For the first five months of 2009, exports of the wood and wood-based sub-sector, encompasses both wood and paper products, fell 19.3 per cent to RM5.3 billion compared to the corresponding period last year. This was a result of dampened demand from Malaysia’s major export markets, such as the USA and Europe.

To streamline and improve the efficiency of the timber sub-sector, the government launched the National Timber Policy (NATIP) on 17 February 2009. Among its objectives, NATIP serves to ensure that the industry continues to enhance its competitiveness in the global marketplace.

The Government continues to promote higher value-added downstream activities through the provision of special funding and grants. These support facilities assist Malaysian companies in setting up and expanding infrastructure facilities, R&D, training and streamlining procedures to facilitate increased production.

The Malaysian government has also embarked on several initiatives to enhance market access. These initiatives include Voluntary Partnership Agreement (VPA) with the European Commission (EC). This agreement aims at combating illegal logging and reducing illegally harvested timber. Malaysia is the first country to commence formal negotiations to conclude a VPA and this should help ensure that Malaysian wood products will have a better access to the EU market.

In 2008, a total of 87 projects with investments of RM1.2 billion were approved for the wood and wood-based product sub-sector. In 2009, for the period of January – May 2009, Malaysia received a total investment of RM135.6 million for the sub-sector involving 14 projects.