Govt vows not to curb investment in MDF

JAKARTA (JP): The government will not limit investment in the nation's medium-density fiberboard (MDF) industry despite the market glut, a minister has said.

Minister of Forestry Djamaludin Suryohadikusumo said Friday an oversupply of the MDF wood products was normal.

"The MDF market, like that of pulp, fluctuates every two to three years," Djamaludin was quoted as saying by Bisnis Indonesia daily. "I am optimistic that it will get better in two to three years."

Oversupply of the MDF products reached a total of 1.3 million cubic meters last year.

The minister said investors knew more about the current situation of the market and would not risk investments in the sector.

Companies must obtain permits from the government before they can build or expand an MDF plant, he added.

Meanwhile, the chairman of the Association of Indonesian Wood Panel Producer, A. Tjipto Wignjoprajitno, said prospects for MDF remained promising despite the market glut.

Many furniture-makers had turned to the MDF for wood panels to substitute for plywood.

However, he said that using MDF instead of plywood would not threaten the plywood industry, as fiberboard could not completely replace all elements of plywood usage.

Each wood panel type had its own market segment, he said. Customers from the middle to lower economic segment preferred cheaper wood panels such as MDF, particle board and block board, he said. (das)