Newsprint price to increase by 9.48% next month

JAKARTA (JP): The government has allowed producers to raise newsprint prices by 9.48 percent to Rp 1,270 (58.28 U.S. cents) per kilogram next month due to increases in production costs, Minister of Industry Tunky Ariwibowo said here yesterday.

In a hearing with Commission VI of the House of Representatives (DPR), Tunky said the increase is inevitable as production costs have risen by 15 percent following the recent 50-percent increase in the prices of materials for newsprint production.

He explained to the commission, which deals with manufacturing, mining and energy industries, that the price of pulp has soared by 64 percent to US$180 per ton and used paper by 55 percent to $420 per ton.

The new prices of newsprint announced by the government yesterday is exactly the same as the ones unilaterally introduced early this month by the state-owned PT Kertas Leces and the Indonesian-South Korean joint-venture PT Aspex Paper -- the only local newsprint producer.

The unilateral decision by the two companies drew protest from the Newspaper Publisher Association (SPS), the main user of the paper.

The association claimed that the increase would cause losses to them because they would find it hard to justify raising the prices of their newspapers.

The two sides, the producers and the association, then held negotiations under the supervision of the officials of the Ministries of Industry, Trade and Information. However, the negotiations ended up dead-locked as neither of them were willing to soften their demands.

Commenting on the dead-lock, Tunky said the two parties had been required to submit their demands and suggestions to the related ministries, so that the government could take appropriate action.

"Until now, I have not yet received their reports and suggestions after the dead-locked negotiations," Tunky told journalists during a break.

Tunky promised that as compensation, the government will lower import duty on newsprint as long as it does not endanger domestic producers.

Currently the government imposes a 20-percent duty and a five- percent surcharge on newsprint imports. (rid)