Timber tender to feed domestic sawmills

Thoundsands of tonnes of timber will become available in Yangon and Mandalay Region as the government announced a large tender to process and export the already felled logs.

The tender comes as Myanmar instituted rules on April 1 banning the export of unprocessed timber in a bid to develop a local sawmill industry.

International importers such as the EU and US have been easing up sanctions, but it is still difficult to receive the required timber certificates to ship to the Western markets legally, said U Myo Lwin, central executive committee member of the Myanmar Timber Merchants Association.

“I hope private sector exports will go up this year, if we can overcome the challenges,” he said.

Myanmar exported about 3 million tonnes of wood worth US$1 billion in the 2013–14 fiscal year, mostly to China, Thailand and India. Exports have traditionally been dominated by state–owned firms, though illegal small–scale traders also play a role.

However, official exports have plunged to $16 million so far this fiscal year, after the government banned raw timber exports on April 1. The large decline in figures is not thought to represent an actual decline in timber exports, but rather means some exports are being conducted informally due to not complying with the raw timber export ban.

U Myo Lwin said it will be difficult to stop smuggling, which may keep going despite the ban.

“The impact might be that it is hard to collect quality raw timber,” he said.

State–owned but independent corporation Myanma Timber Enterprise (MTE) announced it will begin tenders on August 20 for 10,000 tonnes of felled logs currently located in Yangon and Mandalay Regions. Teak makes up about 500 tonnes of the total tenders.

Some of the wood has been confiscated from would–be exporters, but most has been harvested by government firms.

Companies interested in processing the wood for the domestic or foreign markets have been invited to take part in the tender.

MTE manager U Soe Ye said the 10,000 tonnes will be sold in different sized blocks for different purposes. However, all winners must process the wood inside Myanmar in keeping with the law.

Myanmar is making an effort to build a domestic sawmill industry, as tax rates have been reduced and policy changes require local manufacturing, he said. The commercial tax on teak, hardwood logs and fragments applied on buying has been halved to 25pc for 2014–15, from its previous 50pc.

U Soe Ye also downplayed concerns there are not enough enough manufacturers to handle Myanmar timber, adding there about 1500 timber manufacturers registered with the Myanmar Timber Merchants Association, and more still unregistered.

Ministry of Commerce director U Win Myint said preservation has not always been a focus for the Myanmar timber industry. Conflicts in some areas near the border with Thailand have preserved forests.

“Nobody dared to go there to cut trees,” he said. “If not, they’d all be gone already.”

Several large firms including Htoo Group, Myanmar Economic Holdings Limited and IGE are licensed to cut timber, though other firms proceed illegally.

Timber smuggling is thought to be strongest on the borders to Thailand and China.


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