Korindo concerned about plywood prospects in 1995
Korindo concerned about plywood prospects in 1995
JAKARTA (JP): Not long after the government announced its determination to curb timber production, the Korindo Group, a major plywood manufacturer, has expressed doubts about the industry's prospects this year.
"Doubt is present in the thoughts of every plywood producer in Indonesia due to the price fluctuations and supply situations," Iskandar JR, Korindo's president, told newsmen yesterday.
According to government figures, Indonesia's plywood exports reached US$3.78 billion during the January-August period in 1994, indicating a 0.80 percent drop from the corresponding 1993 period.
The Forestry Ministry stated in its year-end report that Indonesia plans to reduce its timber output in natural forests from between 25 million to 26 million cubic meters within the last five fiscal years, which ended in March, 1994, to a new rate of 22.5 million cubic meters over the next five years.
Indonesia has faced harsh criticism over its forestry policies from various environmental organizations.
Iskandar said yesterday that there are a series of "external factors" which influence the fluctuation of plywood prices, Antara reported.
Indonesian plywood producers must manufacture their products exactly according to the quality standards set by buyers, he said.
Iskandar also said that producers must increase efficiency in their production process, especially in processing logs.
Because Indonesia bans log exports, log prices have become abnormally lower than world prices, causing a wasteful use by the plywood industry, analysts said.
Plywood analysts and industry players have mostly blamed the declining export revenues on declining purchases from traditional buyers, including Japan, China and South Korea.
While the Association of Plywood Producers of Indonesia tends to blame economic recession for the low purchases, some analysts and producers have pointed out rising competition from Malaysia as a more important factor.(hdj)