfurniture.net and trade show
organizers can be contacted at <muarfurn@tm.net.my>

Malaysia: Imports of Temperate Hardwood Lumber

(cubic meter)

  ----------------------- ---------------- --------------- ---------------
                          2001             2002            2003

  U.S.A.                  18,078           28,636          21,388

  Germany                 3,816            8,832           4,834

  Canada                  3,854            3,743           2,579

  Denmark                 3,478            3,914           1,283

  Austria                 8,791            2,613           834

  South Africa            0                0               788

  Australia               345              999             763

  Belgium                 0                589             438

  China                   1,203            506             388

  Ukraine                 0                0               387

  Netherlands             0                0               300

  United Kingdom          0                0               233

  Romania                 0                0               222

  Sweden                  613              149             0

  \--Total                40,178           49,981          34,437
  ----------------------- ---------------- --------------- ---------------

Malaysia: Imports of Temperate Softwood Lumber

(Cubic Meter)

  ---------------------- ---------------- ---------------- ---------------
                         2001             2002             2003

  U.S.A.                 3,803            2,900            3,111

  New Zealand            3,758            4,369            3,580

  Finland                548              4,280            3,524

  Canada                 2,361            1,608            1,422

  Germany                2,799            352              1,339

  Denmark                1,210            0                228

  Brazil                 2,306            496              110

  Sweden                 101              1,412            96

  Italy                  0                403              52

  South Africa           878              305              39

  Japan                  0                0                0

  Australia              502              0                0

  Austria                561              0                0

  Chile                  0                0                0

  France                 0                0                0

  China                  388              0                0

  TOTAL                  19,215           16,125           13,501
  ---------------------- ---------------- ---------------- ---------------

\--Materials Handling Sector

Industry Outlook

Materials handling is very much tied to the manufacturing sector. In
2003, manufacturing output recorded a 4.5 percent growth. The beverage
and electronic sectors recorded the strongest growth.

Manufacturing Production: Selected Indicators (1993=100)

  ----------------------------- ---------- ---------- ---------- ----------
                                Index                 Change in  
                                                      %          

                                2002       2003       2002       2003

  Radio and television sets     157.4      134.4      -7.8       -14.6

  Electronics                   305.2      315.3      13.4       15.1

  Manufacture of office,        176.1      156.6      -22.5      -11.1
  computing and accounting                                       
  machinery                                                      

  Manufacture of refrigerating, 161.8      180.6      22.2       11.6
  exhaust, ventilating and                                       
  air-conditioning machinery                                     

  Textiles and wearing apparel  111.4      109.0      -6.2       -2.2

  Wood and wood products        98.6       99.5       -6.0       0.9

  Food Products                 168.2      183.0      8.7        8.8

  Beverages                     121.9      147.3      -11.9      20.8

  Tobacco Products              148.0      153.8      -10.0      3.9
  ----------------------------- ---------- ---------- ---------- ----------

Market Impediments

Malaysia has an ample supply of low-priced timber for making packaging,
pallets, and crates. Furthermore, there are plenty of saw tailings for
this sector.

Market Opportunities

For the near term, market opportunities for US products are nil.

\--Export Sector

Competitor Activities

The Malaysian Timber Council (MTC) together with the Malaysian Timber
Industry Board (MTIB) in Peninsular Malaysia, the Sarawak Timber
Industry Development Corporation (STIDC), and the Timber Association of
Sabah are involved in efforts to promote the use of Malaysian timber
products.

Malaysian Timber Council now has three regional marketing offices
located in London, Shanghai and Dubai.

The following table provides a list of fairs and exhibitions that MTC
planned to participate in 2004.

  ------------------- -----------------------------------------------------
  **International     
  Trade Fairs 2004**  

  Date                Event

  January 17-20       DOMOTEX, Hannover, Germany

  January 19-25       International Furniture Fair, Cologne, Germany

  January 28-30       SURFACES 2004, Las Vegas, U.S.A.

  April 14-17         2004 Wood Flooring Expo, North Carolina, U.S.A.

  May 11-15           PROJECT LEBANON 2004, Beirut, Lebanon

  June 2-4            Carrefour International du Bois, Nantes, France

  June 20-23          Designbuild Australia 2004, Melbourne, Australia

  August 4-7          INTERBUILD AFRICA 2004, Johannesburg, South Africa

  September 5-7       SPOGA Fair, Cologne, Germany

  September 27-30     5^th^ China International Floor Coverings & Carpet
                      Fair, Beijing, China

  October 13-17       INTER-FURN India, Mumbai, India

  October 21-23       NAWLA, Chicago, U.S.A.

  **Trade Missions    
  2004**              

  September/October   Joint MTC/MTCC Promotional Mission to Australia

  October/November    Marketing mission to Poland, Hungary and Czech
                      Republic

  **Promotion Booths  
  2004**              

  **MTC HQ**          

  January 19-22       International Builders' Show 2004, Las Vegas, U.S.A.

  February 5-7        Lumber and Building Material Expo 2004, Boston U.S.A.

  April 28-May 2      Architect 2004, Bangkok, Thailand

  **MTC London        
  Branch**            

  February 17-21      Bautec, Berlin, Germany

  March 4             In Touch with, Timber -- Exhibition of Timber
                      Building Products, London, United Kingdom

  March 17-21         SAIEDUE Fair, Bolongna, Italy

  March 31-April 3    FENSTERBAU, Nuremburg, Germany

  April 20-24         IBF, Brno, Czech Republic

  May 11-14           Meble/Drema Fair, Poznan, Poland

  August 25-28        Elmia Timber, Sweden

  September 14-17     BATIMAT Fair, St. Peterburg, Russia

  October/November    Dutch Timber Day, Utrecht, The Netherlands

  **MTC Dubai         
  Branch**            

  January 6-10        International Exhibition of Forestry & Wood Industry,
                      Tehran, Iran

  January 19-23       REBUILD IRAQ 2004, Mishref, Kuwait

  May 9-14            BUILDEX 2004, Damascus, Syria

  June 17-21          Inter Build 2004, Cairo, Egypt

  September 19-23     PROJECT QATAR, Doha, Qatar

  September 22-26     INDEX 2004, Dubai, U.A.E.

