workers at work at a wood based factory
DIVERSIFIED
PROSPECTS OF
MYANMAR FOREST
workers at work at a wood based factory
As Myanmar is a country abundant in forest resources, its forestry industry is reputed to be world famous. It is widely assumed that the quality of Myanmar Teak is outstanding and of highest quality. In accordance with the favourable weather plus adequate rainfall and the right kind of soil, no other country in the world can compete with the quality of Myanmar Teak, nor its status in world timber industry. Although the industry is still in its infancy and its output is comparatively lower than some other ASEAN countries, it has prospects of becoming the biggest in the very near future.
Even before the annexation of the country by the British, there have been evidences that Bombay Burma Timber Company had purchased Myanmar Teak. During the reign of King Aung Zeya, priceless teak forests have been well preserved by the royal decree which proclaimed that, every teak tree regardless of its whereabouts, was the property of the King. Thus, no one was permitted to fell teak trees.
a display of furniture
Since Lower Myanmar came under the British, companies such as Bombay Burma, Steel Brothers, Macarena, Fukar and Stephen Leigh etc. monopolized the industry and exploited timber to such an extent that in disciplined and unlimited felling of teak trees led to the destruction of forests. As a result, the British government appointed Dr. Brandis, a famous forest expert from Germany. He laid down new laws not to fell immature trees and also to restore trees by reforestation and preserving them. Thriving forests of today are the results of efforts done by Dr. Brandis. After gaining Independence, foreign timber companies were nationalized. Foreign companies joined hands with local companies to produce high quality finished products. But the lucarative business came to an end when the government monopolized all aspects of the timber industry during the Socialist era.
Scancia wood based factory
With the change to market economic system after 1988, individual entrepreneurs got the green light to start timber businesses resulting in unceasing exploitations and negative outcomes. Permits were granted before time, and individuals who do not know the dos and don’t’s of the business, were only determined to seek profit without considering the pros and cons of it. At this stage, greedy traders emerged, timber industry became topsy-turvy. This led the government to terminate unregulated exploitation by individual timber entrepreneurs. There were those who achieved profit beyond measure and stopped their business altogether and there were also those who were waiting for the chance to start investing in wood-based industries. However, in retrospect of the past times, there came to be a period when qualitative finished and refined timber products slowly came into view.
Production line of a wood based factory
Investment and Varieties of Business Transactions
Under the Myanmar Investment Commission’s cent-per-cent investment plan, France, Malaysia, China and Thailand have started businesses dealing in teak and other hardwood as well as wood-based industries. Five local entrepreneurs are also involved in semi-finished wood based industries, plywood and other enterprises. A Japanese company set up a pencil factory using semi-popular kind of timber. There is also a joint venture plywood factory between a Korean investor and three local businesses working hand in hand with Myanma Timber Enterprise. The Myanma Timber Enterprise has branches in (1) South Dagon Industrial Zone, Dagon Myothit, Yangon, (2) Wah-Ta-Yar Industrial Zone, Shwe-Pyi-Tha Township, Yangon and (3) one near Amarapura, Mandalay. It can also be seen that it has also invested and set up timber mills in towns such as Mandalay, Bago, Swa and other towns. According to the data taken by the Forest Products JV Corp, there are altogether 191 timber entrepreneurs working in various capacities throughout the country.
Sr. Type of Industries No.of Enterprises
1 Big Scale 21
2 Semi-big scale 25
3 Small scale 105
4 Related Industry 40
Total 191
Source:- Data collected by Forest Products Joint Venture Co, Timber Distribution.(1998- January)
Myanmar’s main finished products and its major buyers
1. Plane finished planks. (Japan)
2. Flooring timber. (Italy)
3. Sculpture Timber. (Sweden)
4. Furniture made from semi- popular timber. (Thailand)
5. Garden furniture. (America)
Quality finished products that have been exported by the government as well as individual sectors only amount to 20% of the total exported wood products. The remaining 80% are timber logs (lumber) and sawn timber which fetch lower value than the finished products. There are other quality products which are well qualified to be in the world market and obtain sufficient earnings.
Traditional Sculpture Industry
In this era, the traditional sculpture industry is one of the professions that obtain foreign exchange for the country. Tourists visiting Myanmar earnestly buy these as souvenirs. Even though Myanmar traditional sculpture is popular among tourists we have to be worried about whether they are really Myanmar products as specified because most of these are sold through our neighbouring countries leading to unfair pricing. But now, local enterprises are dealing with the buyers directly.
