PRIMARY MARKET: MALDIVES

Malaysia 2019 | INDUSTRY & MINING | VIP INTERVIEW

TBY talks to Karen Moss, CEO of Borneo Benar, on 20 years of supplying the Maldives with timber, sourcing raw materials, and plans for the coming years.

How have Borneo Benar's operations evolved over the years?

Borneo Benar was established as a timber trading and manufacturing company by my father about 30 years ago. About 20 years ago, he had the opportunity to supply timber to the Maldives, which was experiencing rapid growth as a tourist destination. Being situated in the middle of the ocean, the Maldives faces a harsh environment. Airborne salinity, the content of salt in the air, is high, and there is moisture that needs to be dealt with as well. Malaysian hardwoods can and do stand the test of time in the Maldives, as they are the most durable and suitable for the area. Word spread about our timber, and from that onward, clients in the Maldives suggested constructing villas. The company decided to give it a go along with some engineers, coming up with a prefabricated system that was tailored specifically to the Maldives. The idea was to prefabricate easily transportable elements that could be easily built in the Maldives. Logistics in the Maldives can be troublesome, as the country is spread out over separate small islands. They also lack the big machinery, so everything has to be done by manpower. We have been lucky to work with some major brands in the Maldives, like Shangri-La and Constance Group of Hotels. My father really built the brand within the Maldives and the region, and the company became known for providing quality products. Moreover, since we were associated with major brands, people would come to us when they had plans for a high-end resort.

What is the scope of the products you manufacture?

Essentially in the Maldives, the whole draw is to have villas that are built over water. From the concrete substructure up, we take everything that is made with timber, such as walls, frames, roofs, floors, doors, and windows. We do not do furniture or lighting, but we would work together with other companies to make sure integration is seamless.

How would you like to further develop Borneo Benar's international presence?

We have been involved in projects in the Seychelles, Mauritius, Hong Kong, Sri Lanka, and are looking at further expansions. The Maldives has been our primary market for the past 20 years but it may reach a point of saturation as the number of resorts has skyrocketed. We have had a fantastic run, being involved with many prestigious brands. At present, there is a shift happening toward the development of mega resorts, as opposed to one island one resort. There are man-made integrated islands now with shopping malls, marinas and conference halls. We are now looking to grow the business and expand into areas outside the Maldives. We have been in talks with some potential clients in the Pacific and have also been asked to consider opportunities in the Middle East. The Southeast Asian market is competitive, but we are aiming to participate in some of the upcoming tourist developments here in Sabah itself. Sabah has so much natural beauty to offer and has the potential to become a key player in the luxury tourism sector. We hope that soon we would be able to utilize our experience and expertise to contribute to the local industry here.

How do you assess the contribution of Borneo Benar to the development of the timber and wood-based industry in Sabah?

The fact that we are one of the few timber-based companies in Sabah that manufactures value-added products sets us apart. The majority of the timber companies here tends to focus on sawn timber. We are one of the few who have succeeded to get exposure to international clients and let them realize there are companies from Sabah with the capabilities to produce finished products.

What needs to be done to further promote local production of value-added wood products and move away from timber exports?

Support from the government is crucial, and the current government is doing a fantastic job. Borneo Benar is lucky in the sense that we are involved in and get to oversee the entire process from log to finished product, which is what our clients love about us. However, over the past few years, the local timber industry has encountered issues with log availability and it has been increasingly difficult to get hold of raw materials. We are lucky in the sense that we get to control the entire process from log to finished product, which is what our clients love about us. The majority has been exported overseas, which has hampered the growth for some local timber players and made it impossible to survive for others. We need policies that prioritize local producers. The Chief Minister of Sabah is working on log export policy to protect the supply and ensure that local companies are able to fulfill their orders. There are many value-added processes that can and should be done here, and there is ample room to improve. Sabah has not promoted itself enough and has not tapped into its actual potential. There is room for so much growth, but it just needs a little bit of support and guidance.

What is your roadmap for the coming years?

I want to expand our reach. We have focused on the Maldives for two decades and it is time to start looking elsewhere. Thus, my biggest aim for the next five years is to establish ourselves in new regions. In terms of our actual products, I see a growing trend for bigger, mass resorts that are slightly lower range. I am working on developing two product lines; one for the higher-end customer, and one for the three- or four-star market, which is just as valuable in terms of volume. As of today, it is a relatively untapped segment for us.