Newsprint price to increase 35% next month

Newsprint price to increase 35% next month

JAKARTA (JP): The producers and consumers of newsprint agreed
yesterday on a 35.88 percent increase in the price of newsprint
to Rp 2,310 (US1.03) per kilogram for the July-September period,
from the current level of Rp 1,700.

"After next month's price increase, I hope there will be no
newsprint crisis anymore," Minister of Industry Tunky Ariwibowo
told journalists after chairing the negotiations between
newsprint producers and newspaper publishers -- the main consumer
of newsprint.

The minister added that the new price of newsprint will only
be effective from July 1 through Sept. 30, which will also affect
book publishers.

Tunky said the new "reasonable" price was expected to attract
new investors to the newsprint industry.

"A bigger number of producers will provide more choices to
the consumers and will generate more market competition," he
added.

Indonesia at present has three newsprint producers, the state-
owned PT Kertas Leces in East Java , PT Aspex Paper and PT Gede
Karang of the Post Kota Group in West Java. However, PT Gede
Karang started limited newsprint production only recently for use
by its own publishing group.

On hand at yesterday's negotiations were executives from the
Association of Pulp and Paper (APKI) and the Association of
Newspaper Publishers (SPS) as well as officials from the
ministries of industry, trade and information.

"There were no pressures from any party, and we negotiated
freely," Lee Won Je, president of Aspex Paper, said. He added
that the two parties -- SPS and APKI -- will meet again in the
future to negotiate newsprint prices for October.

Kusmadi, president of Kertas Leces, said earlier that his
company's production costs stood at Rp 2,320 per kilogram, while
Lee hinted that his company's production costs were lower than
those of Kertas Leces but higher than the current newsprint price
of Rp 1,700.

Since mid-1994, local newsprint prices have increased from Rp
1,170 a kilo in August to Rp 1,270 for the September-December
period of last year, up again to Rp 1,320 for the January-March
period, Rp 1,320 for April, Rp 1,700 for May and June and lastly
Rp 2,310 for the August-September period.

President Soeharto suggested on Tuesday that, in view of the
current high newsprint price, publishers reduce the number of
newspaper pages rather than raising sale prices.

Subrata, director general of press and graphics at the
Ministry of Information, said the price increase of newsprint
will surely affect newspaper publishers. Small publishers
especially will suffer, as newsprint normally constitutes 30 to
35 percent of their total production costs.

"I hope this increase will not reduce the number of newspapers
or their circulations," Subrata said.

Currently Indonesia has 287 publishers of both newspapers and
magazines, with some 13 million copies in circulation. According
to the Ministry of Industry, all the publishers need 12,000 tons
of newsprint per month, of which Aspex Paper supplies 10,500 tons
and Kertas Leces supplies the rest.

Leo Batubara, head of SPS's special task force on newsprint,
said SPS-owned PT Inpers trading firm would be reactivated to
handle newsprint orders from newspaper publishers, especially
those outside Java. (rid)