STIDC-Annual Report 07 - sarawaktimber.org.my · State Financial Secretary ... Assistant General Manager (Resource Development) ... • Human Resource Management • Human Resource

Contents Page

Corporate Vision 1

Corporate Mission 1

Quality Policy 1

Corporate Functions 1

STIDC Board of Management 2

STIDC Management Team 4

Corporate Structure 6

Message From the Right Honourable Chief Minister of Sarawak cum Chairman, STIDC Board of Management 8

Main Corporate Activities

- Trade Development 11

- Domestic Trade 12

- Resource Development 13

- Project Development 14

- Industrial Planning 15

- Preventive & Enforcement 16

- Registration & Licensing 17

- Divisional Offices 17

- Corporate Investments 18

STIDC Activities in 2007 20

Financial Statements 1

Part I

Part II

Corporate VisionPUSAKA (STIDC) as the leader and catalyst of the timber industry.

Corporate Mission

To plan, coordinate and develop the timber industries in Sarawak towards optimum and efficient utilisation

of timber resources by encouraging downstream processing and product diversification. In line with

these objectives and the National Vision 2020, STIDC is responsible to develop a disciplined, skilled and

capable work force.

Quality PolicyCommitted to render quality services professionally in line with STIDC objectives to meet customers’

satisfaction.

Corporate Functions- Control and co-ordinate the manufacturing standards and trade practices of timber industry;

- Make recommendations to the Government as to the methods, measures and policies to be adopted

to facilitate the improvement of existing timber industry, and where approved by the Governor-in-

Council, to implement and assist in the implementation of the same;

- Encourage effective utilisation of timber with emphasis on products diversification and quality

control;

- Promote, stimulate and facilitate the development of the timber industry in Sarawak, and in connection

with the discharge of its functions to assist any person engaged in the production and marketing of

timber;

- Provide technical advisory services for the purpose of assisting in the development of existing timber

industry and in the establishment of new industries; and

- Provide training in various aspects of logging operations, activities associated with the timber

processing, sawmilling, sales and marketing of timber.

Part I

1ANNUAL REPORT 2007

Seated (left to right)YBhg Tan Sri Datuk Amar Haji Bujang Mohd Nor, YB Datuk Amar Haji Awang Tengah Ali Hasan, YAB Pehin Sri Haji Abdul Taib Mahmud (Chairman), YB Tan Sri Datuk Amar Haji Abdul Aziz bin Haji Husain, YBhg Datu Wan Alwi Dato’ Sri Wan Hashim

Standing (left to right)YBhg Datuk Haji Abdul Hamed bin Haji Sepawi, YBhg Datu Haji Len Talif Salleh, YB Tuan Haji Julaihi Narawi, YBhg Datu Cheong Ek Choon

2 SARAWAK TIMBER INDUSTRY DEVELOPMENT CORPORATION

STIDC Board of Management

Chairman

YAB Pehin Sri Haji Abdul Taib MahmudChief Minister of Sarawak cum SarawakMinister of Planning and Resource Management

Board Members

YB Datuk Amar Haji Awang Tengah Ali HasanMinister of Planning and Resource Management IIMinister of Public Utilities

YB Tan Sri Datuk Amar Haji Abdul Aziz bin Haji HusainGroup Managing Director, Sarawak Energy Ltd.

YBhg. Tan Sri Datuk Amar Haji Bujang Mohd Nor (until 21 May 2007)Executive Chairman, Harwood Timber Sdn Bhd

YBhg. Dato Sri Ahmad Tarmizi bin Haji Sulaiman (appointed 22 May 2007)State Financial Secretary

YB Tuan Haji Julaihi NarawiChairman, Lingkaran Jaya Sdn Bhd

YBhg. Datu Wan Alwi Dato’ Sri Wan HashimPermanent Secretary, Sarawak Ministry of Planning and Resource Management

YBhg. Prof. Datuk Dr. Yusuf Hadi Executive Chairman, Ta Ann Holdings Berhad

YBhg. Datu Cheong Ek ChoonDirector, Sarawak Forestry Corporation Sdn Bhd

YBhg. Datu Haji Len Talif SallehGeneral Manager, STIDC

Not In The Photo

3ANNUAL REPORT 2007

Seated (left to right)Cik Haluyah Awi, Tuan Haji Rabani Taip, YBhg. Datu Haji Len Talif Salleh, Puan Dayang Nena Abang Bruce, Puan Catherine Sng Bee Seio

Standing (left to right)Encik Tagat Jimbat, Encik Edmund Daging Mangku, Encik Mohd. Hinri Abdullah, Encik Hashim Haji Bojet, Encik Paul Lau Ngie Hung, Encik Jerry Mawan Lading


YBhg. Datu Haji Len Talif SallehB.Sc (Forestry), The Australian National University, AustraliaGeneral Manager

Tuan Haji Rabani TaipB.Sc (Resource Econ.), Dip. in Agriculture, Universiti Pertanian MalaysiaDeputy General Manager

Encik Hashim Haji BojetMaster in Corporate Business Administration, CMM/ Ohio University USABBA (Hons), Universiti Kebangsaan MalaysiaActing Senior Assistant General Manager (Project Development)

