Home MMBIZ News CIL Sets up Myanmar Factory as Gov’t Bans Raw Timber Exports

CIL Sets up Myanmar Factory as Gov’t Bans Raw Timber Exports

Singapore-based wood processing firm Concorde Industries Ltd (CIL) has launched its saw milling facility in Yangon last week, the company said.

The move comes as Myanmar authorities suspended unprocessed log export starting last Tuesday to protect the country’s rapidly decaying forest reserves and biodiversity, mainly due to rampant illegal logging.

Philippe Maudet, general manager of CIL, said this move from being an FOB player in the teak logs trade flow to investing in processing facilities in Myanmar “would enable CIL to better service the growing demand for traceable and certified lumber in the developed economies.”

The finished wood factory will process about 10,000 tonnes of wood annually, said CIL, which was established as a 100 percent foreign-invested company. The company has employed over 200 staff members and will export its products to the European countries, it said.

“Investing in finished woods factory gives Myanmar a chance to export,” Maudet said. The saw mill investment is a step in the implementation of the company’s strategy to participate with Myanma Timber Enterprise and Myanmar government in promoting growth and development of Myanmar’s certified lumber sector, he said.

Maudet said CIL would be working closely with the Ministry of Environmental Conservation And Forests (MOECAF) on receiving recommendations from international timber organisations after a group of experts including forestry management officials is formed.

At the commissioning of the saw milling facility, U Win Tun, union minister for environmental conservation and forests, said Myanmar wants to establish more timber factories.

License validity for saw mill and plywood as well as for wood-based mills has been extended from one year to five years since 2013, according to the ministry.

“The government encourages wood-based industries because it plans to stop the export of big timber logs,” Than Swe, advisor to CIL, told state-run media.

Government officials said this is a good development for wood-based industries entrepreneurs as Myanmar’s export of value-added products would bring about higher income, technical transfer and more employment opportunities.

Meanwhile, the government stopped exports of raw logs last week in a bid to ensure sustainable utilisation of forest reserves and enhance environmental conservation and the country’s biodiversity, MOECAF officials said.

Exporting only finished or semi-finished wood products helps upgrade production technology and bring business opportunities for the local people, they said.

According to official statistics, Myanmar exported 485,600 cubic tonnes of teak log and 724,200 cubic tons of hardwood log in 2012-13, earning $327.5 million and $209.8 million respectively.

Suspension of log export would reduce teak and timber production compared with the past, U Tin Tun, director general of the ministry, told Xinhua news agency.

In this fiscal year 2014-15, only 60,000 cubic tonnes of teak and 67,000 cubic tonnes of timber are expected to be produced, down from about 200,000 cubic tonnes of teak and 1.2 million cubic tonnes of timber annually in the past several fiscal years up to 2012-13, he said.

He said Myanmar’s forest coverage reached 57 percent of the country’s total area between 1980 and 1990, but dropped to 47 percent recently.

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