Michael Hermens, managing director of APP Timber, which was started in 1994 and offers a diverse product line. The firm works closely with about 30 supplliers 20 countries.
APP Timber – An Innovative Company Providing Imported Timber Solutions
By Michael Buckley
Kuala Lumpur, Malaysia–Owned and directed by a Dutchman who is married to a Singaporean, and based here and importing timber from around the world into Asia, APP Timber has to qualify as unique. Managing Director Michael Hermens has guided the extraordinary development of this timber trading firm.
It is probably fair to say that APP Timber started life in 1994 as a small traditional sales agent representing shippers of and lumber into Southeast Asia - mainly Malaysia. The company has come a long way since then, both in terms of growth and in its business philosophy. Today APP Timber is literally branching out all over and seeks to become a global player in the trading of all types of timber products with Asia as its main focus. The company has a long tradition in hardwoods, especially from the United States, but now also includes a significant portfolio of softwoods in its offering.
APP Timber has a long tradition of hardwoods, especially from the United States, but now includes a significant portfolio of softwoods.
Hermens has always insisted that APP Timber “partners” with both its customers and suppliers. He fundamentally does not like the term agent. “We work with our partners to seek solutions to their problems of both supply and demand,” he says. “APP Timber will partner with any company wishing to find solutions to marketing and technical problems. In today’s difficult market it is essential that we are all on the same side of the fence.” This philosophy has not always found immediate acceptance, but over time Hermens believes that the company’s position has paid off. There is no other company in Southeast Asia today that can match the sheer range and choice of imported timber products on offer from one stable.
At a recent wood industry show in Saigon, APP timber partnered with several of its overseas suppliers from New Zealand, Chile, Finland, Australia and the USA. In total the company works closely with about 30 suppliers from 20 countries. The United States has long been a key source of raw material particularly hardwood lumber. As 2010 approaches, the company is looking to appoint a Sourcing Manager of any nationality with the right relevant experience and willing to live in Malaysia. There is a strong personal ethic within the 17 strong team based in Kuala Lumpur and 35 in total globally - all of whom Michael Hermens always refers to as his “colleagues.” The company intends to expand its marketing team in Asia with at least another 15 colleagues in 2010. APP Timber runs its own operations for importing timber products from Australia, Belgium, Cameroon in West Africa and the USA - four continents. There is also a representative in Brazil in South America.
APP Timber lists 39 species of timber available from certified sources, of which five key hardwoods are from the U.S. out of the 16 American hardwoods offered.
Currently there is a warehouse in Malaysia, with three more planned, a large bonded warehouse in Vietnam and more planned for Indonesia and Thailand early in 2010 and thereafter. The growth of domestic markets within Asia and the need for better distribution and technical support are the main drivers of this growth programme.
APP Timber’s diversity of supply offers Asian customers the solutions they need from reputable suppliers in which the company has enormous confidence and trust. From an anticipated turnover of US$21 million in 2009 Hermens expects the company to continue growing as more high value timber products such as heat-treated softwood and machined furniture and joinery parts are added to the portfolio. “Of course, this is the toughest market we have ever seen and it’s no longer just a question of reduced demand, now it’s a matter of finance as the squeeze shows its longterm effect,” he says. But he remains convinced that there is a real need in Asia for expertise in timber products from outside the region as consumption develops and economies come out of this current global recession.
Shipping on time and providing timely shipment information is one of the administrative tenants of APP Timber’s style of business. The new company understands that its customers require their orders to be shipped on time and so has created an Online Tracking System (OTS) accessible by entering a unique User ID and Password, facilitating an update on current contracts and each respective shipment status. It also provides a record of all past shipments over the last three months – itself another innovative service in Asia.
APP Timber operates a warehouse in Malaysia, with more planned for Vietnam, Indonesia and Thailand in 2010 and thereafter. Here Bob Sabistina, with the National Hardwood Lumber Association, visits with Rudy Syarfi, of APP Timber-Indonesia.
Also well understood is the increasing importance of providing environmental credentials and wherever possible certified material and products. APP Timber is FSC certified (FSC SW-COC-001657). The company lists 39 species of timber available from certified sources of which five key hardwoods are from the USA out of the 16 American hardwoods offered. “We are fully committed to sourcing legal and sustainable timber wherever we can, without compromising the wide range of species and solutions we want to give our customers,” says Hermens. That, he claims, is one reason for significant concentration on American hardwoods which are accepted as sustainably and responsibly produced, as well as unlikely to include any illegally harvested material according to a recent independent study commissioned by the American Hardwood Export Council.
For the future there is a three-point marketing plan in place; to strengthen the sales team, widen the marketing network and strengthen the supply of product resources. The last may well be the most important for a company that seems to have no problem in growing its customer base.
From an anticipated turnover of US$21 million in 2009, APP Timber expects to continue growing as more high value timber products, such as heat treated softwood and machined furniture and joinery parts, are added to the portfolio.