Aug 11, 2008. /Lesprom.com/. Malaysia's timber giant Ta Ann Holdings Bhd plans to ride on the recovery of plywood prices by diversifying into new markets in Europe and the Middle East this year, while reducing its traditional exports to Japan, StarBiz reported. Japan currently represents about 97% of Ta Ann's total exports. Group managing director and CEO Datuk Wong Kuo Hea told StarBiz that both export destinations would initially account about 15% of the group's total production. Ta Ann has a production capacity of 26,000 cubic metres per month. “We have started a shipment of about 3,000 cubic metres film faced plywood per month into these new markets,” he said. Wong said that the rationale for the diversification was due to Ta Ann's bad experience following the collapse of the Japanese housing starts in 2006-2007 when changes in regulations had resulted in the lack of new housing development in the country. Ta Ann would continue to export to Japan but at a lesser volume as the country was still the biggest market for Malaysia's timber sector. On the outlook for timber, Wong said: “I am beginning to see some light at the end of the tunnel as timber prices starts to improve gradually.” The price of timber is currently at about $480 per cubic metres compared with $400 per cubic metres early this year. “I believe Ta Ann's current financial year performance is poised to be better than 2007 given the encouraging timber outlook and fundamentals,” he added. On Ta Ann's joint venture with Sarawak's Land Custody Development Authority for paddy cultivation, Wong said the group was waiting for the approval from the relevant authorities. Ideally, he said the group would be looking at cultivating about 4,000 ha for paddy and to operate a rice mill. The Sarawak state government recently said it has allocated 12.3 million ha of land to be transformed into the country's next rice bowl state.