Let tim­ber in­dus­try work­ers re­sume work – STIA

The Borneo Post (Sabah) - - Home -

KOTA KIN­A­BALU: Sabah Tim­ber In­dus­tries As­so­ci­a­tion (STIA) pres­i­dent Chua Yeong Perng ap­plauds the State Govern­ment for the de­ci­sive move to pro­tect the ci­ti­zens of Sabah from the Coro­n­avirus (Covid-19) pan­demic.

“The STIA sup­ports the govern­ment in the dif­fi­cult task of find­ing the right bal­ance be­tween en­sur­ing the sur­vival of in­dus­try and en­sur­ing the safety of the pop­u­la­tion dur­ing such an un­prece­dented cri­sis,” Chua said.

He also took the op­por­tu­nity to thank all the front­lin­ers who had sac­ri­ficed so much for the State.

Chua em­pha­sized that there were sev­eral loom­ing is­sues that would fur­ther weaken the tim­ber in­dus­try’s abil­ity to pay work­ers’ wages for the com­ing months.

“If re­me­dial ac­tion is not taken dur­ing and af­ter the Move­ment Con­trol Or­der (MCO), the reper­cus­sions would be ir­re­versible. The as­so­ci­a­tion would like to present sug­ges­tions to the Govern­ment that would in­crease em­ploy­ers’ abil­ity to cover wages for the up­com­ing crit­i­cal months.

“The tim­ber sec­tor cur­rently has ap­prox­i­mately 30,000 full­time em­ploy­ees and be­tween 5,000 and 10,000 piece­meal or part-time work­ers. Liq­uid­ity within the for­est and tim­ber in­dus­try is of the ut­most con­cern for the next few months.

“Ma­jor­ity of the play­ers in the in­dus­try would strug­gle to sus­tain ex­ist­ing pay­roll com­mit­ments. At least 50 per­cent of the work­force in the up­stream and down­stream sec­tor will be fac­ing job se­cu­rity risks,” Chua said.

He said due to the in­her­ent re­mote lo­ca­tion of tim­ber fac­to­ries and log­ging camps, most com­pa­nies have 30-40 per­cent their work­force re­sid­ing in liv­ing quar­ters within fac­tory premises or log­ging camps.

“By de­fault, work­ers’ quar­ters act as a quar­an­tine area since en­try and exit is re­stricted and con­trolled by se­cu­rity per­son­nel.

“Since im­ple­men­ta­tion of the MCO, com­pa­nies have proven to have suc­cess­fully con­trolled and mon­i­tored the wel­fare conditions of work­ers stay­ing in com­pany quar­ters.

“With com­pa­nies ex­e­cut­ing ad­di­tional safety mea­sures (PPE dis­tri­bu­tion, tem­per­a­ture check and per­son­nel med­i­cal mon­i­tor­ing) the risk of in­fec­tion for this seg­ment of the work­force is ex­tremely low. Con­sid­er­a­tion should be given for these work­ers to be al­lowed to com­mence work im­me­di­ately.

“So­cial dis­tanc­ing within tight con­fines of worker quar­ters has no ad­di­tional ad­van­tage over fac­tory or camp op­er­a­tional ar­eas.

“The eco­nomic im­pact of los­ing four weeks (and po­ten­tially more if MCO is ex­tended) of pro­duc­tiv­ity how­ever in March - April will have far reach­ing con­se­quences on the for­est and tim­ber in­dus­try. STIA has se­ri­ous con­cerns on in­dus­try’s ca­pac­ity to cover wages in May, June and July,” Chua said.

He said ship­ment of ready goods, con­trolled move­ment of per­ish­able raw ma­te­rial (felled logs) and sys­tem­atic re-start­ing of man­u­fac­tur­ing would go a long way in im­prov­ing the in­dus­try’s abil­ity to main­tain and pay its work­force.

“STIA es­ti­mates that there are ap­prox­i­mately 120 con­tain­ers, worth RM9-10 mil­lion of prod­ucts at Port and at var­i­ous fac­tory lo­ca­tions that that have been held back.

“There are ap­prox­i­mately 100,000 -120,000 m3 of felled logs, val­ued be­tween RM35-45 mil­lion, cur­rently sit­ting idle due to the MCO. The value and qual­ity of the logs con­tinue to de­te­ri­o­rate each week. We ex­pect, over­all, these felled logs would have lost at least 15-20 per­cent of their in­her­ent value.

“Cer­tain non-durable species have lost nearly all its com­mer­cial value by now. In ad­di­tion to this, down­stream mills are now faced with the crit­i­cal prob­lem of wood ad­he­sives ex­pir­ing.

“If par­tial pro­duc­tion is not per­mit­ted over the next few days, it is es­ti­mated 964 MT (963,000 kgs) of ply­wood and wood­work­ing ad­he­sives will need to be dis­posed of. The value of ad­he­sives and the dis­posal cost will come to be­tween RM5 mil­ion and M8 mil­lion.

“There is the con­cern also that Sabah may not have the fa­cil­i­ties to dis­pose of such quan­ti­ties in such a short time frame. STIA is ex­tremely con­cerned that the com­bi­na­tion of the above fac­tors will ul­ti­mately im­pact the in­dus­try’s short term abil­ity to cover em­ployee wages for April and the months af­ter.”

As such, Chua said the STIA ap­pealed to the govern­ment to grant spe­cial per­mis­sion dur­ing the cur­rent MCO pe­riod for ready ship­ments to be ex­ported.

“To avoid mas­sive ad­he­sive dis­posal prob­lems, se­lected fac­to­ries with ex­pir­ing ad­he­sives to be also given re­stricted pro­duc­tion days in or­der to uti­lize their ad­he­sive stock.

“In event the MCO is ex­tended be­yond April 14, STIA sug­gests the govern­ment al­low for cer­tain up­stream and down­stream ac­tiv­i­ties to com­mence oper­a­tion.

“It is rec­om­mended that au­thor­i­ties take ref­er­ence to other states in Malaysia like Sarawak and Jo­hor which have per­mit­ted scaled down man­u­fac­tur­ing op­er­a­tions to com­mence.

“It is un­der­stood that man­u­fac­tur­ing in these states are lim­ited within spe­cific tim­ber in­dus­trial clus­ters and a cap has been placed on the num­ber of work­ers al­lowed to re­turn to work.

“The au­thor­i­ties could take the ini­tia­tive to al­low move­ment of raw ma­te­rial and man­u­fac­tur­ing to pro­gres­sively startup within tim­ber clus­ters (Keningau, KKIP, Ladalam, Ki­ma­nis) that are not deemed a high risk area (hot/red zone).

As high­lighted by var­i­ous other SME as­so­ci­a­tions, Chua said STIA was also of the opin­ion that the re­cently an­nounced Fed­eral Govern­ment Stim­u­lus Pack­age lacks fo­cus on SMEs.

He said it was ap­par­ent that ma­jor­ity of the SMEs felt that the re­cent wage sub­sidy would fall short in its de­sired in­tent of sav­ing jobs. "As such, any quick ac­tion in the com­ing days to mit­i­gate the im­pend­ing short term cash flow prob­lems will go far in re­duc­ing any large scale worker re­dun­dancy.

“STIA feels that it is nec­es­sary for the State Govern­ment to con­sider mak­ing mi­nor changes to the cur­rent MCO. This will at least al­low the in­dus­try to help it­self in the in­terim,” Chua con­cluded.

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