Puan Dayang Nena Abang BruceMaster (Business Administration), Heriot-Watt University, UKDiploma in Marketing, The Chartered Institute of Marketing, UKB.Econ.(Hons), Universiti MalayaActing Senior Assistant General Manager(Trade Development)

Puan Catherine Sng Bee SeioB.Com. (Acct), University of Otago, Dunedin, New Zealand Chartered Accountant - Institute of Chartered Accountants of New Zealand (ICANZ)Chartered Accountant - Malaysian Institute of Accountants (MIA)Assistant General Manager (Finance & Investment)

Cik Haluyah AwiBachelor of Law Degree (LLB) (Hons), Institut Teknologi MARADiploma in Law, Institut Teknologi MARAAssistant General Manager (Administration)

Encik Tagat JimbatB.Sc. (Forestry), Universiti Pertanian MalaysiaAssistant General Manager (Domestic Trade)

Encik Edmund Daging MangkuB.Sc. (Forestry), Universiti Pertanian MalaysiaAssistant General Manager (Resource Development)

Encik Mohd. Hinri AbdullahDiploma Pengurusan Pemasaran & Pengedaran Fizikal, Institut Pengajian Sains Pengurusan Delft, NetherlandsDiploma in Public Administration, Institut Teknologi MARAAssistant General Manager (Preventive & Enforcement)

Encik Paul Lau Ngie HungB.Sc. (Forestry), Universiti Pertanian MalaysiaActing Central Region Manager

Encik Jerry Mawan LadingB.Sc. (Forestry), Universiti Pertanian MalaysiaActing Northern Region Manager

Management Team

5ANNUAL REPORT 2007

Corporate Structure

Project Development Division• Technical Services• Entrepreneur

Development• Project

General Manager

Board of Management

Ministry of Planning and Resource Management

Resource Development Division• Planted Forest Resource• Natural Forest Resource • Industrial Training

Corporate Affairs Section

Registration & Licensing Division • Registration &

Licensing

Industrial Planning Division• Industrial Planning• Quality Control• Industrial Standard

Central Region Offices• Sibu• Tanjung Manis, Mukah• Sarikei (Liaison Office)• Mukah (Liaison Office)


Legal and Secretarial Services Section

Deputy General Manager

Administration Division • Human Resource

Management • Human Resource

Development• Information &

Communication Technology

• General Services • Building

Management• Security

Finance & Investment Division• Finance• Investment

Trade Development Division• Trade

Development • International

Relations• Publications

Internal Audit Section

Domestic Trade Division• Domestic Trade

Preventive & Enforcement Division• Preventive & Enforcement

Northern Region Offices• Bintulu• Miri• Limbang (Liaison Office)

7ANNUAL REPORT 2007


Message From the Right Honourable Chief Minister of Sarawak

Pehin Sri Haji Abdul Taib Mahmud

A s s a l a m mu a l a i k u m wa r a h m a a t u l l a h i

wabarakatuh and Salam Sejahtera. In the Name of

Allah, The Most Gracious and The Most Merciful.

On behalf of STIDC Board of Management, it is

my pleasure to present this Annual Report and

Financial Statement for the year ended 31

December 2007.

The market sentiment for timber and timber

products was quite weak throughout year 2007.

Despite the promising trend in the first half of

the year, exports earnings of timber and timber

products ended on lower note in 2007. The export

value declined by 12% compared to the previous

year. This represented a decrease of RM1.03 billion

to RM7.74 billion from RM8.77 billion recorded

during 2006.

The recession in global market was due to

economic uncertainties of USA that had also

affected the timber industries. The main issue

faced by the timber industries was fuel price hike

which correspondingly increase the energy cost.

Other market barriers include tight supply of raw

materials, procurement policies, political worries,

surging freight rates and the appreciation of the

Malaysian Ringgit against the US dollar.

Sarawak has entered this period of global

uncertainty by intensifying measures to minimize

the effects of these challenges which include

continuously stepping up the initiatives to address

issues affecting the local timber industry. This

includes intensifying measures to prevent illegal

timber logging and trading activities through

more concerted enforcement and surveillance

efforts by relevant governmental bodies, installing

a Satelite-lmagery System and a Monitoring,

Enforcement and Prevention (MEP) System which

are advanced enforcement and surveillance

technologies used to detect encroachment

and illegal logging activities. Our intensive and

extensive involvement in discussions and forums at

both national and international levels also served

as a testimony of our commitment to address the

issue of illegal logging and trading activities in the

State.

In today’s market environment where timber

certification is gaining popularity among

consuming countries, Sarawak has already

been embarking on a timber tracking system

called Chain-of-Custody system which will allow

transparency in all activities related to the export

of timber and timber products from Sarawak,

aimed at enhancing the customers confidence

towards its legality and sustainability.

In shaping the future of the local timber industry

to be more competitive and resilient in the global

arena, the government through STIDC will continue

to address all issues related to administrative and

human capital matters while at the same time

9ANNUAL REPORT 2007

PEHIN SRI HAJI ABDUL TAIB MAHMUDChief Minister of Sarawak

Chairman, STIDC Board of Management

enhancing Research and Development activities

in forest plantation as well as in downstream

timber processing sectors.

