Newsprint price raised by over 20 percent

Newsprint price raised by over 20 percent

JAKARTA (JP): The price of newsprint will be increased by more
than 20 percent to Rp 1,600 (73 U.S. cent) a kilogram next month,
a move press executives fear will lead to sharp increases in the
price of newspapers.

The increase, which had been largely expected because of
soaring international pulp prices, was announced by the Ministry
of Information yesterday.

There is more bad news for the newspaper industry further down
the road. The price for newsprint will further increase to Rp
1,700 a kilo in May and June.

The price is currently Rp 1,320 a kg.

The government took over the matter of setting newsprint
prices after negotiations between the Association of Newspaper
Publishers (SPS) and the Association of Pulp and Paper Producers
(APKI) reached a deadlock on March 22-23.

"The increases have the approval of both SPS and APKI,"
according to the announcement by the Ministry of Information.

Director General for Press and Graphics Subrata yesterday
presided over a meeting with other government officials and
representatives of the two associations to announce the
increases. Also attending was Sujata, the Director General for
Basic Chemical Industry of the Ministry of Industry, Antara news
agency reported.

The increase will be particularly hard on small and struggling
newspapers already under pressure from stiff competition from
other newspapers, magazines and the onslaught of commercial
television stations. Many of them would find it difficult to pass
the increase in costs on to consumers without affecting
readership.

Subrata said that as part of the deal, APKI has pledged to
subsidize the transportation of up to 1,000 tons of newsprint
from the plant to the publications' printers for May and June.

He said small, less established newspapers, will be given
priority for the subsidy. "SPS will determine the mechanism."

APKI Executive Director Kahar Haryopuspito said after the
meeting that the increase had been unavoidable because of the
higher costs of pulp. "But compared to the price of newsprint
abroad, the price in Indonesia is still cheaper."

Although Indonesia is one of the world's largest pulp and
paper producers, its industry uses imported pulp from recycled
newspaper as its raw material for newsprint production.

Indonesia's newsprint is supplied by PT ASPAC, which has a
monthly production capacity of 16,000 metric tons, and PT Leces
with a capacity of 3,000 tons. ASPAC exports part of its product
while Leces has recently reduced its newsprint capacity in favor
of higher quality paper. Domestic demand for newsprint is put at
around 12,000 tons a month.

SPS's Chief of Facility and Management Roesilah Kasiyanto said
the publishers' association accepted the price increase.

SPS currently has 284 members but only 20 percent of them
could be regarded as established, Roesilah said.

She acknowledged that the increase will lead to newspapers
rising their prices charged to readers. "Some newspapers in fact
have already raised their prices." (emb)