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)