Since early 1980s, Malaysia’s manufacturing industry has been recording tremendous growth. It contributes almost 80 percent of the overall country’s export and Malaysia’s manufacturing industry is the 17th largest in the world. Amongst manufacturing industries, electricity generation is the most energy intensive sector. On the other hand, for the low energy and low carbon emission category, the furniture sector ranked the highest for energy intensity.
The Malaysian government is committed to maintain, preserve and enhance its manufacturing sector through various initiatives. However, direct and indirect energy consumption contributes to carbon dioxide (CO2) emission that harms the environment. In 2013, total amount of CO2 emissions from manufacturing industries was 53 million metric tonnes or 20 percent of total CO2 emission in Malaysia.
As the manufacturing industry in Malaysia grows, the government has to ensure its trading policies and regulations are followed in addition to ensuring sustainability and safety of the environment. Therefore, the Malaysian government is committed to reduce carbon emission up to 40 percent by the year 2020, compared to the carbon emission level recorded in 2005.
For that reason, Malaysia needs to move to a greener economy, which implies meeting development and environmental sustainability, which will take into consideration not only economic but also environmental criteria. With that in mind, the concept of ‘greening’ is currently gaining popularity among scientific research community and government’s policy making.
Green technology or clean technology is the use of any technology related to environmental science, green chemistry, environmental monitoring and electronic devices to conserve the natural environment and resources, reducing climate changes as a result.
In Malaysia, the National Green Technology Policy, introduced in 2009, defines green technology as the development and application of products, equipment and systems used to conserve the natural environment and resources, which minimises the negative impact of human activities.
Towards Sustainable Manufacturing
Promoting green technology and practices in industries is important as it leads to sustainability and helps to conserve the environment. Many businesses and other organisations realised the importance of sustainability to remain competitive in the global market.
Additionally, sustainable awareness reduces organisation’s climate risk, dependence on limited resources as well as improving relationship with stakeholders, investors, customers and employees. Currently, in order to upscale environmental efforts, Malaysia emphasises on imposing and scheming the environmental load during the manufacture of products.
Manufacturing sectors that incorporate green technology and practices in their production enable them to meet sustainable environmental requirements in the future. The Malaysian furniture industry is known to be innovative and efficient to ensure that it remains competitive and meets global demand. The industry has successfully transformed into an internationally recognised multi-billion industry.
In 2013, Malaysia was the eighth largest furniture exporter in the world and ranked third in Asia with the products exported to more than 180 countries around the world. The success of Malaysia’s furniture industry has always been associated with the abundance of natural resources—rubberwood.
Realising this, the Malaysian government has set an annual growth rate of 6.5 percent for the furniture industry. This growth percentage will eventually allow the industry to achieve an export value of RM53 billion (US$14.93 billion) by the year 2020 as outlined in the National Timber Industry Policy.
Economic downturn proves to be challenging to the industry. However, it has remained competitive due to strong global demand for wood-based furniture. Business-friendly environment also contributed to the success of the industry as the government provides tax exemption (pioneer status companies) and investment tax allowance. Coupled with good quality products and demand, the Malaysian furniture industry continues its growth internationally.
The Malaysian furniture industry is taking initiatives to enhance productivity besides addressing the needs to ‘green’ the manufacturing process. This is an important step to develop its image globally and to portray Malaysian-made furniture as being sustainable. The Malaysian Furniture Industry Council (MFIC) has been promoting this agenda with majority of its members currently using rubberwood as raw materials for furniture production.
Furniture manufacturing companies can practice and apply green technology in their facilities and manufacturing processes. This includes projects that involve solar panels for energy generation, green building and water and waste management. Producting clean power or steam supply through recovery of heat generated during manufacturing processes proves to be beneficial and promote energy efficiency.
Based on that, the Malaysian Furniture Promotion Council (MFPC) has highlighted three main criteria used to define green Malaysian furniture:
Materials from sustainable sources
Wood and fabric used in furniture manufacturing must be from sustainable sources. Timber must be obtained from forest areas certified under sustainable forest management (SFM) or from forest plantations. Additionally, the use of palm wood from oil palm tree and rubber wood is encouraged as they would otherwise be burnt or deposited in landfill which may cause air pollution.
Waste minimisation can be achieved through good design, finishing and quality. It can also be achieved through compliance with environmental regulations and requirements. The use of water-based stains and glues, recycled carton boxes and biodegradable plastic bags promotes better use of resources.
Conformance with health and safety standards
Pre- and post-treatment of timbers and the use of chemicals (for protection purposes or to increase the dimensional stability of wood-based products) should conform to health and safety regulations and requirements.
Current Green Activities
The decrease of forest resource supply encouraged wood-based product manufacturers to explore potential resources to ensure continuous supply of raw materials. A total of 80 percent of the furniture manufactured in Malaysia is made of rubberwood. The Malaysian government has allocated RM1.08 billion in the 2013 national budget for the replanting of unproductive oil palm and rubber tress to ensure sufficient raw material supply for the furniture industry.
