30 June 2011, MASKAYU news - In order to encourage more participation in forest plantation, the Ministry of Plantation Industries and Commodities has divided the Forest Plantation Development Programme into three categories beginning this year. Three categories are the large scale Forest Plantation Development scheme involving 2,500 ha and above, the medium scale scheme involving 41 to 2,499 ha and the small scale scheme involving 4 to 40 ha.
YB Tan Sri Bernard Dompok, Minister of Plantation Industries and Commodities handed over Forest Plantation Development Scheme loan agreements to 18 new borrowers in Kota Kinabalu, Sabah on 29 June. In his speech, he said that his Ministry has been mandated to implement the Commercial Forest Plantation Development programme by providing soft loans to borrowers. The loans are channelled through Forest Plantation Development Sdn. Bhd. (FPDSB) a special purpose vehicle wholly-owned by MTIB. Through the programme, a total of 25,000 ha of forest plantations will be developed each year with a targeted production of 5 million m3 of logs per year for the local industry.
According to Tan Sri Bernard by the year 2020, the government targets to have established 375,000 ha of forest plantations in Malaysia with a total production of 75 million m3 of logs annually. To finance the establishment of commercial forest plantations, the government has approved funds for soft loans amounting to RM1.045 billion in 2006. He added that the soft loans would allow local investors to establish commercial forest plantations and encourage government subsidiary companies to be involved in forest plantations projects. The borrowers would be charged an interest rate of as low as 3% per annum with repayment commencing at Year 16, when the trees can be harvested. The payment period will be five years.
Tan Sri Bernard also said that currently eight species have been identified for the large and medium scale Forest Plantation Development schemes. The species are Rubber, Acacia, African Mahogany, Teak, Sentang, Kelempanyan/Laran, Batai and Binuang. The selection of these species was based on their rapid growth rate over a harvesting period of 15 years. However, for the small scale scheme, only rubber is permitted and it has to be planted with an agroforestry approach. The government also plans to include other species in the future. Efforts to identify the appropriate species were conducted by the Technical Committee on Forest Plantation comprising the Forest Research Institute Malaysia, Malaysian Rubber Board, Forest Department Peninsular Malaysia, Sabah and Sarawak, Sabah Rubber Industry Board and Sabah Forestry Development Authority. Based on its growth speed, disease free status and commercial value, the committee is reviewing the suitability of Karas (Aquilaria) and bamboo as forest plantation species.
To date MTIB has approved 46 agreements with a total loan of RM617,448,800 for 106,650 ha of forest plantation. Thirty-seven percent of the companies involved are from Peninsular Malaysia, 24% from Sabah and 38% from Sarawak. It is expected that the first harvest of the forest plantations under this programme will be available in the year 2020 for the loans approved in year 2007.
Also present at the event were Datuk Madius Tangau, MTIB Chairman and Dr. Jalaluddin Harun, MTIB Director-General.
