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Malaysian industry affected by Rubberwood shortages
2002.09.12


The woodworking sector has been affected by the recent crackdown on illegal foreign labourers by the Government. In the downstream sector the smaller mills are reportedly more affected with many claiming they do not have the means to meet the regulatory requirements regarding the hiring of foreign labour. As a result of the crackdown many mills, particularly in the Klang Valley, are operating at very low capacity. The larger mills, most of which focus on direct export are not reporting that the government moves have affected them. However they face onother problem, the problem of raw material supply.
In the furniture sector, where Rubberwood forms the main raw material, the whole industry is seriously affected as most of the Rubberwood sawmilling is carried out in the plantations by specialist contractors and most of them are now without their foreign workers.

For the past few years the workers in this industry were mainly by the foreigners, particularly from Indonesia. As a result of the new move by the Government to impose severe penalties on illegal foreign labour the Rubberwood sawmilling sector is coming to a standstill. At present the trade is reporting a very acute shortage of Rubberwood sawnwood for the downstream processing sector.

The MDF and particleboard industries are also affected. These two industries normally utilise the small diameter logs and branch wood from the Rubberwood plantations but with less felling and processing they too are facing the problem raw material shortages. The current labour supply situation is quite acute and many people, say the trade, are not fully aware of the serious repercussions of this new move by the Government.

Those in the industry that do not use foreign workers say this crackdown on illegal workers might remove those manufacturers enjoying cheaper labour costs through the hiring of illegal workers and might level the playing field as far a production costs are concerned.

Many in the trade are calling on the authorities to monitor the situation in the industry carefully so as to be fully aware of the effects on all the related industries particularly the situation regarding Rubberwood sawntimber exports and the issue of shortages of raw materials an labour for local industry.

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