Foreign paper industry accused of dumping

Foreign paper industry accused of dumping

JAKARTA (JP): Six local paper manufacturing industries have
gone bankrupt due to dumping by foreign companies, Chairman of
the Indonesia Forestry Community Mohammad (Bob) Hasan says.

"I have strong evidence indicating that foreign companies have
been dumping their paper on our market. The price of pulp in
Indonesia is already US$610 per metric ton but they sell their
paper for $600," he told reporters here yesterday.

He accused foreign companies of deliberately cutting prices
here to drive local firms into bankruptcy.

"They are afraid Indonesia will take over the international
paper market, as we have done in the plywood market. We have
edged many plywood overseas companies out of the market," he
said.

Due to these dumping practices, he said local paper firms
would still require protection, "at least until they can compete
with North American firms."

"We still have the rights to about 10 years of protection
before the General Agreement on Tariffs and Trade (GATT) requires
us to lower our import tariffs," he said.

American and Canadian paper companies are capable of efficient
production since they have fully depreciated their plants and do
not have to pay high interest rates, he added.

"If the dumping practices are not stopped, more local paper
mills may have to close down and we will have to depend mainly on
imports," he warned.

He said that a pulp manufacturer requires at least $1 billion
in investments and a paper plant about $500 million.

The Antara news agency quoted the Chairman of the Indonesian
Pulp and Paper Association M. Mansur as saying that local paper
producers still require tariff protection.

Paper is subject to a 25 percent import duty and 10 percent
value-added tax.

He said that without protection, local manufacturers are
unable to compete with American, Canadian and Japanese firms that
sell their products at reduced prices. (pwn)