Forest resource depletion is becoming a reality in

the producing countries. It is pertinent to address this

problem accordingly to sustain the wood based

industries and to balance the outflow of foreign

exchange from the state. The establishment of forest

plantation is considered as an integral part of the

long-term forest resource management strategy.

Production from forest plantation supplements

and complements the supply from natural forests

in order to ensure adequate timber supply to the

wood based industries.

Through concerted efforts and co-operations from

relevant parties and greater participation from

the private sector, I am confident Sarawak timber

industry will continue to forge ahead and remain

as the key contributor to the State GDP as well as

to the prosperity and growth of the nation.

There is no sign of a quick recovery in the global

market that can enhance the prospect of the

timber industry in the near future. While other

factors such as oil prices and procurement policies

are beyond control, local manufacturers have to

take initiatives in producing more value added

products especially from cheaper raw materials

such as wood wastes to remain competitive in the

international market.

I would like to thank my fellow STIDC Board

Members, relevant government departments and

statutory bodies, partners and suppliers, clients and

other stakeholders for their undivided support and

co-operation. My sincerest gratitude also to the

management and staff of STIDC for their hard work

in making this year’s Annual Report a success.


The local timber industry has been facing

quite a number of challenges, especially from

nongovernmental organizations (NGOs) which

among others, constantly link tropical timber

trade with illegal logging activities, environmental

destruction and global warming. In addition,

governments and consumers in importing countries

also emphasize that the supply of timber be from

legal sources and sustainable forest management,

leading to stricter procurement policy. These have

adverse impact on demands of timber products

coupled with slower global economic growth which

resulted in the decrease of Sarawak timber export

value by 12%, from RM8.77 billion in 2006 to RM7.74

billion in 2007.

To meet these challenges and in an effort to

disseminate and correct any misperception with

regard to issues relating to state legislation on forest

management and timber industry, STIDC played

proactive roles throughout 2007 by participating in

forums at national, regional and international levels.

In the International Seminar for “Tackling Illegal

Logging” held in Tokyo, STIDC presented a paper

on Chain of Custody for Sarawak - Timber Tracking

Procedure. STIDC also participated in a similar

forum on illegal logging organized by Chatham

House in London.

STIDC had also organized a briefing for the

industry on Japan’s Action for Tackling Illegal

Logging Government Procurement Policy. The

briefing on Japan’s green procurement policy

was aimed at providing right information and

creating understanding amongst local timber

manufacturers and exporters. STIDC is also

committed and actively involved in organizing the

Malaysian Forest Dialogue in addressing issues

relating to the forestry sector.

STIDC appointed an independent consultant, URS

Australia Pty Ltd to study and review the process for

Chain of Custody (CoC) in Sarawak. Besides being

able to identify the critical areas for improvement,

this study is also crucial in giving assurance that our

timber products come from legal and sustainable

sources.

STIDC in collaboration with the Malaysian Timber

Council (MTC) had successfully organized

another familiarization visit of the European trade

representatives to Sarawak. Part of the objectives of

this program is to provide delegates with an insight

into the existing state legislation pertaining to the

forests and forestry sector in the state. It is also our

hope that the delegates will stand to benefit from

this program as they were exposed to all aspects

relating to the timber industries in the state.

In enhancing the awareness of the usage, marketing

and development in forest plantation, STIDC

successfully organized an international seminar

on ‘The Potential and Challenges of Utilization and

Marketing of Acacia’. The seminar, jointly organized

with Sarawak Forests Department and Sarawak

Timber Association (STA), was officiated by The Right

Honorable Pehin Sri Haji Abdul Taib Mahmud.

STIDC together with other relevant agencies in

Sarawak and the federal government continued to

Main Corporate Activities

Trade Development

11ANNUAL REPORT 2007

be actively involved in discussions with the European

Commission (EC) in Forest Law Enforcement,

Governance and Trade (FLEGT) Voluntary Partnership

Agreement (VPA). The first Malaysia-EC Senior

Official Meeting (SOM) was held in Miri, Sarawak,

while the second meeting was held in Brussels,

Belgium. STIDC was also involved in Technical

Working Committee (TWG) meetings between

Malaysia and the European Union, stakeholder

consultations, National Steering Committee (NSC)

and Working Group (WG) meetings. The FLEGT VPA

activities in 2007 were mainly focused on drafting

and preparing the licensing system, Timber Legality

Assurance System (TLAS), one of VPA’s major

components.

In an effort to promote our timber and timber

products, STIDC organized a Timber Selling Mission

to India (Chennai, Bangalore and Mumbai) on 2 - 9

December 2007 as well as participated in the Export

Furniture Exhibition (EFE) in Kuala Lumpur. In order

to remain competitive in the international trade

environment, STIDC will ensure that continuous

efforts be undertaken to enhance as well to protect

and safeguard the interests of the state and the

local timber industry.

Domestic Trade Division is responsible for the

processing and issuing of export and import

licences for logs and timber products using the

ePermit System.

On 15th August, 2007, STIDC and Dagangnet

Technologies Sdn Bhd successfully launched the

ePermit System for the import and export of timber

and timber products to and from Sarawak. The

launch was held at Bandar Baru, Tanjung Manis,

Mukah.