  October 10-14       SAUDI BUILD 2004, Riyadh, Saudi Arabia

  **MTC Shanghai      
  Branch**            

  February 6-11       KyungHyang, Seoul, South Korea

  February 17-20      Woodmac China, Shanghai, China

  July 10-13          2004 China International Building & Decoration Fair,
                      Guangzhou, China

  **Marketing Seminar 
  2004**              

  July 15             Annual Marketing Seminar
  ------------------- -----------------------------------------------------

For details or updates, please visit website:
[www.mtc.com.my/fairs2004.htm]{.underline}

Trade Policy

On February 2004, the Environmental Protection Agency (EIA) labeled
Malaysia as a 'laundering' center for illegal logs and pointed that a
cargo of Indonesian Ramin lumber was transshipped through the Free Trade
Zone of Pasir Gudang in southern Malaysia. However Malaysia's current
legislations covering the FTZ area do not allow the confiscation and
disposal of cargos that are not in the prohibitive list of the FTZ area.
The GOM is still trying to find an amiable solution to the problem.

# Trade Section

Malaysia: Exports of Tropical Hardwood Logs, 2002

(1,000 cubic meters)

  ---------------- ------------- ------------- ------------- -------------
                   Pen. M\'sia   Sabah         Sarawak       Total

                                                             

  Japan            0             144           1,446         1,590

  China            1             127           976           1,103

  India            0             13            982           995

  Taiwan           0             1             648           650

  Vietnam          0             96            92            187

  Hong Kong        0             10            176           186

  South Korea      0             18            140           158

  Indonesia        0             127           0             127

  Thailand         0             9             29            38

  Philippines      0             30            6             36

  Pakistan         0             0             18            18

  Bangladesh       0             0             2             2

  \--TOTAL         1             574           4,517         5,092
  ---------------- ------------- ------------- ------------- -------------

Malaysia: Exports of Tropical Hardwood Logs, 2003

(1,000 cubic meters)

+---------------------+-------------+-----------+----------+-----------+
|                     | #######     | ###       | ######   | ###       |
|                     | Pen. M\'sia | ### Sabah |  Sarawak | ### Total |
+---------------------+-------------+-----------+----------+-----------+
|                     |             |           |          |           |
+---------------------+-------------+-----------+----------+-----------+
| India               | 0           | 88        | 1,276    | 1,364     |
+---------------------+-------------+-----------+----------+-----------+
| Japan               | 0           | 187       | 1,148    | 1,334     |
+---------------------+-------------+-----------+----------+-----------+
| China               | 0           | 158       | 1,159    | 1,317     |
+---------------------+-------------+-----------+----------+-----------+
| Taiwan              | 0           | 27        | 673      | 700       |
+---------------------+-------------+-----------+----------+-----------+
| Vietnam             | 0           | 130       | 202      | 332       |
+---------------------+-------------+-----------+----------+-----------+
| South Korea         | 0           | 22        | 117      | 139       |
+---------------------+-------------+-----------+----------+-----------+
| Hong Kong           | 0           | 7         | 97       | 104       |
+---------------------+-------------+-----------+----------+-----------+
| Thailand            | 0           | 18        | 41       | 59        |
+---------------------+-------------+-----------+----------+-----------+
| Indonesia           | 0           | 49        | 0        | 49        |
+---------------------+-------------+-----------+----------+-----------+
| Philippines         | 0           | 27        | 6        | 33        |
+---------------------+-------------+-----------+----------+-----------+
| Pakistan            | 0           | 8         | 15       | 23        |
+---------------------+-------------+-----------+----------+-----------+
| Bangladesh          | 0           | 4         | 3        | 7         |
+---------------------+-------------+-----------+----------+-----------+
| Saudi Arabia        | 0           | 0         | 3        | 3         |
+---------------------+-------------+-----------+----------+-----------+
| South Africa        | 0           | 2         | 0        | 2         |
+---------------------+-------------+-----------+----------+-----------+
| Kuwait              | 0           | 1         | 0        | 1         |
+---------------------+-------------+-----------+----------+-----------+
| Singapore           | 0           | 0         | 0        | 0         |
+---------------------+-------------+-----------+----------+-----------+
| Switzerland         | 0           | 0         | 0        | 0         |
+---------------------+-------------+-----------+----------+-----------+
| \--TOTAL            | 0           | 727       | 4,742    | 5,468     |
+---------------------+-------------+-----------+----------+-----------+

Malaysia: Exports of Tropical Hardwood Lumber, 2002

(1,000 cubic meters)

  ---------------- ------------- ------------- ------------- -------------
                   Pen. M'sia    Sabah         Sarawak       Malaysia

                                                             

  U.S.A.           3             3             2             7

  Thailand         239           100           269           607

  Taiwan           15            32            140           188

  Netherlands      137           40            5             181

  Philippines      2             24            148           174

  Singapore        104           3             48            155

  China            42            10            85            138

  Hong Kong        86            26            24            136

  Japan            38            45            31            115

  South Korea      12            26            57            94

  Yemen Rep. of    12            1             56            69

  Other\'s         246           103           123           472

  \--TOTAL         935           413           987           2,336
  ---------------- ------------- ------------- ------------- -------------

