Apkindo chief denies business cartel charge
Apkindo chief denies business cartel charge
JAKARTA (JP): The Association of Indonesian Wood Panel
Producers (Apkindo) denied that it had been operating as a
business cartel.
"Apkindo is not a cartel. The association does not fix prices
and export quotas, we just provide price and market information
in overseas countries to exporters," the association's executive
director, Tjipto Wigjoprajitno, said Wednesday.
However, many plywood producers have long complained about
rent-seeking practices by the association and its trading arms
which have virtually monopolized the trading of plywood in Asia,
Europe and the United States.
Tjipto said Apkindo's duties were to provide information about
prices, markets, demand of major buyers, enhance cooperation
between companies and the government, and act as a business forum
for wood panel companies.
He, however, added the association fully supported the
government's commitment to eliminate all kinds of monopolistic
practices.
"If the government considers the association's operations to
be like that of a cartel, we will stop the activities. But
Apkindo will still exist as a business forum for its 112
members," he said.
Tjipto said Apkindo was established to prevent price wars
between plywood exporters, such as the one in 1984 which caused
plywood prices to drop drastically to US$125 per cubic meter. The
price of plywood currently reaches US$600 per cubic meter.
President Soeharto announced massive economic reforms last
week in exchange for a US$40 billion bailout program arranged by
the International Monetary Fund.
Under structural reforms, the government will abolish all
restrictive marketing arrangements starting Feb. 1, leaving firms
free to produce and export their products as they wish and as the
market determines. Specifically, cement, paper and plywood
cartels will be dissolved.
The reforms specifically stipulate that "no firms will be
forced to sell their products through a joint marketing
organization (such as Apkindo), nor be required to pay fees or
commissions to it."
Tjipto said export quotas for plywood, a wood panel product,
are determined by the Ministry of Industry and Trade, not by
Apkindo, but Apkindo's members decide the amount of each
companies' exports on their own.
He also said the quota aimed to manage forests in a
sustainable manner and to protect forest from severe
exploitation.
"If timber companies could export plywood freely, our forests
would be exploited excessively. It would endanger the supply of
wood and forest resources," he said.
Indonesia is the world's biggest producer of plywood. The
country's export of plywood reached US$3.59 billion in the
January-November period last year, slightly down from US$3.65
billion in the corresponding period of 1995. The country sold
most of its plywood to Japan, the United States and South Korea.
Minister of Forestry Djamaludin Suryohadikusumo said last week
that he was ready to dissolve all cartel-like associations under
his ministry as part of the government's commitment to abolish
all monopolistic practices in the country. (gis)