Brunei: Branching out

Brunei Darussalam’s reputation as a champion of environmental protection and natural resource management is proving a boon as the country enters the “value-added timber” market, meaning timber that is already processed into goods.

The Sultanate recently began exporting value-added timber products to South Korea such as windows and door frames. Though the exports are relatively small scale, Mahmud Yusof, the deputy director of the Forestry Department, says the experience has highlighted the benefits of the country’s environmental credentials.

“We are trying our level best to increase our contribution to GDP,” Yusof told the Brunei Times on October 10 in reference to the exports. He added that South Korea did not ask for any certification for the products as was aware of Brunei’s strict laws on forest conservation and illegal logging.

All timber felled and milled in Brunei is fully compliant with international regulations and standards on conserving native forests, a factor that will work in the Sultanate’s favour as it seeks new markets such as Europe that are sensitive over the issue of illegally sourced lumber.

“We are very clean on this issue. That is why our products sometimes can penetrate into other markets,” said Mahmud. “We are trying to test our image now and whether we are accepted in the international market.”

As the result of a long-held policy of locking up the vast majority of the country’s natural forests, some 75% of native woodlands are protected from commercial development, making Brunei among the top 10 forested nations in the world.

This also means that there are only limited resources for exploitation, with careful management and replanting used to sustain the local timber sector and imports bridging the gap.

Under the Forestry Department's Reduced Cut Policy (RCP), introduced in 1990, the logging industry has been limited to harvesting 100,000 cu metres of timber a year. This ceiling has been reinforced by a moratorium on the approval of new logging concessions, with the country's 24 sawmills only allowed to process wood taken from strictly defined areas within a 15 km radius of their location.

To preserve the industry, while at the same time conserving Brunei's forests, the government has encouraged both mill owners and furniture manufacturers to import raw or semi-processed wood, mainly from Sarawak, to meet local demand and for re-export after processing. It has also initiated a programme of replanting logged areas to provide long-term access to raw materials.

While this has kept Brunei’s forests intact, likely benefiting the lucrative eco-tourism market, at the same time neighboring Malaysia’s value-added timber market is progressing at pace. Across the border the government predicts value-added timber to represent 60% of total timber exports by 2020, a sector which contributes around 4.5% to Malaysia’s total GDP annually.

Though Brunei needs to limit the wood it uses for exports, it also needs to exercise caution in importing lumber since in some countries the controls are not so rigidly enforced.

It is not just the Forestry Department that is looking to branching out into the overseas market. The Brunei Economic Development Board (BEDB) is also targeting value added activity as the way forward for the country’s industries, according to Dr Abd Manaf Hj Metussin, deputy chief executive officer and head of the Local Business Development Division.

Describing the Brunei-Indonesia-Malaysia-Philippines East Asean Growth Area (BIMP EAGA) as an untapped market for Brunei, Manaf told local media on October 2 that as many of the countries in the area were heavily involved in primary production and agriculture, there was the potential to utilize these resources to add value to the production process.

“We are in a very favourable position to help the region and make sure that whatever opportunities available we will be able to benefit from ourselves,” he said.