The implementation of this system enables on-

line application for export and import of logs and

timber products to be carried out. Besides efficiency,

the system enables applicants to check the status

of their application easily and at the same time

leads to an improved delivery system that meets

customers’ satisfaction.

The total number of export licenses issued in 2007

were 27,090 as compared to 34,030 in 2006, a

decease by 20.39 %. From the total, 30.99 % or 8,396

export licenses issued for plywood, 28.29 % or 7,665

for logs, 22.42 % or 6,075 for sawn timber, 5.34 % or

1,447 for medium density fibre board (MDF), 3.52 %

or 955 for veneer and 9.44 % or 2,552 for other timber

products.

For further enhancement and strengthening of

quality services, the Domestic Trade Division has

introduced MS ISO 9001:2000 with a documentation

workshop conducted by a Consultant from MFQ

Asia in December, 2007.

Domestic Trade


Resource Development STIDC’s roles in Resource Development are to ensure

that sufficient supply of raw materials and human

capital is always sustainably available. In achieving

these fundamental functions, prominent activities

that were implemented during the year consisted of

monitoring the implementation of log quota policy

and organizing industrial meetings.

Other equally important activities conducted were,

monitoring the implementation of Ramin export

quota, processing of log importation applications,

issuing sustainable forest management and legality

statement certificates, monitoring the logging

progress of STIDC’s timber licensed areas, monitoring

the progress of STIDC’s licences for planted forests

and involvement in the technical committee for the

recruitment of foreign workers.

In regard to log quota policy, about 7.0 million m3 or

85% of the total log production has been processed

locally in 2007 as compared to 5.6 million m3 or 77%

in the previous year. This is a clear indication that the

timber industry is pro-actively involved in the business.

The log quota policy requirements remained a status

quo i.e. still mandatorily requiring 60% of the total log

production to be reserved for local processing.

Apart from this, to encourage greater participation

in commercial tree plantation, a supplementary

source of future log supply, STIDC has embarked on

collaborative research and development programs

with the private sectors to determine the suitability of

timber species for tree plantations.

STIDC has also been tasked with closely monitoring the

distribution and exportation of Ramin timber products.

In 2007, Sarawak has been accorded, by Convention

on International Trade in Endangered Species of Wild

Fauna and Flora (CITES), a Ramin export quota of

13,000 m3 and of which 10,000 m3 or 78% has been

exported. The introduction of Ramin export quota is

a precautionary measure undertaken by CITES to

protect the species from possible extinction.

The issuance of legality statement certificates became

relevant at times as some of the importing countries

might request for verification of the origin and legal

status of the timber products. A total of 200 certificates,

amounting to 13,300 m3 of timber products was issued

throughout 2007 as compared to 210 certificates,

amounting to 16,700 m3 of timber products, issued in

the previous year.

To further enhance the availability of raw materials

for timber processing industry, importation of logs

was permitted with prior approval from the Ministry of

Planning and Resource Management (MPRM). Apart

from that, the status updates on planting or logging

activities at STIDC timber licensed areas have been

consistently carried out throughout 2007 in order to

identify any possible areas of improvement for more

efficient implementation.

Another important dimension in the area of resource

development was capacity building, of which STIDC

aimed to cater sufficiently for the needs of human

capital in the timber industry.

Throughout 2007, more than 100 youths were

successfully trained in furniture making, wood

carving and timber grading skills during structured

skill-based trainings organized on an annual basis.

Supplementary efforts such as organizing human

resource development programs were periodically

initiated which were consistent with the needs of the

industry.

Apart from that, STIDC continued its extensive


Project Development

As a committed corporate body, STIDC whole-

heartedly embraced the notions of Corporate Social

Responsibility and Corporate Social Investment

(CSI) - the former addressing STIDC’s overall

response to economic, social and environmental

considerations and the latter (in addition to its

regular business activities) our contribution to the

communities in which we serve.

Apart from the regular business activities, STIDC is

also entrusted with the task of shaping the future

of Sarawak through the development of Tanjung

Manis New Township with a number of industries

to be developed there i.e. palm oil, shipbuilding,

tourism and fisheries.

Until 2007, STIDC has successfully transformed

Tanjung Manis, Mukah from a very small town with

limited access to the outside world, into a new

township having all the necessities and modern

facilities that enables it to function as a booming

industrial area in the central region of Sarawak.

Several on-going and future projects in Tanjung

Manis are and will be to enhance the role of

Tanjung Manis as one of the important growth

nodes in the development corridor of Sarawak,

which plays an important role in supporting the

development of Sarawak’s economy. Examples of

projects launched in 2007 were Palm Oil Industrial

Cluster, Central Oil Distribution Terminal and the

new mosque for Kampung Rajang.

Besides that, STIDC new business venture in the

residential project i.e. Sumber Alam Sanctuary is

one of STIDC’s efforts in diversifying its activities. The

residential project, a pioneer one ever done by

STIDC, aimed at building homes that not only last

for generations but appreciate in value, ranging

from medium to high-end residential. The project

was officially launched by the Right Honorable

Chief Minister of Sarawak, Pehin Sri Haji Abdul Taib

Mahmud in February 2007.

As entrepreneurship is indispensable for economic

development, STIDC has long been providing

assistance for small entrepreneurs in timber related

business, may it be in terms of funding, financial

assistance, technical assistance and services or

other relevant assistance i.e. marketing. To date,

STIDC Vendor Program has successfully assisted 45

vendors throughout Sarawak.

