Economics of rubber forest plantation

Mohd Johari Hassan, . (2005) Economics of rubber forest plantation. [Proceedings Paper]

In view of the encouraging growth of the downstream rubber wood product manufacturing sub-sector amidst trends that indicate shortage of rubber wood log supply the government today encourages the establishment of rubber forest plantation. Records indicate an annual contraction in area alienated to rubber as growers shift to other crops or activities that promise quicker and better returns. The establishment of rubber forest plantation will supplement raw material supply from traditional rubber smallholdings. The dual return from the rubber tree latex and wood makes this species unique and attractive. Among factors favouring this species are its established market encouraging international demand and its strong RandD and technical back-up. The species with use of timber latex clones allows for flexibility of latex extraction which apart from increasing returns on investment also reduces the long gesttaion period associated with forest plantation. This study indicated that both options- rubber forest plantation for timber extraction and that for both timber and latex extraction are viable. The latter with the added revenue from latex provides better returns. While total capital and operating costs of the option involving tapping entails significantly higher expenditure the required initial investment capital of this option is lower as funds would be self-generating once latex is extracted. Where bottom-line is concerned the attractiveness of each option ultimately depends on the relative prices could be sustained obviously the option involving latex extraction is more attractive. Investment in rubber forest plantation just for timber however has the advantage that this alternatives require significantly less labour - a scare resource today especially that of especially that of tapping and collection labour. in the absence of tapping management is also simpler and total capital and operating costs are much lower. To maximize return investors should integrate downstream into wood processing or further down into wood product manufacturing. The government has provided several incentives to encourage forest plantation among recent fiscal incentice considered attractive is that of Group Relief . This is to a considerable extent could reduce if not circumvent the cash-flow problem associated with investments involving long gestation. A special fund for forest plantation has also been created as an added incentive to encourage in such ventures. Private investors especially those involved in the rubber wood product trade must come forward to take advantage of the latest offers by the government to ensure that their long term interests are not jeopardized. At the same time state government as owners of the land must play their role in supporting the governments vision of making Malaysia fully dependant on sustainable forest plantation for its wood to relief pressure on the natural forest.

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Abstract

In view of the encouraging growth of the downstream rubber wood product manufacturing sub-sector amidst trends that indicate shortage of rubber wood log supply the government today encourages the establishment of rubber forest plantation. Records indicate an annual contraction in area alienated to rubber as growers shift to other crops or activities that promise quicker and better returns. The establishment of rubber forest plantation will supplement raw material supply from traditional rubber smallholdings. The dual return from the rubber tree latex and wood makes this species unique and attractive. Among factors favouring this species are its established market encouraging international demand and its strong RandD and technical back-up. The species with use of timber latex clones allows for flexibility of latex extraction which apart from increasing returns on investment also reduces the long gesttaion period associated with forest plantation. This study indicated that both options- rubber forest plantation for timber extraction and that for both timber and latex extraction are viable. The latter with the added revenue from latex provides better returns. While total capital and operating costs of the option involving tapping entails significantly higher expenditure the required initial investment capital of this option is lower as funds would be self-generating once latex is extracted. Where bottom-line is concerned the attractiveness of each option ultimately depends on the relative prices could be sustained obviously the option involving latex extraction is more attractive. Investment in rubber forest plantation just for timber however has the advantage that this alternatives require significantly less labour - a scare resource today especially that of especially that of tapping and collection labour. in the absence of tapping management is also simpler and total capital and operating costs are much lower. To maximize return investors should integrate downstream into wood processing or further down into wood product manufacturing. The government has provided several incentives to encourage forest plantation among recent fiscal incentice considered attractive is that of Group Relief . This is to a considerable extent could reduce if not circumvent the cash-flow problem associated with investments involving long gestation. A special fund for forest plantation has also been created as an added incentive to encourage in such ventures. Private investors especially those involved in the rubber wood product trade must come forward to take advantage of the latest offers by the government to ensure that their long term interests are not jeopardized. At the same time state government as owners of the land must play their role in supporting the governments vision of making Malaysia fully dependant on sustainable forest plantation for its wood to relief pressure on the natural forest.

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Item Type:	Proceedings Paper
Additional Information:	5 table.
AGROVOC Term:	RUBBER
AGROVOC Term:	RUBBER INDUSTRY
AGROVOC Term:	LATEX
AGROVOC Term:	EXTRACTION
AGROVOC Term:	PLANTATIONS
AGROVOC Term:	HEVEA
AGROVOC Term:	WOOD
AGROVOC Term:	MALAYSIA
Geographical Term:	MALAYSIA
Depositing User:	Ms. Norfaezah Khomsan
Last Modified:	24 Apr 2025 05:28
URI:	http://webagris.upm.edu.my/id/eprint/17004

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