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  • Writer's pictureBait Al-Amanah

Pioneering IR4: Revolutionizing Malaysia's Timber Industry

Executive Summary

The Malaysian timber industry has encountered persistent challenges, including labour shortages, low productivity, and market fluctuations. Despite these obstacles, recent years have witnessed remarkable growth in timber exports, with figures reaching RM 22.74 billion in 2021, and a promising projection to reach RM 28 billion by 2025. This growth can be primarily attributed to the National Timber Industry Policy, which has significantly expanded the certification of timber products. Nevertheless, the industry remains vulnerable to competition from global timber technologies such as Cross Laminated Timber (CLT).

The advent of Industry Revolution 4.0 (IR4) offers an unprecedented opportunity for transformation. IR4 introduces "smart" and interconnected production systems through its ten key pillars, encompassing big data, automation, simulation, system integration, IoT, cybersecurity, cloud computing, additive manufacturing, augmented reality, and blockchain. IoT automation and data integration, along with the utilization of blockchain technology, can effectively combat illegal logging. Incentives like tax breaks and grants encourage investment in cutting-edge technologies and adherence to ISO standards. A strict stance against illegal logging can further incentivize innovation.

The dissemination of knowledge and education is paramount in conveying the long-term benefits of IR4, with the Malaysian Timber Council facilitating this process through seminars and connecting firms with technology suppliers. Embracing IR4 is not only pivotal but imperative for Malaysia's timber industry to sustain its competitiveness. It necessitates comprehensive investment in technology and the adoption of sustainable practices, with both government and corporate sectors collaborating to ensure the industry's future prosperity

Key takeaways

1. Current State of Malaysian Timber Industry:

   - Malaysia's timber industry is a significant economic strength, ranking as the third-largest commodity industry.

   - Historical fluctuations in the industry attributed to factors such as labor shortages, low productivity rates, and production increases.

2. Recent Improvements and Projections:

   - Positive trends in the past two years, with Malaysian timber export market reaching RM 22.74 billion in 2021 and RM 25.21 billion in 2022.

   - Predictions estimate the industry reaching RM 28 billion by 2025.

3. Challenges Faced:

 - Labor-intensive practices and lack of innovation pose challenges, especially in comparison to global advancements like Cross Laminated Technology (CLT).

4. Introduction to Industrial Revolution 4.0 (IR4):

   - Overview of IR4 as a transformative technology for the timber industry.

   - Nine (10 with blockchain) pillars of IR4 identified, including big data, automated robots, simulation, and system integration.

5. Government Initiatives and Support:

   - Suggestions for government support, including tax breaks and grants for technological investments.

   - Emphasis on heavy enforcement against illegal logging and the implementation of an ID system for logs.

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