Inhutani to develop 2.2m ha estates

JAKARTA (JP): The government has assigned state-owned forestry company PT Inhutani III to develop 2.2 million hectares of timber estates in Central Kalimantan under a joint agreement scheme with private concessionaires, the company said over the weekend.

Company production director Hary Santjoko said the 2.2 million hectares of timber estates were previously controlled by 19 concessionaires, including Jayanti, Tanjung Raya, Dwima, Antang Group, Barito and Bumi Indah Raya.

The private firms, however, failed to manage the forests in an environmentally sustainable manner.

As a result, the ministry of forestry assigned Inhutani III to develop the dilapidated estates on a joint basis with these 19 concessionaires, Hary was quoted by Antara as saying.

Inhutani, he said, would spend Rp 14 billion (US$5.9 million) to replant the forests this year, which it would take from reforestation funds allocated by the government or, if the funds were difficult to obtain, its profit.

"If the reforestation fund is difficult to tap, we'll use 20 percent of our profit," he said.

The reforestation fund, derived from mandatory fees paid by concessionaires to ensure environmentally-sustainable management, reached Rp 880.7 billion last year, up from Rp 806.6 billion in 1995.

The fee is relative to the amount of timber felled by concessionaires.

Regarding distribution, Hary said, Inhutani III would improve its distribution system domestically by opening two sales offices in Solo, Central Java and Banyuwangi, East Java this year to supply domestic customers.

The company had only one sales office in Surabaya.

Inhutani sells its timber domestically and to Europe and Japan.

According to Hary, Inhutani sold timber at Rp 250,000 per cubic meter on the local market, and traders distributed them to end buyers at Rp 325,000 per cubic meters. (jsk)