Kota Kinabalu: The Sabah Timber Industries Association (STIA) urged the Madani Government to include timber industry players in its targeted diesel subsidy programme, saying rising fuel costs are putting pressure on operators and affecting the sector’s competitiveness.
STIA president Tan Peng Juan said the timber industry remained an important contributor to Sabah’s economy through exports, manufacturing, employment and rural development.
He said the industry supported thousands of direct and indirect jobs in logging, forest plantations, transportation, sawmilling, plywood and veneer production, furniture manufacturing and other downstream activities.
“The entire timber supply chain depends heavily on diesel-powered machinery, heavy vehicles and equipment.
“From harvesting timber in remote forest areas to transporting logs and processing wood products, diesel remains the primary source of energy due to the lack of practical alternative fuels for these operations,” he said.
Tan said the implementation of diesel subsidy rationalisation had significantly increased operating costs across the timber value chain, affecting production costs, profit margins and the competitiveness of Sabah’s timber products.
He said small and medium-sized enterprises (SMEs), contractors and transporters were particularly affected.
“Given the industry’s strategic economic importance, the increased cost burden extends beyond individual companies. It has implications for employment, investment, export performance and the sustainability of rural economic activities throughout Sabah,” he said.
Tan said STIA proposed that qualified timber operators be made eligible for the targeted diesel subsidy scheme.
He said the assistance could help reduce production costs, protect jobs and livelihoods, particularly in rural and interior areas, support downstream manufacturing and timber exports, and encourage investment in sustainable forest management.
He also warned that excluding SMEs in the timber sector, particularly those involved in building, joinery and carpentry, furniture and retail supply chains, could result in higher operating and construction costs.
“These increased costs will be passed along the value chain, leading to higher prices for timber products and construction materials, ultimately affecting businesses and local consumers alike,” he said.
Tan said extending the subsidy to eligible timber operators would have wider benefits for Sabah’s economy by supporting businesses, employment, exports and rural economic activities.
He said STIA hoped the Madani Government, through the Ministry of Domestic Trade and Cost of Living (KPDN) and its Minister Datuk Armizan Mohd Ali, would consider the request.
Tan added that STIA had sent an official letter to the ministry and was ready to meet with Armizan and senior ministry officials to discuss the challenges faced by the timber industry.
