It was then that LHT Holdings, one of the companies in this situation, turned challenge into opportunity. It started recycling to slash disposal costs that amounted to $600,000. The firm launched Singapore’s first wood waste recycling plant in 1999, using technology to convert wood chips into new revenue-generating products such as furniture, flooring strips, fire rated doors and wooden pallets.

This focus on innovating for sustainability aligns with JTC’s plans to reimagine Sungei Kadut into an eco-district where industries can leverage technology for productivity and the environment.

Reflecting on the company’s journey, LHT Holdings’ CEO, Ms May Yap, says, “20 years ago in Sungei Kadut, only our company was doing recycling using technology.” Other timber companies were recycling manually by picking out wood parts for recovery purposes, according to Ms Yap.

With an eye on efficiency and quality, LHT Holdings invested $15 million to import and set up recycling technology from Germany. These machines crush and process wood waste into recycled wood products through multiple steps. This system helps the company recycle 30,000 tonnes of wood waste annually, conserving approximately 4,500 trees and reducing their reliance on natural wood sources.

Besides that, the company also achieved productivity gains from digitalisation. Its 24-hour factory requires only 24 staff to oversee the automated operations over two shifts. The company also benefited from increased wooden pallet production, as recycled wood – which has already been processed and refined – takes a shorter time to convert into a pallet than natural wood.

As with most companies, LHT Holdings had to weather some challenges when introducing the new range of recycled products, one of which was changing the consumers’ mindsets. “Initially, consumers were like, ‘I don’t want recycled products’,” shares Ms Yap. She and her team had to spend time and effort convincing consumers that recycled wood is as good as natural wood.

Another hurdle they experienced was during the 2002 economic downturn, when raw timber prices halved from US$220 per cubic metre to US$110. This – together with the consumers’ unfamiliarity with recycled products – contributed to an overstock of LHT Holdings’ recycled wood products, which by then had amounted to five football fields’ worth. The company nearly went bankrupt, Ms Yap recalls.

A turning point came in 2004, when the International Wood Packaging Standard (ISPM 15) was released. All wood packaging products were required to undergo heat treatment, a process that LHT Holdings’ recycling technology had already incorporated. The new standards validated the company’s production process and boosted sales, which allowed LHT Holdings to clear their excess stock in 3 years.

Today, LHT Holdings primarily produces various types of wooden pallets, including wooden bases that are used to package shipments for transport, and recycled wood that is used for furniture, flooring, building material, and heavy-duty industrial applications. The company also provides value-added services such as pallet leasing, industrial packing and supply chain services.

Looking ahead, LHT Holdings continues to try new ways to improve its processes and products. For example, it generates electricity from some of the unwanted wood. It also works with partners such as Singapore Institute of Manufacturing Technology on its Pallet and Crate (PnC) Design System, which aims to improve the efficiency and effectiveness of wood.

The PnC design requires fewer materials and extends the life span of the wooden pallets by allowing them to be reused more frequently, making them more sustainable. While LHT Holdings still uses natural wood, it ensures that waste is recycled wherever possible – making it near zero waste, and in line with Sungei Kadut’s push for a circular economy where resources stay in use in closed loop systems for as long as possible.

In fact, the company is building a new five-storey factory within Sungei Kadut that aims to be completely zero waste. Named the Envirohub, it will feature smart systems to improve operations and produce technical wood from recycled wood waste, shares Ms Yap.

LHT Holdings plans to install sensors on all its compressors to detect power leakages and reduce energy wastage. Also in the works are monitoring systems for sound level, air pollution, air pressure and energy consumption during production.

Besides optimising resources, the company is looking to boost productivity through its development of a Sustainable Production Management System for Automated Pallet Assembly Lines. This monitoring system is targeted at increasing daily pallet output, reducing order-to-shipment lead time, improving operation efficiency, among other goals.

With such innovations, LHT Holdings is also hoping to reduce carbon emissions by 35%. At the Envirohub, the company will continue to test new ways to make their products and processes greener and better, says Ms Yap.