Apkindo to increase panel wood production

Apkindo to increase panel wood production

JAKARTA (JP): The Association of Indonesian Wood Panel
Producers, Apkindo, said yesterday domestic wood panel production
would this year reach 10.5 million cubic meters.

Executive Chairman A. Tjipto Wignjoprajitno said the industry
would this year increase production and export volumes, a result
of better prices on the Chinese market and the large amount of
raw material supply on the domestic market.

Tjipto said of the planned 10.5 million cubic meters
production volume, 1.2 million would be sold on the domestic
market and the remaining 9.3 million exported to various
countries, including China.

He said China's rising demand resulted from its improved
economy. Secondary-process plywood factories in Taiwan, China's
main supplier of secondary-process plywood, were also short of
raw materials.

"As a result, China needs wood panel in large amounts."

The increase in demand has helped increase wood panel prices,
especially secondary-process plywood, the downstream product of
plywood.

Tjipto said he was optimistic China would be able to buy
Indonesia's wood panels because its foreign exchange reserves in
1995 reached US$31.5 billion and increased last year to $101
billion.

He expected China to import at least 1.8 million to 2 million
cubic meters of wood panel this year. He did not say how much
would come from Indonesia, or Indonesia's export target to China
this year.

Tjipto said Indonesia's wood panel production would be able to
meet this rising demand because there was likely to be sufficient
raw material supply this year.

Indonesia's supplies come from the harvest of forest
concessions, which will reach 22.5 million cubic meters this
year, and timber from forest-clearing activities, expected to
reach 23 million cubic meters.

"Timber harvests from forest-clearing activities that have a
diameter of 30 to 45 centimeters will total about 10 million
cubic meters this year, while smaller sized timber will reach
about 13 million cubic meters," he said.

He said raw material supplies this year were expected to
exceed Apkindo's demand of about 19 million cubic meters per
year.

Tjipto said prices of Indonesia's wood panel on the
international market was currently $509 per cubic meter. Prices
of floor base wood panels were $535 a cubic meter, thin wood
panels (2.4 millimeters thick) were $580 a cubic meter while
concrete panels were $465 per cubic meter.

He said Indonesia's major competitor, Malaysia, could not
compete with Indonesia because its current wood panel production
of 4.2 million to 4.5 million cubic meters had reached its
maximum level. (pwn)