M. Hasan defends export monopoly over plywood
M. Hasan defends export monopoly over plywood
JAKARTA (JP): The Association of Indonesian Wood Panel Producers (Apkindo) defended Saturday its plywood export monopoly to prop up plywood prices on the world market.
Apkindo's chairman, Mohamad (Bob) Hasan, told journalists that under Apkindo's marketing system, plywood producers can now enjoy high prices.
He said plywood prices have now increased by about $40 per cubic meter from last month's average level of $350. However, the current prices are still far from a record of $560 in the third quarter of 1993.
When Apkindo became the sole distributor of plywood in 1983, the average price of plywood was less than $200 per cubic meter.
"We are playing with the supply and demand to further push up plywood prices," Hasan told journalists at the presentation of an ISO 9001 certificate, from Lloyd's Register Quality Assurance of Britain, to his engineering and construction company, PT Inti Karya Persada Teknik, on Friday evening.
Hasan promised that this year's plywood exports will enjoy a rise, either from their value or volume.
When speaking at Apkindo's marketing meeting early this month, Hasan predicted that Indonesia's plywood exports could reach a record high of $8 billion this year because major plywood importing countries are recovering from economic recession.
Indonesia, the world's largest plywood exporter, produces about 10 million cubic meters annually, most of which are exported to Japan, South Korea and the United States.
Exports of wood products, mostly plywood, usually account for 14 percent of Indonesia's total annual export earnings. However, export revenues from plywood fell by 10.48 percent during the January-October period of last year to $3.13 billion from the corresponding period of 1993.
Blame
In a hearing with the House of Representatives' Commission on Trade and Logistics last month, Minister of Trade Satrio B. Joedono blamed Apkindo's rigid marketing system for the drop in the plywood exports and suggested that the system needs revision.
When asked about Joedono's criticism, Hasan said: "No, it's not true. When I met Pak Billy, he didn't say so and I think Pak Billy didn't mean it." Billy is a popular name for Joedono.
Under the Apkindo system, plywood producers cannot export directly. They must notify Apkindo's overseas offices of their stocks available for export. The overseas trading arms, which receive orders from importers abroad, then distribute the orders among the producers and handle deliveries.
The association's trading arms have covered major importing countries, including Japan, China, Hong Kong, South Korea, Britain, the United States, Singapore and Middle East countries.
According to its critics this system lengthens the marketing chain and unnecessarily adds to the price of plywood. Apkindo's marketing monopoly has rendered the marketing managers of about 200 plywood companies idle and forced many plywood firms to abandon marketing promotion activities.
Chairman of the East Kalimantan chapter of the Indonesian Forestry Society, B.S. Suba, said last month that 90 percent of 23 plywood plants operating in the province might stop operation due to difficulties in exporting their products.
Commenting on the critics, Hasan said on Friday evening that Apkindo's trading system is not meant to undermine any single company but to make Indonesia, as the world's largest plywood exporter, able to control plywood prices.
Hasan also denied Suba's argument, saying that 98 percent of the 135 plywood plants in Indonesia are sound and have no problems at all with exporting their products. "And I heard most of the companies are out of stocks."
He explained that problem-ridden plywood companies have nothing to do with the marketing of their products but with internal conflicts among their shareholders instead.
Asked on tight competition from Malaysia and Papua New Guinea, which undercut Indonesia's plywood prices, Hasan said: "It's all right. I'm sure we can handle it, and I'm happy if Malaysia and Papua New Gain export plywood instead of logs."
Hasan explained that by exporting plywood, the two countries will not be able to supply enough logs to plywood plants in Japan, South Korea, Taiwan and Singapore.
"When there are not enough raw materials, the owners of plywood plants in Japan, South Korea and Singapore will, sooner or later, close and relocate their production facilities," Hasan said. (rid)