Log shortage no threat to plywood exports: Apkindo

Log shortage no threat to plywood exports: Apkindo

JAKARTA (JP): The Association of Indonesian Wood Panel
Producers (Apkindo) reassured Japanese buyers on Thursday that a
domestic shortage of logs would not hurt the plywood supply to
the country.

Apkindo's chairman Abbas Adhar attributed the scarcity to an
unusually heavy rainy season which hampered distribution of logs
from logging areas to wood-processing industries.

"If there is any decline in production, it will be very small
and will not disrupt our exports," he said after meeting
representatives of the Japanese Plywood Manufacturers Association
(JPMA).

Abbas also pledged the Indonesian plywood industry would
continue producing despite the country's unstable social and
political condition.

JPMA also buys raw plywood from Indonesia for the production
of high-quality plywood products.

JPMA's president Koichi Mataga said association members feared
a decline in plywood exports from Indonesia because it would
affect their production.

"We have read several reports that Indonesia will face a
severe shortage of its log supply in the next two or three years.
If it happens, it will disrupt plywood exports to Japan."

He said Indonesia and JPMA's members supplied over 80 percent
of Japan's total consumption of plywood annually. The rest is
imported from other plywood-producing countries.

In 1998, total consumption of plywood in the Japanese market
reached 7.18 million cubic meters, 3.3 million cubic meters of
which were produced domestically by JPMA members. The remaining
3.87 million cubic meters was imported, in which 2.33 million
cubic meters, or 61 percent, was imported from Indonesia.

The figure is much lower than in 1997, when Japan consumed 9.5
million cubic meters of plywood, producing 4.2 million and
importing 3.2 million cubic meters from Indonesia.

The lower demand was caused by Japan's economic crisis
battering the country's property and construction sector.

Mataga said demand for plywood was expected to increase this
year as the Japanese government planned to increase housing
construction to 1.3 million units from 1.2 million units last
year. Construction will need at least 7.3 million cubic meters of
plywood.

He added that the Japanese government allocated US$2.6 billion
for the crisis-hit property and construction sector in its budget
for the 1999/2000 fiscal year, beginning in April.

"Continuous supply from Indonesia is badly needed to maintain
the stable market of plywood in Japan."

Mataga said the Japanese plywood industries basically had
annual production capacity of five million cubic meters, but most
plywood manufacturers in the country were operating below
capacity due to scarcity of raw materials, including logs.

Abbas said the two associations agreed to cooperate in
stabilizing the Japanese plywood market and promoting the use of
plywood in Japan.

He acknowledged that the Japanese government imposed high
import duties, set at 8.5 percent and 10 percent on hardwood,
which hampered Indonesia in raising its plywood exports.

In a similar development, chairman of the Association of
Indonesian Concessionaires (APHI) Adi Warsita Adinegoro urged the
government on Thursday to approve the annual working plan
proposed by each timber company as soon as possible.

In the past, 40 percent of logging plans submitted by timber
companies were approved by the month of March. This year, none of
the timber companies have received approval.

The government sets annual logging quotas for each timber
company based on the plans. (gis)