Malaysia: Exports of Tropical Hardwood Lumber, 2003

(1,000 cubic meters)

+----------------------+------------+----------+----------+----------+
|                      | Pen.       | Sabah    | #        | ######   |
|                      | M\'sia     |          | ######## | ## Total |
|                      |            |          |  Sarawak |          |
+----------------------+------------+----------+----------+----------+
| U.S.A.               | 3          | 3        | 1        | 7        |
+----------------------+------------+----------+----------+----------+
| Thailand             | 270        | 88       | 316      | 674      |
+----------------------+------------+----------+----------+----------+
| Taiwan               | 18         | 40       | 150      | 207      |
+----------------------+------------+----------+----------+----------+
| Netherlands          | 144        | 44       | 4        | 193      |
+----------------------+------------+----------+----------+----------+
| China                | 60         | 9        | 84       | 153      |
+----------------------+------------+----------+----------+----------+
| Singapore            | 101        | 4        | 47       | 152      |
+----------------------+------------+----------+----------+----------+
| Philippines          | 0          | 11       | 106      | 117      |
+----------------------+------------+----------+----------+----------+
| Japan                | 36         | 40       | 21       | 97       |
+----------------------+------------+----------+----------+----------+
| Hong Kong            | 42         | 33       | 17       | 92       |
+----------------------+------------+----------+----------+----------+
| South Korea          | 10         | 20       | 52       | 82       |
+----------------------+------------+----------+----------+----------+
| Yemen Rep. of        | 11         | 1        | 67       | 79       |
+----------------------+------------+----------+----------+----------+
| Others               | 237        | 132      | 134      | 503      |
+----------------------+------------+----------+----------+----------+
| \--TOTAL             | 932        | 423      | 999      | 2,354    |
+----------------------+------------+----------+----------+----------+

Malaysia: Exports of Tropical Hardwood Veneer, 2002

(1,000 cubic meters)

  ---------------- ------------- ------------- ------------- -------------
  Destination      Pen. M'sia    Sabah         Sarawak       Total

  U.S.A.           0             1             0             1

  South Korea      0             88            80            168

  Hong Kong        0             2             155           158

  Taiwan           0             22            74            97

  Philippines      0             6             59            65

  Japan            0             17            38            56

  China            1             1             46            48

  Thailand         0             1             2             3

  Australia        1             1             0             2

  Singapore        0             0             0             0

  Syria            0             0             0             0

  Other\'s         2             1             1             4

  \--TOTAL         5             140           457           601
  ---------------- ------------- ------------- ------------- -------------

Malaysia: Exports of Tropical Hardwood Veneer, 2003

(1,000 cubic meters)

  ------------------- ------------- ------------ ------------ -------------
                      Pen. M\'sia   Sabah        Sarawak      Total

  U.S.A.              0             1            0            1

  South Korea         0             69           58           126

  Taiwan              1             21           56           78

  Philippines         0             12           65           77

  Hong Kong           0             4            57           61

  Japan               0             20           32           52

  China               1             6            39           46

  Thailand            0             0            5            5

  Denmark             0             0            5            5

  Saudi Arabia        0             0            3            3

  Australia           1             1            0            3

  Other\'s            3             1            1            5

  \--TOTAL            6             135          321          462
  ------------------- ------------- ------------ ------------ -------------

Malaysia: Exports of Tropical Hardwood Plywood, 2002

(1,000 cubic meters)

  ---------------- ------------- ------------- ------------- -------------
                   Pen. M'sia    Sabah         Sarawak       Total

  U.S.A.           7             225           202           435

  Japan            11            350           1,355         1,717

  South Korea      4             183           256           443

  Taiwan           5             89            102           197

  Singapore        56            15            47            118

  Hong Kong        2             18            96            116

  U.K.             47            5             52            103

  China            0             13            53            66

  Thailand         2             32            10            44

  U.A.E.           1             0             26            28

  Yemen Rep. of    0             0             16            16

  Saudi Arabia     1             0             3             4

  Other\'s         64            111           153           328

  \--TOTAL         200           1,043         2,371         3,614
  ---------------- ------------- ------------- ------------- -------------

Malaysia: Exports of Tropical Hardwood Plywood, 2003

(1,000 cubic meters)

  -------------------- ------------- ------------ ------------ ------------
                       Pen. M\'sia   Sabah        Sarawak      Total

  U.S.A.               4             209          181          394

  Japan                3             285          1,486        1,775

  South Korea          4             209          292          505

  Taiwan               4             96           136          237

  Hong Kong            2             24           99           125

  Egypt                0             57           34           91

  Singapore            38            17           29           85

  U.K.                 32            8            44           84

  Mexico               0             41           37           78

  China                0             1            69           71

  Thailand             6             35           26           67

  Others               60            39           161          260

  \--TOTAL             155           1,022        2,594        3,771
  -------------------- ------------- ------------ ------------ ------------

# Tropical Hardwood Logs PS&D Tables

  --------------- -------------- ---------- ---------- ---------- ---------- ----------
  **PSD Table**                                                              

  **Country**     **Malaysia**                                               

  **Commodity**   **Tropical                                      1000 CUBIC 
                  Hardwood                                        METERS     
                  Logs**                                                     

                  2003           Revised    2004       Estimate   2005       Forecast

                  USDA Official  Post       USDA       Post       USDA       Post
                  \[Old\]        Estimate   Official   Estimate   Official   Estimate
                                 \[New\]    \[Old\]    \[New\]    \[Old\]    \[New\]

  **Market Year                  01/2003               01/2004               01/2005
  Begin**                                                                    

  Production      22000          21400      21000      22500      0          22000

  Imports         100            63         100        100        0          100

  TOTAL SUPPLY    22100          21463      21100      22600      0          22100

  Exports         5500           5468       4100       5650       0          5700

  Domestic        16600          15995      17000      16950      0          16400
  Consumption                                                                

  TOTAL           22100          21463      21100      22600      0          22100
  DISTRIBUTION                                                               
  --------------- -------------- ---------- ---------- ---------- ---------- ----------

## Tropical Hardwood Logs Export Trade Table

  -------------------- ----------------- ------------------ ---------------
  **Export Trade                                            
  Matrix**                                                  

  **Country**          Malaysia                             

  **Commodity**        Tropical Hardwood                    
                       Logs                                 

  Time Period          Jan-Dec           Units:             1000 CUM

  Exports for:         2002                                 **2003**

  U.S.                                   U.S.                

