Malaysia is coming up with a “constructed” price for plywood in the wake of its manufacturers being penalised by South Korean authorities on charges of dumping their panel products.

This proposed price is being worked out by the International Trade and Industry Ministry, together with input from the Sarawak Timber Industry Development Corp (STIDC) and plywood manufacturers.

“As most of the manufactured plywood is for the export market, there is at present no domestic selling price,” Sarawak Timber Association (STA) general manager Dr Peter Kho told StarBizWeek.

The proposed constructed price will be determined based on several factors including the production and transport costs of plywood and will serve as a guide to plywood exporters to check against any dumping charges.

To recap, the Korean Trade Commission (KTC) imposed anti-dumping duties on the imports of Malaysian plywood last March, ranging from 5% to 38% for three years.

Possible solution: Setting the domestic selling price for plywood will hopefully end South Korean charges of dumping.

The imposition of the duties followed KTC's probe into complaints by the Korean Wood Panel Association that nine Malaysian plywood exporters eight from Sarawak and one from Sabah were allegedly selling their products below production costs, thereby hurting many South Korean plywood manufacturers.

The anti-dumping duties imposed on the eight Sarawak plywood suppliers are between 5.12% and 9.75%. The suppliers include Subur Tiasa Plywood Sdn Bhd (5.12%), Jaya Tiasa Timber Products and Hwa Seng Veneer and Plywood Industry Sdn Bhd (6.43%), Shin Yang Plywood Sdn Bhd, Forescom Plywood Bhd, Menawan Wood Sdn Bhd, Shin Yang Plywood Bintulu Sdn Bhd and Zedtee Plywood Sdn Bhd (the five companies are owned by Shin Yang group) (9.75%).

The duties on Sabah-based Sinora Sdn Bhd is the highest at 38.1% while it is 8.76% on all other Malaysian exporters.

The anti-dumping duties on some of the Sarawak suppliers were significantly reduced following their appeals.

The duties have adversely affected exports of Sarawak plywood to South Korea, a traditional key market.

STA figures show that exports plunged to 39,143 cu m, worth RM55.8mil, in the April-June period last year. This is compared with exports of 91,529 cu m valued at RM106.7mil in the January-March period.

In 2010, Sarawak exported more than 530,000 cu m of panel products worth RM570mil to South Korea.

South Korean importers were reported to have turned to Vietnam and China where cheaper products of lower quality were available.

To restore the relationship, Sarawak Second Minister for Resource Planning and Management Datuk Amar Awang Tengah Ali Hasan led a high-powered timber selling mission to Seoul last month.

During the visit, the STA signed memorandums of understanding with the Korea Lumber Industry Cooperative, Korea Timber-Plywood Confederation and Korea Wood Association to forge closer trade links.

The tie-up involves regular exchange of market information, including changes to government policies on timber trade. Follow-up meetings are expected.

Kho said South Korea's anti-dumping duties on Malaysian plywood were subject to review later this month.

Source: BIZ THE STAR

Posted and edited by Riona, Hanbao News Department

Contact: rionach@cltimber.com