Irian Jaya forests to help overcome timber shortage

Irian Jaya forests to help overcome timber shortage

JAKARTA (JP): Minister of Forestry Djamaludin Suryohadikusumo says the government will encourage forest concessionaires in Irian Jaya to step up operations in order to overcome the shortage of timber facing plywood mills.

Djamaludin told reporters yesterday that Irian Jaya's forests can provide plywood mills with the logs they need because there are only a few wood-based industrial plants in the province.

Most of the plywood mills operating in Indonesia are located in the western part of the country.

"The concessionaires in Irian Jaya are presently either inactive or have had their licenses revoked," Djamaludin said during a hearing with the House of Representatives Commission IV for agricultural, forestry and transmigration affairs.

The minister said earlier this month that Indonesia might have to import logs for plywood plants which cannot get timber supplies from existing natural forests.

But President Soeharto said last week that importation was unnecessary and that log shortages would ease when the current rainy season ends.

Soeharto also said that log supplies would increase when the government starts clearing peat moss in Central Kalimantan for the establishment of one million hectares of rice fields.

Djamaludin said yesterday the giant rice field project, which started earlier this month, would be able to bring in about six million cubic meters of wood by the time the project ends in 1998.

But he pointed out that the most effective way of overcoming the shortage is for timber estates and plywood mills to restructure their industrial facilities.

"The idea of allowing the importation of logs is a test case to see if plywood mills are ready to face globalization and the free trade era...When the time comes, the log prices will be determined strictly by the market and local mills will no longer have a chance of getting cheap timber," he said.

Djamaludin said wood-based industries should not only pursue benefits for themselves.

"If they don't invest in new machinery, they won't survive globalization," he added.

Djamaludin, in yesterday's hearing, explained that the Ministry of Forestry will allocate Rp 596 billion (US$260.26 million) from its collection of reforestation funds to finance a possible deficit in the upcoming 1996/1997 state budget.

The same amount was allocated in the previous (1995/1996) fiscal year.

Reforestation fees, together with forest royalties, are among the mandatory fees that forest concessionaires must pay to the government. The fees are determined by the volume and the species of timber harvested.

Djamaludin said this year's reforestation funds are still intact.

As of Dec. 31, 1995, unused funds collected by the ministry reached Rp 2.6 trillion. Interest on the amount reached Rp 796 billion, of which Rp 500 billion will be used to fund the rice field project in Central Kalimantan. (pwn)