  Others                                 Others             

  Japan                1590              India              1364

  China                1103              Japan              1334

  India                995               China              1317

  Taiwan               650               Taiwan             700

  Vietnam              187               Vietnam            332

  Hong Kong            186               South Korea        139

  South Korea          158               Hong Kong          104

  Indonesia            127               Thailand           59

  Thailand             38                Indonesia          49

  Philippines          36                Philippines        33

  Total for Others     5070                                 5431

  Others not Listed    22                                   37

  Grand Total          5092                                 5468
  -------------------- ----------------- ------------------ ---------------

## Tropical Hardwood Logs Import Trade Table

# 

  --------------------- -------------- ------------- -------------- ---------- ----------
  **Import Trade                                                               
  Matrix**                                                                     

  **Country**           Malaysia                                               

  **Commodity**         Tropical                                               
                        Hardwood Logs                                          

  Time Period           Jan-Dec        Units:                       1000 CUM   

  Imports for:          2002                                        **2003**   

  U.S.                                 U.S.                                    

  Others                               Others                                  

  Indonesia             249            Burma                        29         

  Burma                 37             Indonesia                    18         

  Philippines           30             Solomon                      10         
                                       Island                                  

  Slovenia              10             P. New Guinea                4          

  P. New Guinea         6              Philippines                  1          

  Solomon Island        6              Singapore                    1          

  Vietnam               5                                                      

  Singapore             3                                                      

  Gabon                 2                                                      

                                                                               

  Total for Others      348                                         63         

  Others not Listed                                                            

  Grand Total           348                                         63         
  --------------------- -------------- ------------- -------------- ---------- ----------

#  

# Tropical Hardwood Lumber PS&D Table

  --------------- -------------- ---------- ---------- ---------- ---------- ----------
  **PSD Table**                                                              

  **Country**     **Malaysia**                                               

  **Commodity**   **Tropical                                      1000 CUBIC 
                  Hardwood                                        METERS     
                  Lumber**                                                   

                  2003           Revised    2004       Estimate   2005       Forecast

                  USDA Official  Post       USDA       Post       USDA       Post
                  \[Old\]        Estimate   Official   Estimate   Official   Estimate
                                 \[New\]    \[Old\]    \[New\]    \[Old\]    \[New\]

  **Market Year                  01/2003               01/2004               01/2005
  Begin**                                                                    

  Production      4950           4568       5070       4900       0          5200

  Imports         500            549        600        600        0          700

  TOTAL SUPPLY    5450           5117       5670       5500       0          5900

  Exports         2800           2356       2900       2800       0          3000

  Domestic        2650           2761       2770       2700       0          2900
  Consumption                                                                

  TOTAL           5450           5117       5670       5500       0          5900
  DISTRIBUTION                                                               
  --------------- -------------- ---------- ---------- ---------- ---------- ----------

## Tropical Hardwood Lumber Export Trade Table

  ---------------------- --------------- ------------------ --------------
  **Export Trade                                            
  Matrix**                                                  

  **Country**            Malaysia                           

  **Commodity**          Tropical                           
                         Hardwood Lumber                    

  Time Period            Jan-Dec         Units:             1000 CUM

  Exports for:           2002                               **2003**

  U.S.                   7               U.S.               7

  Others                                 Others             

  Thailand               607             Thailand           674

  Taiwan                 188             Taiwan             207

  Netherlands            181             Netherlands        193

  Philippines            174             China              153

  Singapore              155             Singapore          152

  China                  138             Philippines        117

  Hong Kong              136             Japan              97

  Japan                  115             Hong Kong          92

  South Korea            94              South Korea        82

  Yemen Rep. Of          69              Yemen Rep. Of      79

  Total for Others       1857                               1846

  Others not Listed      472                                503

  Grand Total            2336                               2356
  ---------------------- --------------- ------------------ --------------

##  Tropical Hardwood Lumber Import Trade Table

  ---------------------- ----------------- --------------- ---------------
  **Import Trade                                           
  Matrix**                                                 

  **Country**            Malaysia                          

  **Commodity**          Tropical Hardwood                 
                         Lumber                            

  Time Period            Jan-Dec           Units:          1000 CUM

  Imports for:           2002                              **2003**

  U.S.                                     U.S.             

