Renewables have become part of the everyday lexicon, reflecting the rapid shift toward cleaner energy sources. For most people, that conversation begins and ends with solar. But another renewable resource is quietly emerging as a powerful player in the energy transition: wood.
Malaysian company Asia Green Wood is pioneering the use of the material for greener energy purposes under the guidance of CEO Loong Khoon Tan. Since he assumed the leadership role in 2023 with an already impressive tenure at the company, he has transformed its direction and changed its name from Asia Plywood to clearly mark this shift.
“We are diversifying and expanding to become a green energy solution company.”
“The first thing I did was change the supply chain to more than 90 percent sustainable sources,” he tells The CEO Magazine.
“In our forestry business, we invested in a lot of Programme for the Endorsement of Forest Certification (PEFC) forest as well as low-impact logging machinery. When we go in and extract logs, this machinery has the least impact on the earth itself so that the area would not be impacted by landslides or flooding.”
Other key moves included solar panels on the roof of company headquarters to generate clean energy, wastewater treatment and an ‘ethical audit’ by its United Kingdom customers to ensure it was meeting international standards.
Fresh focus
Perhaps most interestingly, Asia Green Wood recently acquired a machine – built in China using Australian, Chinese and German engineering – that enables it to give its wood waste new life. Instead of producing black smoke as a by-product of the wood-burning process, the new technology heats the wood to 1,200 degrees Celsius, eliminating black smoke.
“There is the potential for a 90 percent reduction in annual grid electricity dependence, with 2,400–3,000 metric tons of biochar produced annually, and an estimated gross climate benefit of approximately 14,000–15,000 metric tons of carbon dioxide equivalent,” Tan says.
“At the same time, it becomes syngas, which then goes into a generator and produces clean electricity for us. When balanced, the by-product is actually a biochar, which is a very good natural product that is mixed in with fertilizer, so less is needed because its quality has been enhanced.”
This focus on green energy will be significantly expanded over the coming years, Tan reveals, with the technology to be used on other forms of biowaste in addition to wood waste.
“We are diversifying and expanding to become a green energy solution company,” he says. “What I see in Malaysia is that a lot of private companies or the government sector still lack a lot of knowledge and technology around green technology, or are too afraid to roll it out, so now it’s mainly just solar.”
Initial interest in the new project is already strong, with Tan already in talks with suppliers and manufacturers about its potential. The first step, however, is to get it up and running, then obtain data around the extent of the electricity savings it can deliver, as well as how much revenue can be generated through biochar and carbon credits.
Reimagining culture
A rethink of the company culture has also taken place, with everyone now wearing the same uniform – even the CEO. Tan has also taken any blame out of the system so that now the aim is to solve any problems that arise as a team, rather than avoiding risk altogether.
“Also, I empowered the team to make decisions and come up with solutions rather than just listen to me,” he says. “They started putting that into practice, having interdepartmental meetings and starting to solve their own problems.”
“When an organization is driven by a purpose greater than profit alone, it inspires people.”
Asia Green Wood’s customer offering has also evolved over the past three years with Tan at the helm, moving away from a very price-based product toward more relationship-based products.
“That means that no-one is really competing with us and we are now more diversified into three different markets: the United States, Japan, and Europe and the United Kingdom,” he explains.
“The plan is to slowly start moving into the higher-end market. So instead of increasing volume, we will just increase the quality and then increase the margin.
“Because what we see now is that luxe supply and labor is a constraint, especially in Malaysia, so we are moving more toward that and differentiating ourselves from our competitors.”
Forward thinking approach
Automation and AI are also important tools as Asia Green Wood seeks to modernize and protect its position at the forefront of innovation in manufacturing.
“Compared to a lot of big factories in Indonesia and Malaysia, our efficiency rate of cubic meters per hit is actually one of the highest because we always have a philosophy of using the least work across all areas to be more efficient,” Tan explains.
“We use semi-automation across a lot of projects, which means we have machines to lift and move it, but with someone just to supervise it. And now, moving forward with AI, with the use of a visual sensor, we can use fewer workers to repair the boards and so on.
“For now, certain things are reliant on a visual base that requires workers but, other than that, we have changed the factory as much as possible to use the least amount of workers we can.”
“The greatest opportunities come from solving meaningful problems.”
All of these elements fit into a vision for Asia Green Wood that Tan brought to the CEO role when he took it on three years ago – one that centered on purpose.
“For a lot of CEOs or business owners, their main objective is just profit, but for me, over the years I found that that’s not the main goal,” he reflects.
“The greatest opportunities come from solving meaningful problems. Businesses should challenge themselves to develop innovative solutions that address social and environmental issues while creating economic value.
“When an organization is driven by a purpose greater than profit alone, it inspires people, strengthens resilience and creates lasting value for future generations.”