Although quality sculpture ranks first in the field of finished products, it cannot be compared to those of mass production. Prices are fixed according to the workmanship and quality, the art of design and proportionality.
Household and Garden Furniture
In countries where forest reserves are scarce, steel, aluminum, plastic and fibre are substituted for furniture making. Wood furniture is so dear that not everyone can afford to buy them. They have to import and make use of raw and semi-finished products from countries like Myanmar. Wood furniture is being highly regarded and prestigious became those countries do not have natural timber forests. It has became a custom for Myanmar wood furniture to be sold via neighbouring countries. Currently, there are businessmen who send wood furniture using containers. The demand for garden furniture supercedes household furniture it is learnt.
The expatriate businessmen who realize the abundance of Myanmar timber resources and low labour charges have started to set up wood based industries.
Workers at work in a wood based factory
Antique furniture industry
It is considered as a useful household furniture but the difference is that, because of its demand in the world market, it has become the most sought after item to earn foreign exchange. European and Asians highly value antique furniture. So do Americans. Some can be bought directly and some through Singapore and Thai agents. People serving in diplomatic services are the main buyers of these antiques. To meet the demands of buyers, antique dealers create industrialized designs or have to make them according to the customers’ request. According to the nature of the work, there are no two antiques alike because they are not mass-produced.
Antique furniture production is not so extensively carried out when compared to other kinds of furniture. Therefore, antique furniture production is rare. It can be accorded as one of the sources for gaining foreign exchange in addition to the upkeep of natural resources.
Other not-so-popular means of wood industry
Apart from the popular timber species such as teak and Pyinkado, there are still 474 lesser used species which not versatile for other uses. These are made into pencils and other products. The majority of these factories are run by foreign investors. Furniture-making and rubber wood industries are the only ones run by local producers. Old rubber trees, which are unable to yield any more rubber sap- are converted into furniture and exported to earn foreign exchange. Because it could be used as a refined product instead of being left as waste, it could be said as ‘Value Added’, but technically it has not reached that status yet.
Because it contains sap, it has to be chemically treated 72 hours after cutting. If this cannot be done after twenty days, it cannot be sold nor used, and it becomes useless.
Rubber plantations come under jurisdiction of the Ministry of Agriculture and Irrigation. Manufacturers of rubber wood have the right to buy these legally from the respective agriculture departments as well as from individual growers. The trees are then sawn into desired sizes. As soon as they are sawn, rubber tree cuttings which are the product of plant origin, automatically comes under the law of Forests Department which is quite remarkable. To be able to reach the world market, it has to compete with Malaysia, another major rubber furniture producing country. In addition to not getting a high value like teak and other hardwoods, rubber wood manufacturers do not get the desired profits due to overhead charges and expenditure.
A display of teak furniture
According to International Tropical Timber Organization (ITTO), which was first established in 2000, every country’s wood based finished products are regarded as environmental products and could be shipped to other countries with the recommendation of an international NGO. Under these circumstances, wood-based industries can be developed with least input raw material and gaining vast incomes, enabling producers to manufacture high-quality products. The wastage of forest resources can thus be prevented. Myanmar, a member of (ITTO) has abided by the rules and regulations to boost wood based industries as well as preserving the natural environment for future generations.
Aspects of Individual Development
It can be clearly seen that the government has been giving every possible assistance to develop quality finished products as well as for export of such products. As the industry needs guidance and regulations of the Forests Department and Myanmar State Timber Board, they set up the required establishment in 1993 when individual businessmen named the it, " The Myanmar Timber Entrepreneurs Association". The MTE invested 45% shares, Forest Department 10% and individuals 45%, with the aim of establishing wood based industry. Individual businessmen have also contributed shares in the enterprise.
Preservation of Natural Environment
The coverage area of Myanmar forests extends to 27,151,000 hectares (67,877,500 acres) and occupies 41.3% of the entire country. Per capita coverage is calculated at 0.6 hectares so it comes next in line to ASEAN member countries such as Laos, Cambodia, Brunei and Malaysia’s per capita coverage. Quality finished products based on forest resources serve not only for the country’s income but also effectively preserve the natural environment. The country’s beauty and abundance of natural resources can nurture the roots of Eco-Tourism, enticing tourists and creating more income for the country. The currently popular ecotourism sites such as Moe-Yun-Gyi Lake and ecotour companies such as Wood Land Travels are the main instances of support for the preservation of natural environment. As soon as the market-oriented system was introduced, the government terminated illegal timber operations and replaced it with wood based industries manufacturing quality finished products. Myanmar has a huge prospect of becoming the core of international furniture market in the near future.