Indeed, STIDC has traditionally upheld the socio-

economic tenets underscored by a number of

projects lined up for the present as well as the

future.

involvement in the Jawatankuasa Pengambilan

Pekerja Asing Sarawak which was very crucial in

determining an adequate supply and availability of

manpower, be it the expatriate workers or the general

workers, in order to meet the operating capacity of

the industry. With the support from STIDC, 6,200 work

permits were issued by the Labour Department for

the recruitment of foreign workers in the local timber

industry throughout 2007.

In a nutshell, forest and human resources development

activities in 2007 were successfully carried out in

tandem with the aspirations of National Vision 2020

which required an uninterrupted supply of raw

materials and human capital for current and future

development of Sarawak timber industry.


Industrial Planning

The roles of Industrial Planning are to plan,

monitor, review and report the physical

development of wood based industry in Sarawak.

These responsibilities are carried out through

involvement in preparing strategic macro

planning for the industry, monitoring, reporting and

reviewing physical development, implementation

of Timber Grading Regulations and Development

of technical standards for timber products.

Planning

The wood based industry continues to be one of

the main manufacturing sectors contributing to

the social-economic development of Sarawak. In

an effort to sustain development, STIDC involved

actively in committees preparing strategic plans

for the wood based industry in the Ninth Malaysia

Plan (9MP), Industrial Master Plan III (IMP3) and

National Timber Industry Policy (NATIP).

Development policies that were implemented

have successfully been able to continuously

attract new investments in the timber industry.

In 2007, a total of 51 applications to regularize,

expand and develop new projects were received

and processed. Out of this total, 33 applications

were approved by the Industrial Coordination

Committee (ICC) with an investment capital

amounting to RM176.54 million and generating

almost 3000 employment opportunities.

Development

By the end of 2007, there were already about 822

wood based mills in Sarawak. The total annual

installed and utilized capacities of the primary

processing industry were 9.7 million m3 and 10.5

million m3 respectively. Total production of primary

products like plywood, sawn timber and veneer

were 3,444,400 m3, 1,432,489 m3 and 482,799 m3

respectively. The wood based industry in Sarawak

has been able to optimize utilization of wood

resource by processing mill residues into value-

added products. Annual output of such products

like fibreboard, particle board and wood chip

were 267,100 m3, 128,101 m3, and 341,474 m3,

respectively.

Quality Control

As the Grading Authority for Sarawak, STIDC

is responsible for supervising timber grading

activities which are carried out by 446 competent

timber graders. A total of 1,195,784 m3 of sawn

timber exported was checked and graded by

STIDC in 2007. STIDC is also involved in the national

level committee to review the Malaysian Grading

Rules for Sawn Hardwood Timber.

Industrial Standard

Increased consumer awareness on the importance

of safety and health factors in a particular product,

requires domestic producers to comply with

standards imposed by the consumer countries

i.e. the control of formaldehyde emissions from

wood panel products. STIDC’s active involvement

in committees to develop and monitor

compliance directives for technical standards

at the international level served to ensure that

its implementation would not become technical

barriers to local producers penetrating global

markets. On 9th August 2007, STIDC organized


Preventive and enforcement activities carried

out by STIDC are, to enforce the provisions under

The Sarawak Timber Industry Development

Corporation Ordinance, 1973 and The Sarawak

Timber Industry (Registration) Regulations, 1999, to

control the import and export of timber and timber

products to ensure that those involved in these

activities comply with the relevant regulations

and procedures. This is achieved through close

monitoring and consistently carrying out preventive

and enforcement activities throughout the year.

Preventive and enforcement activities mainly

focused on monitoring and controlling the entry

of timber and timber products from Indonesia in

an effort to curb smuggling of the timber products

from the country into the state, an issue which has

attracted a great deal of international attention.

The initiatives undertaken by STIDC in ensuring

that timber and timber products imported

from Indonesia are from legal sources include

amongst others stringent control and inspection

at all Inspection Stations at Harwood Timber Sdn.

Bhd. depots at Sematan, Biawak, Tebedu, Batu

Lintang and Lubok Antu.

Patrol and inspection activities were also intensified

along the Sarawak - Kalimantan border areas in an

effort to combat any timber smuggling activities

across the border. Among the agencies involved

in the patrol and inspection activities are Royal

Malaysian Police, Malaysian Armed Forces, Royal

Malaysian Custom, Land Transport Department,

Marine Department, Immigration Department

and Malaysian Maritime Enforcement Agency.

STIDC has also held periodically discussions with

timber importers in order to collect information

and at the same time to increase the importers

awareness as well as reminding them of the

regulations and procedures that they have to

comply with.

Preventive & Enforcement

a briefing on the New Export Requirements of

Plywood to Taiwan in Bintulu by the Bureau of

Standards, Metrology and Inspection (BSMI)

Taiwan. The briefing was to acquaint participants

with the requirement on allowable formaldehyde

emission level for plywood products exported to

Taiwan effective 1st July 2007.

