Newsprint prices set after tight negotiations

Newsprint prices set after tight negotiations

JAKARTA (JP): The Association of Indonesian Pulp and Paper
Producers (APKI) and the Association of Indonesian Newspaper
Publishers (SPS) have agreed to cut the new price of newsprint to
between US$500 and $505 a ton.

Minister of Industry and Trade Tunky Ariwibowo said yesterday
that the new prices, which will be effective from Jan. 1 to March
31, were settled after lengthy and tight negotiations.

The price of newsprint was last set at $535 a ton on Oct. 3.

Under the agreement, newsprint producer PT Aspex Paper will
sell newsprint for $505 a ton, while state-owned PT Kertas Letjes
will sell it for $500 a ton. Other newsprint producers will sell
the paper based on negotiations.

The associations also agreed to use the average rupiah-dollar
exchange rate from the previous week as the base for
transactions.

The associations held three meetings prior to the agreement to
negotiate prices. The Ministry of Industry and Trade acted as
mediator in the negotiations.

Representatives of the two associations said yesterday they
were satisfied with the new prices.

"We finally agreed on something that was fair. If we're going
to lose, we'll both lose, and vice versa if we profit," SPS
chairman Leo Batubara said yesterday.

PT Aspex Paper president Lee Won Jie said the agreed price was
costly to newsprint producers, but said his company would improve
efficiency to reduce production costs.

"This will save us from losing money," Lee said.

The monetary crisis, which has lowered the value of the
rupiah by about 60 percent since July, has made newsprint
expensive. The rupiah's depreciation partly contributed to the
rise in the newsprint price to Rp 6,025 per kilogram this month
as compared to Rp 1,254 per kilogram in January and Rp 1,304 per
kilogram in March this year.

The sharp rise threatens the susceptible press industry which
has already seen several publications shut down in the past
month.

At least two major dailies had cut several pages because of
the price hike.

Batubara said the negotiations were tough because APKI
insisted on adjusting the prices with the increase in production
costs.

"APKI argued that production costs rose 80 percent, while we
estimated it at 27 percent," he said

Lee said production costs rose sharply as producers had to
import newsprint's raw material -- recycled newspapers.

PT Aspex Paper has to allocate 7,500 tons of its product for
the domestic market monthly, while PT Kertas Letjes will supply
3,500 tons locally every month.

Other newsprint producers will provide 4,000 tons for the
domestic supply. (das)

Photo -- Page 10