Govt gives assurances on pulp production<\/p>\n
JAKARTA (JP): Several Golkar legislators say the Ministry of
\nForestry would try to boost pulp production, to help solve the
\ncurrent shortage of newsprint paper.<\/p>\n
\"The Minister of Forestry has instructed his staff, especially
\nthose related to forestry development, to monitor and fulfill the
\nsupply of raw materials for pulp production,\" Abdurrachman
\nRangkuti, chairman of the paper task force, made up of Golkar
\nlegislators, told reporters last week after a meeting with
\nMinister of Forestry Djamaludin Suryohadikusumo.<\/p>\n
Rangkuti did not say exactly when and how the Ministry will
\nboost pulp production in Indonesia.<\/p>\n
\"The minister said that he expects all pulp mills to follow
\nall existing forestry and environmental regulations in trying to
\nincrease their production,\" the legislator said.<\/p>\n
Minister Djamaludin declined to give any comments.<\/p>\n
The meeting between the legislators and the minister was
\nconducted as part of the ruling party's attempt to deal with the
\nrecent controversy of what appeared to be a sudden shortage of
\nnewsprint.<\/p>\n
The shortage has reportedly threatened several newspaper
\npublishers to temporarily suspend publication.<\/p>\n
At the same time, both newspaper publishers and paper
\nproducers are faced with the rapidly increasing price of pulp,
\nwhich currently reaches about US$1,000 per ton, as compared to
\n$350 in 1993.<\/p>\n
Available data shows that out of its total installed annual
\nproduction capacity of about two million tons, Indonesia produces
\nabout 800,000 tons of pulp every year.<\/p>\n
Redeem<\/p>\n
Despite Golkar's lobbying to the Forestry Ministry, it is not
\nclear whether an increased production of pulp can substantially
\nredeem the newsprint shortage.<\/p>\n
Industry sources told The Jakarta Post recently that pulp is
\nnot a significant factor in newsprint production since 80 percent
\nof raw material input, in the manufacturing process, comes from
\nimported waste paper.<\/p>\n
\"Newsprint producers can increase the usage of pulp in
\nnewspaper production by only up to approximately 35 percent of
\nall input,\" the source, an executive of a domestic paper mill,
\nsaid.<\/p>\n
Some analysts said that waste paper now sells for about $410
\nper ton, indicating a steep rise from being virtually free of
\ncharge, except for transportation and collection costs, several
\nyears ago.<\/p>\n
Moreover, the Golkar team does not seem to address the
\ncomplicated structure in the newsprint trade, which was heavily
\nprotected by import-tariffs in the past.<\/p>\n
The tariff protection for newsprint is now only five percent,
\ndown from about 40 percent in the 1980s.<\/p>\n
Out of all the paper mills in Indonesia, only two companies
\nmake newsprint, the state-owned PT Kertas Leces and PT Aspex
\npaper, which is partially controlled by influential industrialist
\nMohammad (Bob) Hasan.<\/p>\n
According to official figures, Leces and Aspex have a combined
\nannual production capacity of 300,000 tons.<\/p>\n
Out of that, about 150,000 tons are sold directly to the
\ndomestic media industry every year, while about 70,000 tons are
\nsupplied to school text-book producers. The balance of the output
\nis usually exported.<\/p>\n
Appeal<\/p>\n
Minister of Industry Tunky Ariwibowo said last week that he
\nwould \"appeal\" to the two newsprint firms to suspend exports this
\nyear and maintain current selling prices.<\/p>\n
The government also decided recently to revoke the regulation
\nrequiring the use of containers in the importation of waste
\npapers.<\/p>\n
This strict policy increased shipment costs to as high as 110
\npercent of production cost, industry sources said.<\/p>\n
The policy, passed by the Attorney General's Office, was
\nenforced to safeguard the country from communism and pornography
\nand other vices to the state-ideology Pancasila.<\/p>\n
Prior to its revocation, no one, including trade and industry
\nofficials and industry players, knew which government agency
\npassed this regulation.<\/p>\n
Despite the breakthrough in the import regulation of waste
\npaper, it is still not clear why there have not been any
\nnewcomers in the potentially lucrative newsprint industry.<\/p>\n
Various analysts, including the World Bank, have said that
\nentry barriers are created by the cartel in the paper industry,
\nespecially in the pricing mechanism of the products.<\/p>\n
The Association of Pulp and Paper Producers hinted recently
\nthat despite the relaxation of import rules, rising prices of
\nwaste paper might force the price of newsprint higher still.
\n(hdj\/rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-gives-assurances-on-pulp-production-1447893297",
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