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)