Local producers stand up to influx of imports

JAKARTA (JP): An influx of cheap imported paper onto the domestic market has not yet affected local producers, a senior Ministry of Industry and Trade official said on Wednesday.

Gatot Ibnu Santoso, the ministry's director general of chemical, agricultural and forestry products, said the imported paper would not hurt local producers because it was mostly of a lower quality than paper produced in the country.

He acknowledged that paper products from several countries, particularly Russia and Chile, have been selling for low prices in Indonesia.

Some of the imported paper has been sold in Indonesia for prices around 40 percent lower than local paper products, he said.

"The volume of paper imported from these two countries is still small in terms of volume. Therefore it is not adversely affecting local producers," Gatot told reporters after the opening of a paper exhibition at his ministry.

An official from PT Balabak Kertas, a state paper company, said that paper products imported from Russia and Chile sold on the local market for Rp 4,500 per kilogram, much lower than the rate of Rp 7,000 rupiah per kilogram commonly charged for local products.

Gatot said the price of local paper products has declined by more than 50 percent following the rupiah's recent rally against the U.S. dollar.

The rupiah has strengthened to a range between Rp 7,000 and Rp 8,500 against the dollar in recent weeks. In August it was trading at around Rp 11,000.

Gatot said that HVS paper was now selling for Rp 14,000 per pack whereas several months ago it cost Rp 40,000 per pack.

Indonesia has 16 pulp plants with a total production capacity of 3.3 million tons a year and 74 paper factories with a total production capacity of 7.2 million tons a year.

"Indonesia exports paper products to several Asian countries, including Singapore, Malaysia, the Philippines, Thailand, South Korea, Taiwan, Hong Kong, China and India." he said. (29)