Information Management

Accurate and updated information is the

fundamental requirement in planning, monitoring

and reporting on the physical development of

domestic timber industry. In 2007, an electronic

information management system was developed

to manage systematically data pertaining to

wood based industry and grading activities

carried out by competent timber graders. The

system will be used by all STIDC offices throughout

Sarawak.


In 2007, STIDC successfully identified and registered 78

new companies through Visit Customer Campaign,

30 companies more than the yearly target of 48 (an

increased of 62.5% as compared to the yearly target).

The overall number of registered companies in 2007

however shows a decrease of 47% or 170 companies

as compared to 322 companies registered in 2006.

In the preparations to take over the function of issuing

mill license from the Forests Department on 1st July

2008, amendments to “The Sarawak Timber Industry

(Registration) Regulations, 2008” have been made

and a number of briefings and discussions was also

held between the Forests Department and STIDC to

ensure a smooth and efficient handing over of the

subject matter.

To enhance the service delivery system for the industry,

plans are already in the pipeline to implement

E-Regnet (Electronic Registration Network) system,

an online registration system that will facilitate an

efficient and effective registration process between

STIDC Headquarters and its divisional offices which is

expected to be ready by early 2009.

Registration & Licensing

As an agent of growth and a catalyst to Sarawak

timber industry, it is ultimately our responsibility to

ensure that the services we provide to our customers

are of the highest quality. These include ensuring the

smooth flow of our administrative activities throughout

the divisions in Sarawak.

These are the roles played by STIDC divisional and

liaison offices which have been strategically set up in

Sibu, Sarikei, Tanjung Manis, Mukah, Bintulu, Miri and

Limbang.

The main activities carried out by our offices at the

divisional level are:

- To monitor the development of the wood based

industry in their areas

- To implement sawn timber Grading Rules

- To implement the “Sarawak Timber Industry

(Registration) Regulations, 1999”

- To process and issue export licenses for wood

products

- To implement Furniture Vendor Development

Programs

- To collect data on industry workforce and industrial

trainings for the wood based sector

- To monitor the progress of STIDC forest license

concessions

Divisional Offices


Corporate Investments

STIDC’s corporate investments in 2007 were listed as follows:

Harwood Timber Sdn Bhd Sale of logs, production and sale of sawn timber

STIDC Belian Holdings Sdn Bhd Belian timber operator and sawmill

Hillog Sdn Bhd Woodworking and related timber processing services

Tanjung Manis Shipping Sdn Bhd Transportation and wharfing services, trading in construction materials and construction works, renting of speedboat and log ponds.

Tanjung Manis Sawmill Sdn Bhd Trading in peat swamp logs and letting of sawmill, plant and machinery.

Tanjung Manis Development Sdn Bhd Project management services and construction works.

Tanjung Manis Furniture Sdn Bhd Furniture production

Saratim Insurance Agency Services Sdn Bhd Insurance agency

Tanjong Manis Realty Sdn Bhd Marketing, managing and selling of houses at Sumber Alam Sanctuary

Elmhurst Sdn Bhd Landscaping, road construction and reforestation works.

Tanjong Manis Moulding Ind. Sdn Bhd Manufacturing wood plastic composite products

Tanjong Manis Resources Sdn Bhd Manufacturing of woodchips

Hornbill Skyways Sdn Bhd Aviation services

Teratim Sdn Bhd Timber logging

Amra Timbers Sdn Bhd Timber logging concession

Balamra Sdn Bhd Timber logging concession

Kestrel Sdn Bhd Timber logging concession

Tinamou Sdn Bhd Timber logging concession

Subsidiary companies Nature of business:


Polima Compressed Wood Bintulu Sdn Bhd (Formerly known as Tanjong Manis Corporation Sdn Bhd)

Production of compression moulded pallet blocks and core plugs utilizing wood waste.

Houting Sdn Bhd Timber logging concession

Bintulu Adhesives & Chemicals Sdn Bhd Manufacturing and sale of glue and adhesives

Shin Yang Industries (Bintulu) Sdn Bhd Extraction and marketing of timbers

PUSAKA KTS Forests Plantation Sdn Bhd Palm oil plantation and reafforestation

Selah Timber Sdn Bhd Timber logging concession

Shin Yang Plywood (Bintulu) Sdn Bhd Manufacturing of decorative plywood and other wood related products

Associate companies Nature of business:

Other companies Nature of business:

Daiken Sarawak Sdn Bhd Production of medium density fiberboard (MDF)

Kuching Hotels Sdn Bhd Hotel and shopping complex

GOS Management Holding Sdn Bhd Investment holding

Kion Ling Timber-Based Industries Bhd Timber processing and trading

Sarawak Pulp Industries Sdn Bhd Palm oil plantation

Keresa Timber Corporation Sdn Bhd Extraction and sale of timber logs


STIDC ACTIVITIES IN 2007

Earth Breaking Ceremony of Sumber Alam Sanctuary

Visit to STIDC Furniture Making Complex, Kota Samarahan

Exchange of the e-permit agreement documents

International Seminar in Tokyo SMIDEX “Annual Show

Malaysian participants at the South East Asian Technical Workshop, KL

Malaysian delegates at the 14th Conference on CITES, the Hague, Netherlands

Asia - Pacific Tropical Fores

International Seminar on Utilisation

and Marketing Of Acacias

Visit byBatu


Briefing on Taiwan’s requirement for plywood

Raya Sale at STIDC Gallery Smart Partnership Programme between STIDC and Royal Custom Malaysia

wcase” STIDC vendors visit to EFE and MIFF 2007, Kuala Lumpur

st Investment Forum Groundbreaking Ceremony for the pro-posed Central Oil Distribution Terminal

