The Future of the Wood Manufacturing Industry in Malaysia

Oct 22, 2019 1 Min Read

Industry 4.0 is a buzzword that we hear across industries at leaders’ gatherings, seminars and conferences – and for very good reason.

Artificial intelligence (AI) is being utilised to incorporate automation in banking, retail, and government, to name just a few sectors making use of new technology.

In manufacturing – such as within the wood industry – AI is showing itself to offer several benefits such as enhancing production, providing new opportunities for product exploration, and bringing human and machine learning together to better serve customer needs.

Before we explore AI further, many readers might wonder about the importance of the wood industry within Malaysia. Granted, it’s an area most of us are unfamiliar with, but we all benefit from this traditional industry in a lot of ways.

The wood industry makes use of an important natural and renewable resource. It’s used to build houses, create furniture, fence posts and fabrics; and, if you read newspapers and magazines and use notebooks, it’s all down to the committed people who work in wood manufacturing.

One dedicated leader within the industry is Peter Fitch, who heads the team at Segamat Panel Boards (SPB) and has done so for the past 16 years. The company, which was founded in 2003, places a strong focus on innovation and sustainability, sourcing their raw materials only from sustainable sources and – in the case of their clever use of oil palm trunks – what most people would consider ‘waste’.

You may be interested in: Malaysia’s Timber Dilemma

Filling the labour gap

As a business that constantly strives to maintain and build upon best practices, SPB has enjoyed award-winning successes in recent years despite facing industry challenges that have demanded a strong, innovative response from Fitch and his team.

One such challenge is reconciling the labour-intensive industry with a shortage in labour, which has led SPB and others to concentrate on alternative solutions, including investment in technology.

On the surface, AI and the wood industry might appear unlikely bedfellows, but Fitch believes that it will have a pivotal role to play in the growth of wood manufacturing.

He says: “It will happen, so it’s not a matter of if it will happen, it’s a matter of when it will happen – and when it does happen, it will be a complete game-changing and disruptive process.”

The need to incorporate AI into the manufacturing industry is an innovation born of necessity. As in European countries such as Germany, Malaysia is growing as a nation of educated, high-skilled talent, which leads people to be less inclined towards learning and working within industries such as wood manufacturing.

As a result, there is a degree of reliance on foreign workers who are brought into the country to fill roles across industries that would otherwise be lacking manpower.

Although automation will help to close the labour gap, Fitch believes that balancing the investment in people and machinery is necessary to maintain the health of the industry.

He says: “You don’t just have to reinvest in the machinery, and the capital for the machinery, but you also need to reinvest in the human capital, which is the skill level of the people. This is going to be a huge challenge.

“We’re already facing that challenge as well. We’re trying to introduce automation and AI where we can, but we also need people to be able to maintain and operate the technology.”

Read this: Paving the Way for a Sustainable Business

Taking things to the next level

Discussing automation within wood manufacturing as a whole, Fitch shared that while frontline manufacturing is a straightforward process, the driver of automation through AI for the industry will come via the furniture manufacturing.

Certainly, the signs of AI adoption point to a future where companies like SPB become more empowered as human ingenuity is coupled with automated processes and machine learning.

Not only can automation reduce operation costs for businesses, it can also enhance potential for scalability and product development, which will no doubt develop to meet the needs of expanding consumer demands.

Citing IKEA as a company that has integrated AI into how it sells furniture, Fitch believes that the adoption of automation will permeate the sector as it becomes more commonplace.

He says: “You’re seeing companies like IKEA, which is really revolutionising the way that furniture is being sold. There’s probably going to be a lot more standardisation of the products. There will be individual design – like printed design, not necessarily actual design of furniture – and so it could be more modular. And that will lead to automation, easier automation.

“So I think the revolution that’s going on in the retail sector – the need to sell large volumes through the Internet, delivered to you by the courier companies – will drive change in the way that furniture is manufactured, and that will lead to more automation.”

According to the Malaysian Investment Development Authority (MIDA), Malaysia exported RM23.2bil worth of wood and wood products in 2017 – a figure that’s expected to hit the RM53bil mark by 2020.

With the challenges faced by the wood manufacturing industry, and the potential offered through investment in automated processes coupled with the innovative leadership of companies such as SPB, Malaysia could be looking at a bright and prosperous future.

If the country can take advantage of its abundance of natural resources and combine that with proactive leadership that utilises new technology and the talent of its people, the wood manufacturing industry will no doubt continue to thrive and flourish in this new era for business.


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This article is published by the editors of with the consent of the guest author. 

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