Posted on November 4, 2011, FridayKUALA LUMPUR:
Lingui had a gross area of 721,000 hectares (over 1,780,870 acres) of forest concession in Sarawak and about 35,000 hectares of forest plantation in New Zealand.
“We are focusing on logging here (Sarawak), because the maturity period for the trees in Malaysia is shorter, which is only 10 years compared with our forest plantation in New Zealand, which takes 27 years to mature,” said group managing director Yaw Chee Ming at a press conference after the company’s annual general meeting (AGM) here yesterday.
“So far we have planted about 30,000 hectares and we target to plant between 10,000 and 15,000 hectares, in order to increase our production,” he said.
Log trading is Lingui’s major business segment accounting for about 34 per cent of the group’s total revenue for the year ended June 30, 2011.
China and India were the biggest export markets for the period, consuming 36 per cent and 24 per cent, respectively, of Lingui’s log production.
China’s demand for both hardwood and softwood logs remained steady fuelled by its buoyant economic growth and continued expansion in the housing and infrastructure sector.
India’s demand for imported hardwood species remained robust driven by a construction boom to meet demand for housing in urban areas.
Meanwhile, Yaw, in a statement issued after the AGM said both the group’s hardwood and softwood log export prices were 18 per cent and 20 per cent higher than the preceding financial year, with notable sharp price and gross profit margin run-ups noted during the fourth quarter in response to the Japanese earthquake in March.
Moving forward, the company remained cautious as demand for timber normalised and consolidation was expected to take place among industry players.
“There is overstocking of plywood in Japan with the initial spike in plywood imports with no major reconstruction activities taking place,” said Lingui.
Hence, the group’s performance would largely depend on the recovery in Japan through its post-earthquake reconstruction activities and continued stable demand for logs from China and India, said Yaw.
“We believe when Japan’s rebuilding efforts intensifies it will require substantial volume of timber and that would drive demand and prices for both logs and plywood,” he added.