Kota Kinabalu: Sabah, a pioneer in the growth of the regional Industrial Tree Plantation (ITP) concept, is in need of a more supportive ITP policy that would ensure the viability of the business that has benefited neighbouring countries like newcomers Vietnam and Indonesia doing it on a larger scale.
Timber Association of Sabah President Norman Wong (pic) made the call at the proceedings of the recent Borneo Forestry Cooperative Conference 2026. The event moderator Yap Li Ling called on the media present to ensure that the top boss overseeing the Sabah Forestry Department gets the vital message.
“I hope some of our members of the media are still here. We need to have a polite message to our top boss (Chief Minister) for optimistic development of ITP and support of all agencies,” Yap said, noting that the Sabah Forestry Department has been very supportive, and responsive to the appeal from the industry to provide the relief of the royalties.
Yap is the Corporate Affairs Director of Forest Solutions. Glen Mac Nair, the Managing Partner and Director of Forest Solutions Malaysia S/B told Daily Express that he had to sell a barge load of ITP timber at a loss after more than 15 years of cultivating their growth.
“I have to keep going or I have to stop,” he said of the challenging situation as the market prices were below expectation, coupled with rising costs, particularly on diesel price inflation due to global uncertainty in fuel supply arising out of U.S. President Donald J. Trump’s war on Iran, and his tariffs.
“We use some 30,000 litres of diesel. The price has gone from around RM3.20 to RM5.30 delivered to our site,” Glen said of the fuel expenses that the company has to bear monthly for its Sabah-based large-scale industrial tree plantation development and management in Kota Marudu and Pitas.
TAS President Norman Wong: “If you look at the supply and demand curve, there is this thing called price mechanism. From experience, from talking to Glen, and also looking at his calculations today, the supplier would have a price of RM300 per cubic metre.
Let’s say that is basically the desired price of the supplier, given that the time, the capex, and the risk that is taken to part.
“When we’re talking about prices, future uncertainty, and so forth, RM300 ringgit is probably the threshold. What we are getting from the market is less than RM200, so there’s a gap of RM100. As a rational player, if you look at that gap, you will not plan because we have to wait for 10 years.
You may not get your return, or you just plan to comply.
“Or if you have growing stock, you would. Probably not others because you cannot make money. And for some of the suppliers who have growing stock, they are going downstream themselves because they have to capture value from what they have planted. Now that is not very desirable when you have a vertical supply chain because it takes a lot of risk, a lot of time, a lot of capex. It is also not as optimal.
“It will never be as efficient or as cost productive, competitive as a horizontal supply chain that I described.”Sabah Forestry Department Deputy Chief Conservator of Forests Indra Purwandita Herry Sunjoto noted the role of Glen’s company in two of Sabah’s and Malaysia’s poorest districts in boosting Sabah’s sustainable timber output, empathized: “So we understand that operational cost, oil price is getting expensive over days.
We didn’t know Uncle Trump would attack Iran, but after that next year maybe he will attack another country and another fuel price hike.
“We don’t know what Uncle Trump is going to attack next. We will give opportunity for everyone to progress, but for those who don’t want to make progress, we will take necessary action. So therefore, Mr. Norman, the opportunity is there. We are in the process of reviewing the structure of the royalties or other charges on the ITP.
“We still have the opportunity and in fact the state government is willing to listen, we are willing to hear and we are willing to facilitate industry as long as the interest of the state is taken into account. We don’t want to lose the revenue.”Noted as a leading advocate for ITP as a driver for the region’s sustainable green economy, Norman Wong calls for rapid policy reforms to catalyse supply chain viability.
“Tuan Indra, I agree with you. I think we’ve had conversations that some of the forestry department has been given KPIs. I think those are quite unfair in the sense that they don’t take into account what’s really happening in the outside market.
But if we just look at what is available for me immediately, which is the revenue, we have to look at it holistically, which is what the balancing is.
“I don’t think that has entered into the conversation yet. They have not seen the picture holistically. That’s why we talked about that. This, beyond forestry, needs help from other departments to drive it. If we look at the bottlenecks that we identified today, for example, infrastructure, technology and tax.
We need to look at this more holistically than we are. We’re just looking at how much revenue we’re collecting.”He stressed that the fastest, cheapest catalyst is policy change as mosaic planting policy depresses productivity. He said dedicated ITP areas are needed. Wong noted that supply chain gaps exist due to price mismatches, requiring holistic, cross-ministerial solutions.
“Things are moving so fast. But in my opinion. The cheapest way to start and the quickest way to start getting some results is changes in policy. Why is changing policy important? Because policy changes will bring it to the minister’s attention.
“As we get our budgets from him, we also frame the thinking and the approach. Then changes of thinking will affect changes of behaviour, and changes of behaviour will affect action. Let me give you a specific example on the change of policy. So far, we still have this FMU Policy.
“Mosaic planting for those who are not from Sabah, is natural forest patches mixed with ITP. And from the data, because we also used to practice mosaic planting, the productivity is very low. Supposedly, the change of policy would be ITP is for, ITP, for example.
“Then you will frame your thinking. Labour issues. What do you need to do to get a proper ITP? Or you need training standards, you need manuals, and where do you get it? Borneo Forestry Cooperative (BFC). So that would give you the actionable approach to solve this. So I think it has to start from policy.”Wong said that immediate leverage lies in policy change as it reframes thinking and behaviour and enables viable budgets and needed action as mosaic planting reduces productivity. Dedicated ITP areas and standards/manuals are needed.
The current price gap (supplier threshold ~RM300/m³ vs market
Therefore, cross-ministerial engagement is essential. ITP operators continue to face various challenges from labour, financing, productivity, infrastructure and market access issues that need all stakeholders to work hard to overcome and be successful soonest.