Apkindo cancels plan on plywood export deposit
Apkindo cancels plan on plywood export deposit
JAKARTA (JP): The Association of Indonesian Wood Panel
Producers (Apkindo) has canceled a controversial deposit
requirement for its members which had been criticized as a
violation of the IMF-brokered rescue package for Indonesia.
Apkindo executive director A. Tjipto Wignjoprajitno said
yesterday the decision to remove the deposit requirement was made
due to a continued drop in plywood prices.
"The decision to abolish the compulsory bond was taken to help
plywood companies survive while facing the sharp drop in plywood
prices," Tjipto said.
He said the price of Indonesian plywood overseas had declined
since August due to a lower demand.
Plywood in China sold at $220 per cubic meter last month, a
sharp drop from its average price of $400 per cubic meter last
year. Plywood prices in European countries and the United States
have also dropped 30 percent since late January, he said.
Apkindo issued a directive on Jan. 29 obliging all plywood
companies to transfer to the association's bank account Rp 50,000
(US$5) for every cubic meter of plywood exported from early last
month.
The directive to Apkindo's 112 company members said the fund
was needed to facilitate the operations of Apkindo's center of
statistics, which was established in January.
The association required plywood companies to submit certain
information to the center every time they made an export
shipment. The export information must include copies of export
notification forms, bills of loading and other basic facts.
Tjipto said the decision to scrap the deposit requirement
would help plywood producers who have already been hit by a
declining demand from the country's two major buyers, Japan and
South Korea.
Apkindo explained that the bond was a security to guarantee
that each company would submit all required export information.
Upon satisfactory submission of the information, the association
said it would refund the deposits.
Many plywood companies, however, said the new directive broke
the 50-point Memorandum of Economic and Financial Policies agreed
to by the government and the International Monetary Fund on Jan.
15 as a condition to a $43 billion bailout package arranged by
the IMF.
The memorandum, among other things, banned all formal and
informal restrictive marketing arrangements and all other cartel-
like practices in the plywood, cement and paper sectors from Feb.
1.
Minister of Industry and Trade Tunky Ariwibowo issued four
rulings in late January which removed all restrictions on plywood
trade, dismantled Apkindo's joint-marketing board and revoked the
quota system in plywood exports.
Tjipto said accusations that the association had created a new
monopoly arrangement by requiring its members to export solely
through PT Karana Lines (controlled by Apkindo Chairman Mohammad
'Bob' Hasan) were not true.
He said 23 other local and foreign shipping companies were
allowed by Apkindo to handle shipments as they had joined the
association's center of transportation service.
He also denied that Karana had any preferences to transport
plywood only to certain markets.
"Apkindo appointed those shipping companies, whose integrity
has been proven, to curb the smuggling of Indonesian plywood," he
said.
Tjipto said Apkindo's members were no longer obliged to sell
through its overseas trading firms. "They are now free to deal
directly with foreign buyers as required under the government's
agreement with the IMF," he added.
Apkindo now functions mostly as a communication forum for
plywood producers and a liaison agency between its members and
related ministries, he said.
Indonesia is currently the biggest producer of plywood in the
world. Last year, the country exported 7.58 million cubic meters
worth $3.58 billion.
But Tjipto said the export value of Indonesian plywood was
expected to fall almost 50 percent this year due to a drop in
demand and prices overseas. (gis)