Wood-processing firms face log scarcity: Minister<\/p>\n
JAKARTA (JP): Minister of Forestry and Plantations Muslimin
\nNasution predicted on Wednesday that the country's wood-
\nprocessing industry was facing a log shortage of at least 25
\nmillion cubic meters annually over the next five years.<\/p>\n
The supply of logs over the next five years, he said, would be
\n31.36 million cubic meters per year -- far less than the 57
\nmillion cubic meters needed by the country's 1,812 wood-
\nprocessing firms each year.<\/p>\n
\"The log supply is only sufficient for about 55 percent of the
\nwood-processing industry's production capacity.\"<\/p>\n
Indonesia has 1,701 sawmill companies with a combined annual
\nproduction capacity of 13.28 million cubic meters, 105 plywood
\ncompanies able to produce 8.14 million cubic meters and six pulp
\nand paper companies with a production capacity of 3.86 million
\ncubic meters.<\/p>\n
Operating at maximum levels, the sawmill industry would need
\n26.57 million cubic meters of logs per year, the plywood industry
\n17 million cubic meters and the six pulp and paper firms 13
\nmillion cubic meters.<\/p>\n
To address the shortage, Muslimin said the government would
\ncut its log export quota next fiscal year.<\/p>\n
The government set a log export quota of 5 million cubic
\nmeters for 1998\/1999 as agreed with the International Monetary
\nFund.<\/p>\n
The freeing up of log exports was mandated by an agreement
\nwith the IMF despite the fact that most of the country's wood-
\nprocessing industries are currently operating at 30 percent to 40
\npercent of production capacity.<\/p>\n
Muslimin blamed the Ministry of Industry and Trade and the
\nInvestment Coordinating Board (BKPM) for the current scarcity of
\nlogs and the idleness of most wood-processing firms.<\/p>\n
\"BKPM and the Ministry of Industry and Trade issued permits to
\nthose wanting to develop wood-processing plants without
\ncalculating the log supply with the Ministry of Forestry and
\nPlantations,\" he said in a hearing with the House of
\nRepresentatives commission III for agriculture, forestry and
\nplantations, transmigration and food affairs.<\/p>\n
\"The supply shortage has resulted in rampant wood stealing and
\nillegal trade. I've discussed the matter with Pak Rahardi and we
\nwill discuss it further,\" he said, referring to Minister of
\nIndustry and Trade Rahardi Ramelan.<\/p>\n
Muslimin urged the Ministry of Industry and Trade to return
\nmonitoring functions on local wood-processing industries to his
\nministry to avoid a further scarcity of raw materials in the
\ncoming years.<\/p>\n
The supervision of the industry has been under the Ministry of
\nIndustry and Trade since 1986.<\/p>\n
Muslimin also said on Wednesday he would increase interest
\nfines imposed on timber companies late in paying their
\nreforestation fees to between 1.5 and two times the current
\nbanking commercial rates in a bid to force them to pay the fees
\non time.<\/p>\n
\"The current fine of two percent of timber companies' debts
\nper month is too low compared to the current commercial rates. We
\nhave discussed it with the finance minister and he said that the
\nfines should be increased between 1.5 and two times the
\ncommercial rates,\" he said.<\/p>\n
Current commercial rates are hovering over 60 percent.<\/p>\n
Muslimin said unpaid reforestation funds totaled Rp 133
\nbillion (US$12 million) since April last year.<\/p>\n
Last week, Muslimin's office announced that timber companies
\nwould be obliged to pay reforestation funds in advance and not
\nafter they sold their logs or wood products in a bid to avoid
\nlate payments and huge unpaid fees. (gis)<\/p>",
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