(CODT)

Timber Selling Mission to India

y Timber Trade representatives to u Bungah longhouse in Mulu

Briefing by the speaker from BSMI, Taiwan


Sarawak Timber Industry Development Corporation

(Incorporated under the Sarawak State Ordinance No. 3 of 1973)

This page has been intentionally left blank



oard embers Officers and rofessional dvisors 1

Statement by Chairman and a oard ember

Statutory Declaration 3

uditors eport

alance Sheets

Income Statements

Consolidated Statement of Changes in uity 7

Statement of Changes in uity

Cash low Statements 9 1

Notes to the inancial Statements 11

Contents age

IN NCI ST T NTS 7

art II



This page has been intentionally left blank



oard embers Officers and rofessional dvisors

Chairman ehin Sri a i bdul Taib ahmudS S D S S SSD SS SSS S T S DD S D N T. . (Thailand) N (Indonesia)S ( runei) O ( orea) O ( ustralia) CD

oard embers Dato Sri a i wang Tengah li asanN S N

hg. Tan Sri Datuk mar a i u ang bin ohd. NorS D N S S S N D ( mas)

(until 1 ay 7)

hg. Dato Sri hmad Tarmi i bin a i SulaimanD S N S(appointed ay 7)

hg. Tan Sri Datuk mar a i bdul i bin Dato a i usainD N T C S

hg. Datu an lwi bin Dato Sri an ashimD S T N D( angsa)

Tuan a i ulaihi bin a i NarawiS

hg. Datu Cheong k ChoonD S

hg. rofessor Datuk Dr. usuf adiN D S

eneral anager hg. Datu a i en Talif SallehD S D ( )

ddress isma Sumber lam. O. o 19etra aya

937 uching

uditor uditor eneral alaysia

ankers alayan anking erhadCI ank erhad

ank erhad

NN O T 7 1



e IN S I I D T I IN D and D TO S I I N T NI S N being the Chairman and a oard ember of S TI IND ST

D O NT CO O TION do hereby state on behalf of the embers that in our opinionthe financial statements as set out on pages to are drawn up in accordance withapplicable rivate ntities eporting Standards in alaysia so as to give a true and fairview of the state of affairs of the roup and of the Corporation as at 31 December 7and of the results of their operations and the cash flows of the roup and of the Corporationfor the year ended on that date.

On behalf of the oard On behalf of the oard

IN S I I D T I D TO S I I N T N IIN D SS N

Chairman oard ember

uching alaysia uching alaysia

Date Date

Statement y Chairman nd oard ember

S TI IND ST D O NT CO O TION



Statutory Declaration

I D T I N T I S being the officer primarily responsible for the accountingrecords and financial management of S TI IND ST D O NTCO O TION do solemnly and sincerely declare that the financial statements as set outon pages to are to the best of my knowledge and belief correct and I make thissolemn declaration conscientiously believing the same to be true and by virtue of theprovisions of the Statutory Declarations ct 19 .

Subscribed and solemnly declared byD T I N T I Sat C IN in the State of Son this day of .....................................................

D T I N T I S

efore me

.....................................................S S

NN O T 7 3



Si il etua udit Negaraengenai enyata ewangan

erbadanan ema uan erusahaan ayu Sarawakagi Tahun erakhir 31 Disember 7



alance Sheetss at 31 December 7

Group CorporationNote 2007 2006 2007 2006

Non-current assets

roperty plant and e uipment 3 79 3 1 7 7 9 11 7 3 9 9Investment in subsidiaries 7 9 7Investment in associates 3 33 7 7 113 7 7 19 739Other investments 13 7 117 93 1 3 9 9 7 1 73

ro ect development e penditure 7 9 17 1 31 9 9 3 9 193 3roduct development costs 7 7ong term loan receivables 9 9 77 793

Deferred ta assets 3 9 7 3 39 77 1 9 3 1 77 7 1 19

Current Assets

Inventories 1 3 7 9 1 39 7 3 979 37 9Trade receivables 11 97 71 1 9 997 33 1Other receivables 1 3 3 9 319 3 7 3 3 9Cash and bank balances 13 3 7 1 3 3 7 3 7 9 97 9 3 3 717

1 7 91 93 9 3 333 39 3 1 399 9 1

Current Liabilities

Short term borrowings 1 7Trade payables 9 3 3 99 37 77Other payables 1 33 7 7 9 1 1 79Ta payable 9 1

1 379 771 3 91 9 7 9 1 1 79Net Current Assets 11 1 1 3 3 37 319 9 3 1 3 1 3

1 1 911 1 1 1 7 1 1 7 1 3 3 1

Financed by:

overnment s contribution 1 939 1 939 1 939 1 939Donated funds 17 3 3 9 3 3 9

evolving funds 1 93 71 9 93 71 9Capital reserve 13 13

etained profits 3 1 7 33 1 9 1 91 3 7 3Corporation accumulated funds 33 1 73 77 7 3 91 3 1 9 9 9 3

inority interests 91 99 7 91 93 7 1 1 3 3 1 9 9 9 3

overnment grants 19 1 7 1 7 1 7 1 7ong term borrowings 1 7 91 3 3 7 7 1 99 1 1

Deferred ta liabilities 3 7 1 39 3 7 9Non current liabilities 1 9 9 9 997 191 7 7 1 3

1 1 911 1 1 1 7 1 1 7 1 3 3 1

The accompanying notes form an integral part of the financial statements.

