STIA calls for stronger government support for Sabah timber sector

KOTA KINABALU (Dec 9): The Sabah Timber Industries Association (STIA) is calling on the State Government to strengthen support for Sabah’s timber and wood-based sector amid rising structural challenges and mounting pressure to remain competitive and sustainable.

STIA president Tan Peng Juan said the industry is at a critical crossroads.

“Industry players are concerned that without decisive action, the timber sector — which supports thousands of livelihoods and contributes significantly to the national economy — may struggle to sustain itself in the years ahead,” he said in a statement on Tuesday, in which he also congratulated the newly formed Sabah Cabinet led by Chief Minister Datuk Seri Panglima Hajiji Noor.

He emphasised that Sabah’s timber industry remains a vital economic contributor, generating employment, supporting rural communities and producing significant export revenue.

“In 2024, Sabah’s forest product exports generated RM1.13 billion, underscoring the sector’s continued relevance,” he added.

Tan noted that a key instrument guiding the industry’s future under Industrial Tree Plantation (ITP) is the Action Plan on Forest Plantation Development (2022–2036).

“The industry hopes the government will continue monitoring concession licensees’ planting progress. The road ahead for ITP will not be easy, and the industry cannot overcome the challenges without strong and sustained government support,” he said. He warned that with the ecosystem still heavily dependent on tropical logs, the long-term sustainability of the sector is at risk without a strategic transition to ITP.

Another major concern is the industry’s changing workforce landscape.

“There are critical labour gaps both upstream and in specialised downstream areas,” he said, noting that the sector still relies heavily on foreign workers skilled in traditional tropical timber operations.

“Without a catalyst for change such as ITP, the diminishing and ageing local workforce will likely worsen. Many Sabahans trained in wood- and forest-based disciplines are struggling to find suitable jobs matching their skills and wage expectations,” he said.

Tan added that the industry urgently needs major investments in both upstream and downstream segments to introduce new technology and automation that can offset workforce challenges.

“Potential investment will depend heavily on the success of Sabah’s current and future development in ITP,” he said.

He also stressed that Sabah’s timber sector faces external pressures, including fluctuating global demand, trade barriers and evolving international regulations.

“Strict export standards, sustainability certifications and tariffs can increase costs and limit market access. These pressures affect revenue and profitability while pushing companies to maintain high standards and adopt stringent sustainable practices,” he said.

Tan said these combined challenges underscore the need for strategic policy support, workforce development, infrastructure improvement and stronger sustainability measures to ensure the sector remains competitive and resilient.

“The road ahead is not easy. As we navigate rising global competition, tightening resource availability and increasing compliance demands, government intervention is more crucial than ever,” he said.
STIA urged the government to:

Enhance investment incentives to attract technology-driven wood-based manufacturing.

Accelerate ITP development to reduce reliance on natural forests and secure long-term raw material supply.

Introduce targeted financing schemes to drive upgrading, automation and sustainability compliance.

Strengthen cross-agency collaboration to streamline approvals and reduce red tape.

Digitalise agency processes to improve efficiency and coordination.

Support skills development programmes to prepare the next generation for a modernised timber ecosystem.

“These measures are not merely requests — they are essential to ensure the industry’s survival, growth and alignment with global sustainability expectations,” Tan stressed.

“With the right support, the timber industry can continue contributing to the State’s development while transitioning towards more sustainable and resilient production models. Embracing Industry 4.0 will further enhance productivity and build a future-ready supply chain.”

Tan added that STIA stands ready to collaborate with ministries and agencies to develop a clear roadmap for transforming the sector and securing its long-term competitiveness, ensuring that Sabah’s industrial landscape advances through innovation, sustainable growth and stronger global positioning.