  Others                                   Others          

  Indonesia              397               Indonesia       1910

  Thailand               24                Thailand        25

  Burma                  4                 Burma           4

  Philippines            2                 Philippines     4

                                                            

                                                            

                                                            

                                                            

                                                            

                                                            

  Total for Others       427                               1943

  Others not Listed                                         

  Grand Total            427                               1943
  ---------------------- ----------------- --------------- ---------------

# Temperate Harwood Lumber PS&D Table

  --------------- -------------- ---------- ---------- ---------- ---------- ----------
  **PSD Table**                                                              

  **Country**     **Malaysia**                                               

  **Commodity**   **Temperate                                     1000 CUBIC 
                  Hardwood                                        METERS     
                  Lumber**                                                   

                  2003           Revised    2004       Estimate   2005       Forecast

                  USDA Official  Post       USDA       Post       USDA       Post
                  \[Old\]        Estimate   Official   Estimate   Official   Estimate
                                 \[New\]    \[Old\]    \[New\]    \[Old\]    \[New\]

  **Market Year                  01/2003               01/2004               01/2005
  Begin**                                                                    

  Production      0              0          0          0          0          0

  Imports         60             34         70         50         0          60

  TOTAL SUPPLY    60             34         70         50         0          60

  Exports         0              0          0          0          0          0

  Domestic        60             34         70         50         0          60
  Consumption                                                                

  TOTAL           60             34         70         50         0          60
  DISTRIBUTION                                                               
  --------------- -------------- ---------- ---------- ---------- ---------- ----------

## Temperate Hardwood Lumber Import Trade Table

  ---------------------- ------------------ ---------------- -------------
  **Import Trade                                             
  Matrix**                                                   

  **Country**            Malaysia                            

  **Commodity**          Temperate Hardwood                  
                         Lumber                              

  Time Period            Jan-Dec            Units:           CUM

  Imports for:           2002                                **2003**

  U.S.                   28636              U.S.             21388

  Others                                    Others           

  Germany                8832               Germany          4834

  Denmark                3914               Canada           2579

  Canada                 3743               Denmark          1283

  Austria                2613               Austria          834

  Australia              999                South Africa     788

  Belgium                589                Australia        763

  China                  506                Belgium          438

  Sweden                 149                China            388

                                            Ukraine          387

                                            Netherlands      300

  Total for Others       21345                               12594

  Others not Listed                                          455

  Grand Total            49981                               34437
  ---------------------- ------------------ ---------------- -------------

# Hardwood Veneer PS&D Table

  --------------- -------------- ---------- ---------- ---------- ---------- ----------
  **PSD Table**                                                              

  **Country**     **Malaysia**                                               

  **Commodity**   **Hardwood                                      1000 CUBIC 
                  Veneer**                                        METERS     

                  2003           Revised    2004       Estimate   2005       Forecast

                  USDA Official  Post       USDA       Post       USDA       Post
                  \[Old\]        Estimate   Official   Estimate   Official   Estimate
                                 \[New\]    \[Old\]    \[New\]    \[Old\]    \[New\]

  **Market Year                  01/2003               01/2004               01/2005
  Begin**                                                                    

  Production      730            610        760        605        0          560

  Imports         0              0          0          0          0          0

  TOTAL SUPPLY    730            610        760        605        0          560

  Exports         580            462        600        450        0          400

  Domestic        150            148        160        155        0          160
  Consumption                                                                

  TOTAL           730            610        760        605        0          560
  DISTRIBUTION                                                               
  --------------- -------------- ---------- ---------- ---------- ---------- ----------

##  Hardwood Veneer Export Trade Table

  ------------------------ --------------- ---------------- --------------
  **Export Trade Matrix**                                   

  **Country**              Malaysia                         

  **Commodity**            Hardwood Veneer                  

  Time Period              Jan-Dec         Units:           1000 CUM

  Exports for:             2002                             **2003**

  U.S.                     1               U.S.             1

  Others                                   Others           

  South Korea              168             South Korea      126

  Hong Kong                158             Taiwan           78

  Taiwan                   97              Philippines      77

  Philippines              65              Hong Kong        61

  Japan                    56              Japan            52

  China                    48              China            46

  Thailand                 3               Thailand         5

  Australia                2               Denmark          5

                                           Saudi Arabia     3

                                           Australia        3

  Total for Others         597                              456

  Others not Listed        4                                5

  Grand Total              602                              462
  ------------------------ --------------- ---------------- --------------

# Hardwood Plywood PS&D Table 

## 

  --------------- -------------- ---------- ---------- ---------- ---------- ----------
  **PSD Table**                                                              

  **Country**     **Malaysia**                                               

  **Commodity**   **Hardwood                                      1000 CUBIC 
                  Plywood**                                       METERS     

                  2003           Revised    2004       Estimate   2005       Forecast

                  USDA Official  Post       USDA       Post       USDA       Post
                  \[Old\]        Estimate   Official   Estimate   Official   Estimate
                                 \[New\]    \[Old\]    \[New\]    \[Old\]    \[New\]

  **Market Year                  01/2003               01/2004               01/2005
  Begin**                                                                    

  Production      4450           4404       4500       4600       0          4700

  Imports         3              1          3          2          0          2

  TOTAL SUPPLY    4453           4405       4503       4602       0          4702

  Exports         3650           3771       3500       3850       0          3900

  Domestic        803            634        1003       752        0          802
  Consumption                                                                

  TOTAL           4453           4405       4503       4602       0          4702
  DISTRIBUTION                                                               
  --------------- -------------- ---------- ---------- ---------- ---------- ----------

##  Hardwood Plywood Export Trade Table

  --------------------- ----------------- ------------------ -------------
  **Export Trade                                             
  Matrix**                                                   

  **Country**           Malaysia                             

  **Commodity**         Hardwood Plywood                     

  Time Period           Jan-Dec           Units:             1000 CUM

  Exports for:          2002                                 **2003**

  U.S.                  435               U.S.               394

  Others                                  Others             

  Japan                 1717              Japan              1775

  South Korea           443               South Korea        505

  Taiwan                197               Taiwan             237

  Singapore             118               Hong Kong          125

  Hong Kong             116               Egypt              91

  United Kingdom        103               Singapore          85

  China                 66                United Kingdom     84

  Thailand              44                Mexico             78

  U.A. Emirates         28                China              71

  Yemen Rep. Of         16                Thailand           67

  Total for Others      2848                                 3118

  Others not Listed     331                                  260

  Grand Total           3614                                 3772
  --------------------- ----------------- ------------------ -------------

## Hardwood Plywood Import Trade Table

  ---------------------- ------------------ --------------- ---------------
  **Import Trade                                            
  Matrix**                                                  

  **Country**            Malaysia                           

  **Commodity**          Hardwood Plywood                   

  Time Period            Jan-Dec            Units:          1000 CUM

  Imports for:           2002                               **2003**

  U.S.                                      U.S.             

