Apkindo chief denies business cartel charge<\/p>\n
JAKARTA (JP): The Association of Indonesian Wood Panel
\nProducers (Apkindo) denied that it had been operating as a
\nbusiness cartel.<\/p>\n
"Apkindo is not a cartel. The association does not fix prices
\nand export quotas, we just provide price and market information
\nin overseas countries to exporters," the association's executive
\ndirector, Tjipto Wigjoprajitno, said Wednesday.<\/p>\n
However, many plywood producers have long complained about
\nrent-seeking practices by the association and its trading arms
\nwhich have virtually monopolized the trading of plywood in Asia,
\nEurope and the United States.<\/p>\n
Tjipto said Apkindo's duties were to provide information about
\nprices, markets, demand of major buyers, enhance cooperation
\nbetween companies and the government, and act as a business forum
\nfor wood panel companies.<\/p>\n
He, however, added the association fully supported the
\ngovernment's commitment to eliminate all kinds of monopolistic
\npractices.<\/p>\n
"If the government considers the association's operations to
\nbe like that of a cartel, we will stop the activities. But
\nApkindo will still exist as a business forum for its 112
\nmembers," he said.<\/p>\n
Tjipto said Apkindo was established to prevent price wars
\nbetween plywood exporters, such as the one in 1984 which caused
\nplywood prices to drop drastically to US$125 per cubic meter. The
\nprice of plywood currently reaches US$600 per cubic meter.<\/p>\n
President Soeharto announced massive economic reforms last
\nweek in exchange for a US$40 billion bailout program arranged by
\nthe International Monetary Fund.<\/p>\n
Under structural reforms, the government will abolish all
\nrestrictive marketing arrangements starting Feb. 1, leaving firms
\nfree to produce and export their products as they wish and as the
\nmarket determines. Specifically, cement, paper and plywood
\ncartels will be dissolved.<\/p>\n
The reforms specifically stipulate that "no firms will be
\nforced to sell their products through a joint marketing
\norganization (such as Apkindo), nor be required to pay fees or
\ncommissions to it."<\/p>\n
Tjipto said export quotas for plywood, a wood panel product,
\nare determined by the Ministry of Industry and Trade, not by
\nApkindo, but Apkindo's members decide the amount of each
\ncompanies' exports on their own.<\/p>\n
He also said the quota aimed to manage forests in a
\nsustainable manner and to protect forest from severe
\nexploitation.<\/p>\n
"If timber companies could export plywood freely, our forests
\nwould be exploited excessively. It would endanger the supply of
\nwood and forest resources," he said.<\/p>\n
Indonesia is the world's biggest producer of plywood. The
\ncountry's export of plywood reached US$3.59 billion in the
\nJanuary-November period last year, slightly down from US$3.65
\nbillion in the corresponding period of 1995. The country sold
\nmost of its plywood to Japan, the United States and South Korea.<\/p>\n
Minister of Forestry Djamaludin Suryohadikusumo said last week
\nthat he was ready to dissolve all cartel-like associations under
\nhis ministry as part of the government's commitment to abolish
\nall monopolistic practices in the country. (gis)<\/p>",
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"sponsor": "Okusi Associates",
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