NN O T 7



Income Statementsor the ear nded 31 December 7

evenue 1 3 9 1 7 39 3 7 3 7 93Cost of sales (111 97 ) (1 1 9 ) ( 9 733)

ross profit 11 7 9 3 17 7 93dministrative and other

operating e penditure ( 13 39 ) ( 17 7 7) ( ) (37 9 79)rofit from operations 3 1 7 1 3 9 7 3 73 17 1 9 9inance costs ( 1 9 3 ) ( 3 9 3) (3 77 77) (3 71 39 )

Share of results of associates 1 3 1 31 1rofit before ta ation 9 7 971 13 31 9 9 7 3

Ta ation (11 1 71) (7 3 991) ( 73 ) ( 7 )Corporation and subsidiaries (9 3 9 ) ( 7 99) ( 73 ) ( 7 )

ssociates (1 79 9 1) ( 91 9 )rofit after ta ation 9 13 1 3 7 1 9 33 177 79inority interests ( 31 77 ) ( 9 3 7 3)

Net profit for the year 7 9 7 1 3 3 9 33 177 79


Group CorporationNote 2007 2006 2007 2006




Consolidated Statement of Changes in uityor the ear nded 31 December 7

At 1 January 2006 1 139 9 13 7 9 11 73 3eceived during the year 7 1 7 1pended during the year ( 1) ( 1)

Net profit for the year 3 3 3 3At 31 December 2006 1 939 9 71 9 13 1 9 77 7 3 91

eceived during the year 1 13 9 1 13 9pended during the year (13 ) (13 )

Net profit for the year 7 9 7 1 7 9 7 1At 31 December 2007 1 939 3 3 93 13 3 1 7 33 33 1 73


Government’s Donated Revolving Capital Retainedcontribution funds funds reserve profits Total

NN O T 7 7



Statement of Changes in uityor the ear nded 31 December 7

Government’s Donated Revolving Retainedcontribution funds funds profits Total

At 1 January 2006 1 139 9 7 7 3 7 31eceived during the year 7 1 7 1pended during the year ( 1) ( 1)

Net profit for the year 177 79 177 79At 31 December 2006 1 939 9 71 9 3 7 3 9 9 9 3

eceived during the year 1 13 9 1 13 9pended during the year (13 ) (13 )

Net profit for the year 9 33 9 33At 31 December 2007 1 939 3 3 93 1 91 3 1




Cash low Statementsor the ear nded 31 December 7

Group Corporation2007 2006 2007 2006

Cash Flows from Operating Activities

rofit before ta ation 9 7 971 13 31 9 9 7 3d ustments for

morti ation of product development costs 13 ad debts written off 9 11 31 Creditors written off (1 9) Doubtful debts recovered (1 31) rovision for doubtful debts 9 171 139 9 7 eversal of impairment losses on property plant and e uipment Impairment losses on investments 3 1 7 1 Inventories written off 191 17 Impairment losses on investments write back (3 7) Negative goodwill recognised ( 9) Depreciation of property plant and e uipment 1 7 33 19 73 739 7 1 3 9 3 9 ain on disposal dilution of subsidiaries ( 7 ) ( 7 ) ( ain) loss on disposal of property plant and e uipment (1 773 1) (1 971 ) 3 (33 33) ( ain) loss on disposal of other investments ( 933 ) ( 9 ) ( 7 19 ) 1 11 37 roperty plant and e uipment written off 3 3 3 Interest e pense 7 3 3 3 77 77 3 71 39 Interest income (1 3 31 ) (11 9 ) (9 99 ) (1 1 9 3) ross dividend ( 7 9 9) ( 7 ) (11 7 ) (9 91 7 ) Share of results in associates (1 3 ) (1 31 1)Operating profit (loss) before working capital changes 39 71 1 7 19 11 9 (3 1 3 9)

(Increase) decrease in inventories (3 ) 1 (1 13 73 )(Increase) decrease in receivables (13 1 7) (3 3 ) 9 3 3 93 7 7Increase (decrease) in payables 1 31 91 ( 1 ) 3 3 1 9 ( 7 3)Cash generated from (used in) operations 3 1 1 13 3 39 1 777 ( 7 9 )

Interest paid ( 7 ) ( 3 3) (3 77 77) (3 71 39 )Ta es paid (1 3 3 191) (13 3 ) (7 917 ) (7 917 )Ta es refunded 1 3 9 3 7 11Net cash generated from (used in) operating activities 3 99 7 713 (1 937 3)

NN O T 7 9

Documents

STIDC-Annual Report 07 - sarawaktimber.org.my · State Financial Secretary ... Assistant General Manager (Resource Development) ... • Human Resource Management • Human Resource