Japan’s consumption of large amounts of tropical plywood for its housing and construction sector, as well as logs and sawn timber, is being seen as a boost for companies such as Ta Ann Holdings and WTK Holdings.

The companies say Malaysia has now overtaken Indonesia as the main plywood supplier to Japan, due to Indonesia’s log supply problems.

But the tropical timber industry is still seen as facing some challenges, such as log supply restrictions, oil price rises, inflation and higher interest rates.

Ta Ann recorded a net profit of M$80.7m last year, down from M$90.3m in 2004, while Cymao’s net profits also dipped to M$16.3m from M$21m.