Cut number of pages, papers told

JAKARTA (JP): President Soeharto suggested yesterday that, in view of the current newsprint crisis, newspaper publishers should reduce the number of pages rather than raising sale prices.

"The President suggested that, as newsprint prices are still high, the number of newspaper pages had better be reduced temporarily," Minister of Industry Tunky Ariwibowo told journalists after meeting Soeharto at the Merdeka Palace here.

Current Indonesian regulations limit the number of newspaper pages to a maximum of 20, and most dailies have between eight and 16 pages.

The newsprint crisis hit Indonesia last month when a number of small newspaper publishers encountered newsprint shortages. The crisis has resulted from the increasing prices of raw materials -- waste paper and long-fiber pulp -- on the international market.

Local newsprint prices are expected to increase next month from the current level of Rp 1,700 (76 U.S. cents) per kilo, which is effective until the end of this month.

Newsprint producers and newspaper publishers have held a series of negotiations on a new price of newsprint for next month. However, they have so far failed to reach agreement. Today, they are scheduled to meet again to resume and finalize their talks under the auspices of the ministry of industry.

"In working out a new price, we have to have reference to the production costs of newsprint companies and the purchasing power of newsprint consumers," Tunky said.

In the previous negotiations, newsprint producers have argued for a new price of Rp 2,450 per kilo, while newspaper publishers -- the main consumers of newsprint -- have held out for a price of less than Rp 2,000.

Kusmadi, president of the state-owned newsprint firm PT Kertas Leces, said earlier that his company's production costs were Rp 2,320 a kilo. Lee Won Je, president of PT Aspex Paper, the other newsprint producer, said his company's production costs were lower than those of Kertas Leces but higher than the current newsprint price of Rp 1,700.

Tunky said Soeharto had suggested that Indonesia build its own long-fiber pulp plants to lower local newsprint producers' dependence on imports.

"If we can produce our own pulp for newsprint, our production costs will be lower than those of other countries as we have all the raw materials. It is expected, therefore, that the price of newsprint can further reduced," Tunky said.

Local newsprint producers currently import almost 100 percent of the raw materials they use. Indonesia, which aims to be one of the world's largest pulp exporters, produces only a small amount of long-fiber pulp.

According to the ministry of industry, Indonesia's newspaper publishers need 12,000 tons of newsprint a month, of which 10,500 tons is supplied by Aspex and the rest by Kertas Leces.

Aspex and Kertas Leces were the country's only producers of newsprint until PT Gede Karang, owned by the Pos Kota Group, began limited newsprint production recently. However, Gede Karang supplies newsprint only to publishers within the Pos Kota Group.

The World Bank was quoted by Reuters yesterday as saying in its annual report, which has not yet been officially released, that Indonesia's pulp and paper industries are run like cartels.

Locally, Handjojo Nitimihardjo, chairman of the association of newspaper publishers, accused newsprint producers of using "market monopoly" to seek the largest possible profits.

The ministry of information's Director General of Press and Graphics Subrata was quoted by Antara as saying that speculation might be fueling the current newsprint crisis.

Commenting on the World Bank's report and Subrata's views, Tunky said: "Well, we'll look into the matter." (rid)