Apkindo faulted for export drop
Apkindo faulted for export drop
JAKARTA (JP): Minister of Trade Satrio B. Joedono blamed the
'sole marketing' system of the Association of Indonesian Wood
Panel Producers (Apkindo) yesterday for the drop in the country's
plywood exports.
"I think Apkindo's sole marketing system should be revised,"
Joedono told the House of Representatives.
Joedono told the House Commission on Trade and Logistics that
export revenue from plywood, a major foreign currency earner, had
fallen by 8.4 percent during the January-October period of last
year to US$3.49 billion, as compared with the corresponding
period of 1993.
Exports of wood products, mostly plywood, account for almost
16 percent of Indonesia's total export earnings.
The minister said the drop was not the result of economic
recession in major importing countries, such as Japan and South
Korea, as had been claimed by Apkindo. Rather, it had been caused
by the association's rigid marketing system, he said.
"The data shows that plywood demand in the three major
importing countries -- Japan, South Korea and the United States
-- have not decreased. But our exports to these countries have
fallen significantly," Joedono said.
Indonesia's exports of wood products to Japan for the January-
October period of last year fell by 10.1 percent to $1.39 billion
from the same period of 1993, to South Korea by 26.2 percent to
$379.6 million and to the United States by 7.9 percent to $369.3
million.
A.A. Baramuli, an outspoken legislator from the ruling Golkar
group, demanded that Minister Joedono dismantle Apkindo's export
monopoly and allow all plywood producers to export their products
directly to foreign importers without using Apkindo's trading
arms.
Joedono did not respond directly to Baramuli's demand, simply
stating that the government had challenged Apkindo to
reinvigorate plywood exports by improving its marketing system.
Baramuli described Apkindo's trading system as totally wrong
because producers cannot export their products directly to
overseas importers but have to export them through Apkindo's
trading arms in Singapore, Hong Kong and Japan.
Subsidiaries
In Japan, the biggest market for Indonesian plywood, Apkindo
has operated a subsidiary called Nippindo since 1985 to
distribute their products.
Apkindo appointed Indo Kor as the sole export window to South
Korea and Sesil Trading Co. as the sole importer of Indonesian
plywood early last year, prompting many Korean buyers to turn to
Malaysian suppliers.
The association has also set up other subsidiaries as its sole
trading arms in Hong Kong, China, Europe and the Middle East.
According to its critics, this system lengthens the marketing
chain and unnecessarily adds to the price of plywood.
Under the Apkindo system, plywood producers cannot export
directly. They must notify Apkindo's overseas offices of their
stock available for export. The trading arms, which receive
orders from importers abroad, then distribute the orders among
the producers and handle deliveries.
Apkindo's marketing monopoly has rendered the marketing
managers of around 200 plywood companies idle and forced many
plywood firms to abandon any marketing promotion.
Baramuli predicted that if the current plywood export system
is not dismantled Indonesia's plywood exports might drop by a
further $1 billion this year.
He challenged the commission to cooperate with other House
commissions to exercise their parliamentary right to investigate
cases involving the public interests.
At the close of the hearing Joedono said: "The approach
adopted by the House and that adopted by the government might be
different, but the essence is the same. We want to solve the
problem in the national interest." (rid)