'Illegal logging troubles plywood industry'<\/p>\n
Adianto P. Simamora, The Jakarta Post, Jakarta<\/p>\n
The Indonesian Plywood Association (Apkindo) said rampant illegal
\nlogging had created serious difficulties for the country's
\nplywood industry with many companies going out of business during
\nthe past couple of years.<\/p>\n
Apkindo chairman Martias said on Tuesday that the logs had
\nbeen smuggled out of the country particularly to Malaysia and
\nChina allowing plywood companies there to enjoy lower production
\ncosts because the cheaper illegal logs were not burdened with
\nforestry-related charges.<\/p>\n
\"Around one third of 115 local plywood factories have closed
\ntheir operations mainly due to the rampant illegal logging,\" he
\ntold reporters on the sidelines of a seminar.<\/p>\n
He warned that without immediate action to curb illegal
\nlogging, more plywood companies would go bankrupt.<\/p>\n
He said that domestic plywood companies had been losing the
\nmarket share at home because overseas plywood makers were
\nflooding the home market with cheaper plywood made from
\nIndonesian logs.<\/p>\n
\"Imported (plywood) products now control 60 percent of
\ndomestic market,\" he said.<\/p>\n
He added that the influx of cheaper imported products from
\nMalaysia and China had put a pressure on the price, now hovering
\nat around US$200 per cubic meter.<\/p>\n
The international plywood price now stands at about $250 per
\ncubic meters.<\/p>\n
Martias also said that the country's plywood exports had
\ndeclined to 6 million cubic meters last year from 8 million in
\n1997.<\/p>\n
\"China has became one of the plywood exporters to Indonesia by
\nusing logs illegally purchased in this country,\" Martias said.<\/p>\n
China in the past imported around 1.1 million cubic meters of
\nIndonesian plywood per year.<\/p>\n
Illegal logs procured by China are believed to come from Jambi
\nand Riau provinces, while those going to Malaysia come from East
\nKalimantan and West Kalimantan.<\/p>\n
According to one estimate, illegal logs sold to Malaysia and
\nChina reached 300,000 cubic meters per year.<\/p>\n
Director General of Foreign Affairs at the Ministry of Trade
\nand Industry Sudar SA said last week that the government was
\nplanning to impose a permanent ban on log export to protect
\nforest resources.<\/p>\n
The government eased restrictions on log exports in 1998 by
\nslashing export tax from 200 percent to 10 percent as part of an
\nagreement with the International Monetary Fund. The policy
\nprompted logging companies to sell logs overseas to obtain hard
\ncurrency.<\/p>\n
Analysts said that in addition to the illegal logging
\nactivity, the plywood industry has also been hit by the global
\neconomic slowdown and the lack of funding from domestic banks to
\nprovide working capital particularly to replace old machinery.<\/p>\n
Martias admitted that the lack of bank loans and security
\ndisturbances in certain areas had been a problem.<\/p>\n
\"The increase in fuel prices, electricity rates and the
\nregional minimum wage has also hampered the development of
\nplywood industry,\" he said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/illegal-logging-troubles-plywood-industry-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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