  Others                                    Others          

  Indonesia              2                  Indonesia       1

                                                             

                                                             

                                                             

                                                             

                                                             

                                                             

                                                             

                                                             

                                                             

  Total for Others       2                                  1

  Others not Listed                                          

  Grand Total            2                                  1
  ---------------------- ------------------ --------------- ---------------

+-----------------------------------+----------+----------+----------+
| **STRATEGIC INDICATOR TABLE:      |          |          |          |
| FOREST AREA (million              |          |          |          |
| hectares/million cum)**           |          |          |          |
+-----------------------------------+----------+----------+----------+
|                                   |          |          |          |
+-----------------------------------+----------+----------+----------+
|                                   |          |          |          |
+-----------------------------------+----------+----------+----------+
| **Country:Malaysia**              | ** **    | ** **    | ** **    |
+-----------------------------------+----------+----------+----------+
| **Report Year:**                  | **2003** | **2004** | **2005** |
+-----------------------------------+----------+----------+----------+
| Total Land Area                   | [3       | [3       | [3       |
|                                   | 2.9]{.un | 2.9]{.un | 2.9]{.un |
|                                   | derline} | derline} | derline} |
+-----------------------------------+----------+----------+----------+
| Total Forest Area                 | 17.8     | 17.6     | 17.5     |
+-----------------------------------+----------+----------+----------+
| \--of which, Commercial           | 13.4     | 13.3     | 13.2     |
+-----------------------------------+----------+----------+----------+
| \-\-\--of commercial, tropical    | 13.4     | 13.3     | 13.2     |
| hardwood                          |          |          |          |
+-----------------------------------+----------+----------+----------+
| \-\-\--of commercial, temperate   | na       | na       | na       |
| hardwood                          |          |          |          |
+-----------------------------------+----------+----------+----------+
| \-\-\--of commercial, softwood    | na       | na       | na       |
+-----------------------------------+----------+----------+----------+
| \--of forest area, non-commercial | 4.3      | 4.3      | 4.3      |
+-----------------------------------+----------+----------+----------+
| Forest Type                       |          |          |          |
+-----------------------------------+----------+----------+----------+
| \--Of which, virgin               | 3.3      | 3.1      | 3.0      |
+-----------------------------------+----------+----------+----------+
| \--Of which, plantation           | 0.2      | 0.2      | 0.3      |
+-----------------------------------+----------+----------+----------+
| \--Of which, other commercial     | 14.4     | 14.3     | 14.0     |
| (regrowth)                        |          |          |          |
+-----------------------------------+----------+----------+----------+
| Forest Ownership                  |          |          |          |
+-----------------------------------+----------+----------+----------+
| \--Nationally owned and no        | 4.8      | 4.7      | 4.6      |
| commercial access                 |          |          |          |
+-----------------------------------+----------+----------+----------+
| \--Nationally owned, commercial   | 13.0     | 12.9     | 12.9     |
| logging permitted                 |          |          |          |
+-----------------------------------+----------+----------+----------+
| \--Other publicly owned land, no  | 4.8      | 4.7      | 4.6      |
| commercial access                 |          |          |          |
+-----------------------------------+----------+----------+----------+
| \--Other publicly owned, logging  | 13.0     | 12.9     | 12.9     |
| permitted                         |          |          |          |
+-----------------------------------+----------+----------+----------+
| \--privately owned commercial     | 0.0      | 0.0      | 0.0      |
| forest                            |          |          |          |
+-----------------------------------+----------+----------+----------+
| Total Volume of Standing Timber   | na       | na       | na       |
+-----------------------------------+----------+----------+----------+
| \--Of which, Commercial Timber    | na       | na       | na       |
+-----------------------------------+----------+----------+----------+
| Annual Timber Removal 1/          | For      |          |          |
|                                   | 2003,    |          |          |
|                                   | 4.41     |          |          |
|                                   | million  |          |          |
|                                   | cum (For |          |          |
|                                   | Pe       |          |          |
|                                   | ninsular |          |          |
|                                   | Malaysia |          |          |
|                                   | only)    |          |          |
+-----------------------------------+----------+----------+----------+
| Annual Timber Growth Rate         | 2.0-2.5c |          |          |
|                                   | um/ha/yr |          |          |
|                                   | (For     |          |          |
|                                   | Pen.Msia |          |          |
|                                   | only)    |          |          |
|                                   |          |          |          |
|                                   |          |          |          |
|                                   |          |          |          |
|                                   |          |          |          |
+-----------------------------------+----------+----------+----------+
| Annual Allowable Cut              | 42,870   |          |          |
|                                   | ha (For  |          |          |
|                                   | Pen Msia |          |          |
|                                   | only)    |          |          |
|                                   |          |          |          |
|                                   |          |          |          |
|                                   |          |          |          |
|                                   |          |          |          |
+-----------------------------------+----------+----------+----------+
|                                   |          |          |          |
+-----------------------------------+----------+----------+----------+
|                                   |          |          |          |
+-----------------------------------+----------+----------+----------+
| 1/ If Removals exceeds growth     |          |          |          |
| rate, analyze impact in text.     |          |          |          |
+-----------------------------------+----------+----------+----------+