In addition to addressing sustainable and green manufacturing, issues on waste management are equality vital and have been highlighted in the National Green Technology Policy. Minimising waste generated during furniture manufacturing is important as the volume and wastage rate of particular raw materials act as an indicator of waste problems that need to be addressed. This can then be overcome by improving the processes and adopting green technologies and practices. Like other industrial processes, furniture manufacturing also generates significant amount of waste from wood processing, panel production, wood preservation and from the use of paints and varnishes.
The use of alternative raw materials other than timber for furniture production such as agricultural waste which includes rice husks, coconut trunks, oil palm biomass, kenaf and sawdust to produce composite boards and furniture parts has heightened among furniture industry players. In 2012, an investment of RM339.3 million was recorded in this sub-sector.
To enhance the utilisation of waste, furniture manufacturing industries in Malaysia has been producing engineered wood products using agricultural waste. Natural fibre materials from agricultural waste, such as oil palm biomass, coconut trunk fibres and rice husks, are often used for the production of briquettes, particleboards and fibreboards, which are used in the manufacture of furniture.
The use of palm wood as an alternative source of furniture manufacture is gaining popularity. Furniture manufacturers are currently experimenting the use of palm wood as side panels and for the surface of tables, chairs and cabinets. The use of palm wood prevents conventional wood obtained from forest trees from being felled as source of timber. Besides that, oil palm fruit bunches are also known as an alternative to produce value-added products such as particleboards and flatboards due to their physical properties.
The use of palm wood poses challenges as there is insufficient technical knowledge of the characteristics and application of the wood. Furniture manufacturers must also deal with the softness of the palm wood due to the loosely bound nature of oil palm trunk fibres and the long kiln drying process.
Apart from that, the Forest Research Institute Malaysia (FRIM) has developed, produced and patented a green technology for drying rubberwood using a high temperature drying system. This excludes the need for chemicals used on the rubberwood prior to drying. Furthermore, the technology enhances the stability of the rubberwood after drying and is able to reduce processing time by more than 75 percent.
This technology is one of the solutions to Malaysia’s furniture manufacturers and sawn timber industry over the stringent regulations and requirements for exporting eco-friendly products, imposed by developed countries on the use of borates as a wood treatment chemical for rubberwood.
Promoting Green Technology
The Malaysian government recognised green technology as the driver for economic growth. It provides vast opportunities and potentials in terms of economic generation, technology innovation and wealth creation. Green technology has vast applications across different sectors such as energy production, manufacturing, services and transportation. Application of green technology can create opportunities for economic growth by contributing to fiscal consolidation, enhancing productivity achieved through efficient use of natural resources, and creating new markets for green goods and services.
Providing conducive environment for green technology development has been highlighted as one of the main trust in the National Green Technology Policy. The introduction and implementation of economic instruments with the support of monetary and fiscal measures are essential to heighten green technology development in Malaysia.
Various incentives are made available to targeted industry players to intensify potential producers and users of green technology. This includes eligible companies for activities related to green technology in furniture manufacturing such as utilisation of renewable energy, energy conservation/energy efficiency, reduction of greenhouse gas emission, import and purchase of machinery components, waste recycling, environmental protection storages, and treatment and disposal of toxic/hazardous waste.
Financial and incentive supports are offered in terms of soft loans, pioneer status, tax and import duty exemptions, which are managed by agencies such as the Malaysia Investment Development Authority (MIDA) and Malaysian Green Technology Corporation. The former is the principle agency that focuses on the promotion of manufacturing and service sectors in the country.
The agency provides various incentives for green technology development:
•Green technology financing scheme
The scheme offers 60 percent guarantee of the financing amount and a rebate of two percent on the interest/profit rate charged by the financial institution. Its purpose is to facilitate the growth of local green businesses.
•Storage, treatment and disposal of toxic and hazardous wastes
The incentive encourages the setting up of proper facilities to store, treat and dispose toxic and hazardous waste. Companies that are directly involved in these activities in an integrated manner qualify for pioneer status in which they can enjoy income tax exemption of 70 percent of the statutory income for a period of five years.
•Waste recycling activities
This incentive encourages waste recycling activities within the company. It includes the recycling of agricultural wastes or agricultural by-products, recycling of chemicals and the production of reconstituted wood-based panel boards or products. The incentives for pioneer status include income tax exemption of 70 percent of the statutory income for a period of five years.
•Generation of renewable energy for own consumption
Companies which generate energy from renewable resources for its own consumption are eligible for the Investment Tax Allowance of 100 percent on qualifying capital expenditure incurred within a period of five years.
Environmental related issues are becoming more prevalent among the public and many have now realised the need and importance of its protection, conservation and care. Furthermore, industries and companies have already started to act on the green measures with the aim to incorporate green practices in their manufacturing processes and to create sustainable products.
With government efforts and initiatives, the Malaysian furniture industry has taken steps for better, cleaner and ‘greener’ manufacturing processes that can further developed to ensure its competitiveness in the global market.