Producers may cut newsprint prices<\/p>\n
JAKARTA (JP): Newsprint producers agreed yesterday to sell
\ntheir products to newspaper publishers at average rates of their
\nexport prices, possibly reducing newsprint prices by almost 20
\npercent.<\/p>\n
The Association of Indonesian Pulp and Paper (APKI) and the
\nAssociation of Indonesian Newspaper Publishers (SPS) signed the
\nagreement yesterday which set the price of newsprint, which is
\nsold in U.S. dollars, at the average free-on-board (FOB) export
\nprices.<\/p>\n
The deal will be effective for the next three months.<\/p>\n
"This is a win-win solution for both parties," Minister of
\nTrade and Industry Rahardi Ramelan, who also signed the
\nagreement, told reporters yesterday.<\/p>\n
The agreement states that negotiating parties will use the
\nnewsprint company's average FOB rate of the previous month.<\/p>\n
APKI's secretary-general, Kahar Haryopuspito, said the
\ncountry's largest newsprint producer, PT Aspex Paper, currently
\nexports its product to the United States at the FOB price of
\n$410, Australia at $480 and Malaysia at around $475.<\/p>\n
The agreement also states that negotiating parties will use
\nthe average dollar-rupiah exchange rates of a week before the
\npurchase.<\/p>\n
SPS chairman Leo Batubara said yesterday the use of the
\nagreement would allow a cut in the newsprint prices by as much as
\n20 percent from the current price, set at $505 per ton in March.<\/p>\n
"If the FOB price is $410 per ton, it would be Rp 6,175 per
\nkilogram in rupiah or a 20 percent drop from Rp 7,610 per
\nkilogram currently," Leo said.<\/p>\n
The two associations agreed in May to set the newsprint price
\nat $505 per metric ton when the rupiah was about 8,500 to the
\nAmerican dollar.<\/p>\n
The rupiah has since plunged to about 14,000.<\/p>\n
Rahardi said the new deal would nullify the government's
\nearlier offer to subsidize cash-strapped newspapers and magazines
\nby waiving the 15 percent value-added tax on newsprint.<\/p>\n
"For now, there will be no tax waivering because this deal has
\nbeen agreed upon."<\/p>\n
Increasing prices of newsprint has continued to burden local
\nnewspaper publishers, which began drastic cost-cutting measures
\nlate last year.<\/p>\n
Newsprint material and recycled papers are mostly imported
\nbecause of the lack of supply in the country.<\/p>\n
Leo said only 9 percent, or 900 tons, a month of the old
\nnewspapers in the country were sold back to the newsprint
\nproducers, compared to domestic demand of 11,000 tons per month.<\/p>\n
Gatherers of old newspapers were reluctant to sell the papers
\nto the producers because the companies only paid them Rp 500 per
\nkilogram, Leo said.<\/p>\n
Meanwhile, producers import recycled papers at Rp 1,600 per
\nkilogram, he added.<\/p>\n
Kahar said the total production capacity of the country's
\nseven newsprint producers reached 643,400 tons in a year.<\/p>\n
Aspex made up 430,000 tons of the amount, PT Kertas Leces
\n90,000, PT Suparma 30,000, PT Setia Kawan 7,000, PT Gede Karang
\n50,400 and PT Adi Prima 36,000, he said.<\/p>\n
Kahar said domestic consumption of newsprint had dropped to
\nabout 120,000 tons a year from about 200,000 tons before the
\ncrisis. (das)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/producers-may-cut-newsprint-prices-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}