Perhutani to sell veneer straight to users

JAKARTA (JP): State forestry company Perum Perhutani said yesterday that it would sell its veneer, a surface layer for plywood products, directly to plywood producers from next month.

The company's marketing director, Bambang Soebijantoro, said the contract given to PT Sari Permindo Lestari to distribute the veneer to members of the Association of Indonesian Wood-panel Producers (Apkindo) would expire on July 1.

"Plywood producers can buy veneer directly from Perum Perhutani beginning July 1," Soebijantoro said, adding that the decision was made to eliminate all market distortions in the plywood business.

Perhutani at present is still required to sell 17,000 cubic meters of its veneer production to PT Sari Permindo Lestari, which then distributes the veneer products to Apkindo members.

Soebijantoro said the sale of the veneer products through Sari Permindo, an Apkindo affiliate, has been widely criticized by Apkindo members. Some received more than they needed while others got less than they required, he said.

He said that for Perhutani, the requirement to sell more than 85 percent of its veneer products to Apkindo had prevented it from benefiting from increasing prices in overseas markets.

"We could not export veneer because we had to supply Apkindo members. The rest of our production was used by the state wood industry," Soebijantoro said.

He said Perhutani produced around 20,000 cubic meters of veneer annually, which made it the country's main producer of the product.

Meanwhile, Soebijantoro said the company enjoyed a windfall in its revenue due to the rupiah's sharp depreciation against the U.S dollar.

He said that Perhutani reaped Rp 527.37 billion (US$37.67 million) in revenue from January until mid June this year, or about 56 percent of its target for the year.

He added that the results were 40 percent higher than the Rp 375.21 billion for the same period last year.

"The increase in revenue was partly due to the increase in teak wood prices in both local and overseas markets," Bambang said.

He said that the company's exports from January until mid June reached Rp 176.12 billion, up from Rp 105.75 billion in 1997. Most of the increase came from selling US$60 million worth of garden furniture overseas.

Bambang said that the company expected Rp 1.01 trillion in revenue, up 14.6 percent from Rp 881 billion the previous year. Some Rp 941.73 billion of this is expected from sales of wood and wood products.

Perum Perhutani, founded in 1972, currently manages some 2.5 million hectares of forests on Java, Bali, West and East Nusa Tenggara, most of which are teak plantations.

The company, which has teak and pine plantations as its core business, earns 75 percent of its total revenue from the sale of teak.

About 71 percent of Perhutani's export earnings came from the sales of finished teak and other timber, and the remaining 29 percent from nonwood forest products such as gum resin and turpentine. (gis)