Medan newspapers on brink of bankruptcy

Medan newspapers on brink of bankruptcy

MEDAN, North Sumatra (JP): Five weekly newspapers in Medan are
on the brink of bankruptcy due to skyrocketing newsprint prices,
a publisher said yesterday.

Chairman of the provincial branch of the Association of
Newspaper Publishers (SPS) Faudin Daulay said the five weeklies
had already reduced the newspaper from 12 to eight pages.

"We are facing a bitter situation, we are just waiting for our
death," said Daulay.

The five ailing weeklies are Demi Masa, Dobrak, Bintang Sport
Film, Taruna Baru, and Persada.

After a lengthy and tough negotiation, the Association of
Indonesian Pulp and Paper Association (APKI) and SPS agreed last
month to set a new price of newsprint at about US$550 per ton.

The rupiah's sharp depreciation against the dollar is the main
reason for the price hike, and SPS has said that APKI was too
selfish in determining the price.

"The price of newsprint rose from Rp 1,600 per kg to Rp 2,780.
This is a heavy burden for us," said the editor of the weekly
Demi Masa.

Apart from the weekly newspapers, the province also has seven
daily newspapers among them Sinar Indonesia Baru, Analisa, and
Waspada.

"We call for the understanding of government officials and
Armed Forces officers in helping reduce or even stopping free
newspapers being sent to them," the provincial SPS said in a
statement last week.

It said many publications in the city would have to shut down
if the government did not pay serious attention to assist them.

"Newsprint demand in Medan is at least 400 tons per month,
mostly supplied by PT Aspex," Daulay said.

Daulay also hopes the government will stop the 10 percent
value-added tax of newspapers to reduce its heavy burden.
(21/prb)