  ----------------------------------------- ------------ ---------- ----------
  **STRATEGIC INDICATOR TABLE: CONSTRUCTION                         
  MARKET**                                                          

                                                                    

  **Country:Malaysia**                      ** **        ** **      ** **

  **Report Year:**                          **2003**     **2004**   **2005**

  Total Housing Starts (number of units)    na           na         na

  \--Of which, wood frame                   na           na         na

  \--Of which, steel, masonry, other        na           na         na
  materials                                                         

  \--Of total starts, residential           na           na         na

  \-\-\--Of residential, single family      na           na         na

  \-\-\--Of residential, multi-family       na           na         na

  \--Of total starts, commercial            na           na         na

  Total Value of Commercial Construction    na           na         na
  Market (\$US million)                                             

  Total Value of Repair and Remodeling      na           na         na
  Market (\$US million)                                             

  Are tariffs on softwood from the United   Equal                    
  States higher, equal or lower than                                
  softwood imported from other countries?                           
  1/                                                                

  Are tariffs on plywood from the United    Equal                    
  States higher, equal or lower than                                
  plywood imported from other countries? 1/                         

  Are non-tariff barriers on softwood from  Equal                    
  the United States higher, equal or lower                          
  than softwood imported from other                                 
  countries? 1/                                                     

  Are non-tariff barriers on plywood from   Equal                    
  the United States higher, equal or lower                          
  than plywood imported from other                                  
  countries? 1/                                                     

  Are there market development programs for None                     
  construction, softwood or plywood imports                         
  funded by foreign governments?                                    

  If yes, identify the following:                                    

  \--Country(ies)                                                    

  \--Form(s) of competition: Export                                  
  subsidy, trade show, trade servicing,                             
  permanent market representative (number),                         
  permanent office (location), or other. 2/                         

  \--Estimated annual market expansion                               
  outlay (\$US million) by country                                  

  Is the acceptability of U.S. style timber Medium                   
  frame construction (i.e., per building                            
  codes, mortgage availabity, etc.) high,                           
  medium or low? 3/                                                 

  Are consumer preferences for solid wood   Medium                   
  materials vis-a-vis non-wood materials in                         
  construction high, medium or low? 3/                              

  From Post\'s experience, is the           High                     
  willingness of U.S. suppliers to deliver                          
  product per importers\' specifications                            
  low, medium or high? 3/                                           

  If price quotes for construction and      Malaysian                
  structural wood products are available,   Institute of            
  identify the leading source(s)            Architects              
                                            and                     
                                            Malaysian               
                                            Institute of            
                                            Interior                
                                            Designers               

                                                                    

                                                                    

  1/ If other than equal, explain in report                         
  text.                                                             

  2/ If \"other\", then explain in report                           
  text.                                                             

  3/ If low or medium, explain in report                            
  text.                                                             
  ----------------------------------------- ------------ ---------- ----------

  -------------------------------------------- ----------- ---------- ----------
  **STRATEGIC INDICATORS TABLE: FURNITURE &                           
  INTERIORS MARKET**                                                  

                                                                      

                                                                      

  **Country: Malaysia**                        ** **       ** **      ** **

  **Report Year:**                             **2003**    **2004**   **2005**

  Total Housing Starts (number of units)       na          na         na

  Total Number of Households)                  na          na         na

  Furniture Production (\$US million)          na          na         na

  Interiors Market Size (\$US million)         na          na         na

  Total Furniture Imports (\$US million)       120.0       120.0      135.0

  Total Furniture Exports (\$US million)       1230        1800       1800

  Are tariffs on hardwood from the United                              
  States higher, equal or lower than hardwood                         
  imported from other countries? 1/                                   

  Are non-tariff barriers on hardwood from the                         
  United States higher, equal or lower than                           
  hardwood imported from other countries? 1/                          

  Are there market development programs for                            
  furniture or interiors market expansion                             
  funded by foreign governments?                                      

  If yes, identify the following:                                      

  \--Country(ies) 2/                                                   

  \--Form(s) of competition: Export subsidy,                           
  trade show, trade servicing, permanent                              
  market representative (number), permanent                           
  office (location), or other. 3/                                     

  \--Estimated annual market expansion outlay                          
  (\$US million) by country                                           

  From Post\'s experience, is the willingness                          
  of U.S. suppliers to deliver product per                            
  importers\' specifications low, medium or                           
  high? 4/                                                            

  If price quotes for furniture and interiors  Malaysian              
  products are available, identify the leading Furniture              
  source(s)                                    Industry               
                                               Council                

                                                                      

                                                                      

  1/ If other than equal, explain in text.                            

  2/ If more than one country, report each                            
  country individually.                                               

  3/ If \"other\", explain form of subsidy in                         
  text.                                                               

  4/ If low or medium, explain in test.                               
  -------------------------------------------- ----------- ---------- ----------

  ----------------------------------------- ----------- ---------- ----------
  **STRATEGIC INDICATOR TABLE: WOOD                                
  PRODUCTS SUBSIDIES**                                             

                                                                   

                                                                   

  **Country:Malaysia**                      ** **       ** **      ** **

  **Report Year:**                          **2003**    **2004**   **2005**

  Total Solid Wood Export Subsidy Outlay    None        None       None
  (\$US million)                                                   

  Is there a ban on the export of logs,     Yes- Logs               
  lumber, or veneer? If yes, which?         from Pen.              
                                            M\'sia and             
                                            quota for              
                                            East M\'sia            

  Are there export taxes (yes/no)? 1/       Yes                     

  If yes, for which products? (Identify     see table               
  export tax level in tariff table)         on tariff              

  Source(s) of Export Subsidy Information   Not                     
                                            relevant               

  Total Wood Production Subsidy Outlay      Not                     
  (\$US million)                            relevant               

  Are there any programs favoring the       Yes                     
  development of commercial forestry?                              

