National book production in continuous decline

By R. Masri Sareb Putra

JAKARTA (JP): May 1996 has been proclaimed National Book Month. This is necessary considering that books are not on most Indonesians' shopping lists.

One indicator is national book production. It declined continuously between 1991 and 1994. (see table). In the 1980s a title could sell 5,000 copies in two years. Now publishing houses don't risk runs above 3,000 copies. A book that sells 2,000 copies in a year is considered a best seller.

The table does not truly reflect the situation today because in the 1980s there were more publishers producing smaller runs.

There is now an estimated 470 productive publishers producing between 100 and 200 titles a year. The annual turnover of a small publisher is about Rp 1 billion (US$425,531), a mid-size publisher between Rp 5 and Rp 15 billion, and a big publisher between Rp 15 and Rp 60 billion.

The book publishing industry has a turnover comparable to the pharmacy industry.

The book market is not as slack as often reported. The production decrease is not sufficient evidence to conclude that purchasing power is low, because publishers have increased the price of their products in line with the fluctuations of the price of paper.

Paper makes up only 30 percent of production cost, the remainder being overhead costs.

The publishers' ability to calculate market potential has decreased production runs. Indonesian publishers can now make accurate projections to avoid oversupply.

Indonesia is far behind other countries in book production. According to the National Library, national book output between 1982 and 1991 amounted to only 24,259 titles. That is an average of 2,400 titles a year. As far back as 1987, Malaysia published over 4,000 titles a year, Thailand nearly 8,000, Japan 40,000 and South Korea 43,000.

Indonesia is not among the top 20 developing countries in science and technology because reading is not popular here. Other aspects are production, distribution and utilization.

Struggle

Book publishers in Indonesia have always struggled. From its establishment on May 17, 1950, the Association of Indonesian Publishers had to compete with the foreign publishing houses still rooted in the new country.

At the 1956 Printing Industry Congress, association chairman A. Notositardjo reported on the Indonesian printing industry's situation. Of the 793 printing houses operating in the country, 339 were owned by indigenous people and had a total capacity of 750,845-square meters; 378 were owned by Indonesian Chinese and had a capacity of 1,068,984-square meters; and 76 were owned by the Dutch and had a capacity of 1,106,453-square meters.

The space imbalance prompted the government to nationalize all publishing house with Law No.86/1958. The Dutch publishing houses of J.B. Wolters, W. Versluys, Noordhoff and H. Stam were taken over as state enterprise Pradnya Paramitha. In 1973, it became a limited company.

Indonesian book publishing developed in Java and Sumatra. The publishers' political struggle yielded results when their association took over Dutch publishing houses which, despite Indonesia's independence, were still allowed to continue their business in Indonesia. After the Indonesian government took over all Dutch companies, the publishing industry started a new life.

The government pushed the development of national publishers. Until 1966 nearly 100 percent of the books in education, teaching, sciences and general knowledge were produced by national publishers. Only reference and higher education books were imported.

A slump hit publishers in 1996 due to the political situation. The industry was hit hard when the government ceased all forms of subsidy, including paper subsidies. Forced to buy paper at market prices, the book publishing industry stagnated after a brief 10 year boom.

Other obstacles

Other crucial limitations, such as Indonesians' lack of interest in reading, the low level of paper consumption (5.7 kgs per family a year), purchasing power, tight competition with other information technology and tax problems, have blocked publishers.

Upon urging by the association, the government issued Presidential Decree No.2, 1990, stipulating that the government cover the value added tax on imports and delivery of books on general teaching and on religious text books.

The decision aims to give consumers a break, but in reality it is not much use because the price of paper increases year to year.

Value added tax is also linked to the convoluted distribution channels. A publisher cannot sell books directly to consumers but must go through a distributor and then a book store or school cooperative.

The publishers' association has also agreed that a maximum discount of 30 percent can be given by the publisher to the distributor. However, to support cash flow, the publisher is allowed to pay bonuses for cash purchases. The delivery cost of 5 percent is paid by the buyer.

The agreement has been violated. Many publishers, especially of school books, approach consumers directly. Moreover, discounts in excess of 30 percent are given along with various bonuses and incentives. The result is a chaotic market.

Another problem is the uneven distribution of publishers and bookshops in Indonesia.

Publishers and bookshops are concentrated in Java. Jakarta has 145 publishing houses and 190 bookshops. West Java has 28 publishers and 60 shops, East Java 28 and 36, Central Java and Yogyakarta 29 and 64. Compared to Java, publishers and bookshops in other regions are few.

The uneven distribution stems from potential market share. The concentration of publishers and bookshops in Java shows that the per capita book and paper consumption of Java is far higher than the other regions.

One role of publishers, to improve the national education as stipulated in the introduction of the 1945 Constitution and the Pancasila state ideology, has recently led the government to help regional publishers to develop.

Regional publishing houses have lost out to strong competition from big, Jakarta-based publishers. The government has therefore developed books with local content for each province to stimulate regional publishers.

The government's efforts to stimulate the publishing industry is just one factor in a complex problem that includes government regulations and deregulations, taxes, raw materials, reading interest, purchasing power and competition with electronic media.

The writer is an observer of the book publishing industry. He works for a book publishing company in Jakarta.