Newsprint makers, consumers fail to reach agreement<\/p>\n
JAKARTA (JP): Newsprint producers and newspaper publishers
\nfailed again yesterday to reach agreement on a new price
\nfor newsprint for next month.<\/p>\n
Minister of Industry Tunky Ariwibowo told journalists after a
\nmeeting with the negotiating parties that they had agreed to
\nresume and finalize their talks tomorrow.<\/p>\n
\"There has been progress in today's negotiations. Hopefully,
\nwe can finalize everything on Wednesday. So, be patient,\" Tunky
\nsaid.<\/p>\n
Present at yesterday's negotiations were executives from the
\nAssociation of Pulp and Paper Producers and the Association of
\nNewspaper Publishers, as well as officials from the ministries of
\nindustry, trade and information.<\/p>\n
Last week the two associations held negotiations under the
\nauspices of the Ministry of Industry but failed to reach
\nagreement.<\/p>\n
A. Roesilah K. of the publishers' association hinted that
\nyesterday's negotiations had been deadlocked, with each party
\nsticking firmly to its respective position.<\/p>\n
Roesilah, who is also the business manager of the Kompas
\ndaily, said newspaper publishers were prepared to accept a price
\nincrease next month, but not the \"steep increase\", proposed by
\nthe newsprint producers, to Rp 2,450 per kilo, from the current
\nprice of Rp 1,700 (76 U.S. cents) per kilo.<\/p>\n
Margin<\/p>\n
Kusmadi, president of the state-owned newsprint producer PT
\nKertas Leces, said on behalf of the producers' association that
\nthe price of Rp 2,450 per kilo would give his company a profit
\nmargin of only five percent, because, he said, its production
\ncosts had increased to Rp 2,320 per kilo.<\/p>\n
However, Kusmadi acknowledged that his company's production
\ncosts might be higher than those of PT Aspex Paper, the other
\nnewsprint producer.<\/p>\n
\"If it turns out that my company is inefficient, it is not
\nfair to burden the people with that inefficiency, notably
\nnewsprint consumers,\" Kusmadi said.<\/p>\n
He said that if the publishers' association could not accept
\nthe price of Rp 2,450 per kilo, his company could lower its bid,
\nprovided that the yet-to-be-agreed price could be offset against
\nhis company's cash costs.<\/p>\n
\"We could accept a new (compromise) price level as long as it
\nis such that our company will still be running,\" Kusmadi said.<\/p>\n
The newsprint crisis, which is part of the global newsprint
\ncrisis, hit Indonesia last month when a number of small newspaper
\npublishers encountered newsprint shortages. The global crisis has
\nbeen triggered by the increasing prices of raw materials -- waste
\npaper and long-fiber pulp -- on the international market.<\/p>\n
According to the Ministry of Industry, Indonesia's newspaper
\npublishers need 12,000 tons of newsprint per month, of which
\nprivately-owned Aspex supplies 10,500 tons and Kertas Leces most
\nof the balance.<\/p>\n
Kertas Leces' annual production capacity stands at 65,000
\ntons, while Aspex' is 190,000 tons. In addition to Kertas Leces
\nand Aspex Paper, Indonesia has one other newsprint producer, PT
\nGede Karang of the Pos Kota Group, which has an annual production
\ncapacity of 30,000 tons.<\/p>\n
However, informed sources said Gede Karang did not produce
\nnewsprint until recently due to unattractive domestic newsprint
\nprices.<\/p>\n
Soegiarti of the Pos Kota daily said yesterday that Gede
\nKarang had now started limited newsprint production. \"However, we
\nare supplying only publishers in our group.\" (rid)<\/p>",
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