  If yes, Post best estimate of scope       See text                
  (thousands of hectares)                                          

  If yes, Post\'s best estimate of          na                      
  financial outlay (\$US million)                                  

  Source(s) of Production Subsidy           Not                     
  Information                               relevant               

  Does the country support export expansion Yes                     
  activities similar to the Cooperator                             
  Program?                                                         

  \--Which country markets are targeted?    China,                  
                                            Japan,                 
                                            Middle East            
                                            & India                

  \--Which products are targeted?           Mainly                  
                                            lumber,                
                                            furniture              
                                            and                    
                                            moldings               

  Are there significant wood products       None                    
  export expansion activities at the                               
  provincial or regional level?                                    

  \--If yes, identify key players                                   

  \--If yes, identify key market segments                           

  \--If yes, identify key country markets                           

  \--If yes, identify key products                                  

  \--Post\'s estimate for combined outlay                           
  (\$US million)                                                   

  Source(s) of Provincial/Regional Support                          
  Information                                                      

  Are there other wood products export      Yes                     
  expansion activities? If yes, describe in                        
  report.                                                          
  ----------------------------------------- ----------- ---------- ----------

  ---------------- --------------------- ------------- --------------- ---------------- ---------- ------------
  **STRATEGIC                                                                                      
  INDICATOR TABLE:                                                                                 
  FOREST PRODUCT                                                                                   
  TARIFFS AND                                                                                      
  TAXES                                                                                            
  (percent)**                                                                                      

                                                                                                   

                                                                                                   

                                         **Tariff**    **Tariff**      **Other**                    

  **Country:**     **Product**           **Current**   **Following**   **Import**       **Total    **Export**
                                                                                        Cost**     

  **Report Year:** **Description 1/**    **Year**      **Year**        **Taxes/Fees**   **of       **Tax**
                                                                                        Import**   

  4401             Fuel Wood             20%           20%                                         0

  4403             Wood in rough         0             0                                           0 to 15%

  4404             Poles/piles           10 to 20%     10 to 20%                                   0

  4405             Wood wood/flour       5 to 20%      5 to 20%                                    0

  4406             Rail Sleepers         5%            5%                                          0

  4407             Lumber, sawn          0             0                                           0
                   lengthwise                                                                      

  4408             Veneer/plywood        0 to 20%      0 to 20%                                    0

  4409             Lumber, molded and    20%           20%                                         0
                   rounded                                                                         

  4410             Particle Board        20%           20%                                         0

  4411             Fibreboard of wood    20%           20%                                         0

  4412             Veneered Panel        25 to 40%     25 to 40%                                   0

  4413             Densified wood        20%           20%                                         0

  4414             Wooden frames         20%           20%                                         0

  4415             Packing cases/pallets 20%           20%                                         0

  4416             Cask/Barrel/Vat/Tub   20%           20%                                         0

  4417             Tool/handles          20%           20%                                         0

  4418             Builders\' joinery    20%           20%                                         0

  4419             Wooden tableware      20%           20%                                         0

  4420             Jewellery cases       0 to 20%      0 to 20%                                    0

  4421             Other wooden articles 0 to 20%      0 to 20%                                    0

  4422             na                                                                               

  4423             na                                                                               

  4424             na                                                                               

  4425             na                                                                               

  Pre-fabricated                                                                                    
  Houses, a                                                                                        
  subsection under                                                                                 
  chapter 96                                                                                       

  9406             Prefab building-      5 to 30%      25%                                         0
                   wood25%                                                                         

                                                                                                   

  1/ Insert                                                                                        
  additional lines                                                                                 
  for Commodity                                                                                    
  tariff                                                                                           
  identification                                                                                   
  should tariffs                                                                                   
  vary within                                                                                      

  the four-digit                                                                                   
  designation.                                                                                     
  ---------------- --------------------- ------------- --------------- ---------------- ---------- ------------

  ---------------------------------------------- ------------- ---------- ----------
  **STRATEGIC INDICATOR TABLE: MATERIAL HANDLING                          
  MARKET**                                                                

                                                                          

                                                                          

  **Country:Malaysia**                           ** **         ** **      ** **

  **Report Year:**                               **2003**      **2004**   **2005**

  Total Value of Industrial Output (\$US         18.8          20.7       22.0
  million)                                                                

  New Pallet Production (million units)          na            na         na

  Are consumer preferences for solid wood        High                      
  pallets and packaging materials vis-a-vis                               
  non-wood materials high, medium or low? 1/                              

  Are industry/trade preferences for             Low                       
  repaired/recycled pallets over new pallets                              
  low, medium or high? 1/                                                 

  From Post\'s experience, is the willingness of na            na         na
  U.S. suppliers to deliver product per                                   
  importers\' specifications low, medium or                               
  high? 1/                                                                

  Identify leading source(s) of price quotes:    Malaysian                
                                                 Packaging                
                                                 Association              

  Are there market development programs for the  None                      
  materials handling market expansion funded by                           
  foreign governments?                                                    

  If yes, identify the following:                                          

  \--Which Countries?                                                      

  \--Form(s) of competition: Export subsidy,                               
  trade show, trade servicing, permanent market                           
  representative (number), permanent office                               
  (location), or other. 2/                                                

  \--Estimated annual market expansion outlay                              
  (\$US million) by country                                               

                                                                          

                                                                          

  1/ If low or medium, explain in text of                                 
  report.                                                                 

  2/ If \"other\", explain in text of report.                             
  ---------------------------------------------- ------------- ---------- ----------