Plywood mills must restructure facilities

Plywood mills must restructure facilities

JAKARTA (JP): Plywood manufacturers need to restructure their
industrial facilities to increase their efficiency and
accommodate the country's diminishing supply of timber, A. Tjipto
Wigjoprajitno said yesterday.

The executive chairman of the Association of Indonesian Wood
Panel Producers (Apkindo) made the remark in response to the
forestry ministry's suggestion that logs be imported as raw
materials for domestic plywood manufacturers.

Minister of Forestry Djamaludin Suryohadikusumo said earlier
this month that imports will be needed if Indonesia is to
preserve its natural forests and maintain a sound supply of raw
materials for its domestic wood-based industries.

However, President Soeharto has dismissed the ministry's idea
of imports as unnecessary and called on plywood manufacturers to
restructure their production facilities to anticipate future raw
material shortages.

Manufacturers are being encouraged to engage in wood-based
businesses using small-diameter logs, such as medium density
fiberboard and particle board plants.

According to the Central Bureau of Statistics, Indonesia's
exports of plywood dropped by 11.95 percent to US$3.7 billion in
1994 from $4.2 billion in 1993. In the first seven months of last
year, exports fell again by 14.15 percent to $1.98 billion from
$2.3 billion in the same period of 1994.

Plywood manufacturers blame the decline on the low price of
plywood on the world market.

Last month, Director General of Forest Utilization Titus
Sarijanto projected that the current developments in plywood
prices would make it difficult for small plywood manufacturers to
break-even or make a profit.

Tjipto was quoted by Antara as saying yesterday that
restructuring would be difficult for most companies due to the
large sums of money involved.

Only a few large firms, including those owned by the Kalimanis
and Surya Dumai groups, are capable of processing the waste
timber, less than 25 centimeters in diameter, discharged by
plywood mills.

Tjipto also encouraged wood-based manufacturing plants to use
technologies which can increase the resilience of wood, making it
useful for plywood production. The most suitable wood for plywood
is currently meranti (shorea sp.).

Exports

Responding to reports on the temporary halt of plywood exports
to China, Tjipto said that the situation will not affect
Indonesia's exports to other countries.

He predicted that plywood exports would rise by between 5
percent and 7 percent to around $4.2 million this year from $3.99
billion last year

Plywood exports to China were reportedly suspended because of
a raw materials shortage in Indonesia. According to Tjipto, the
shortage was caused by heavy rains which held back the
transportation of timber from forests to plywood mills.

Exports to China last year, according to Apkindo, reached
800,000 cubic meters, or about 10 percent of Indonesia's total
plywood exports of 8.5 million cubic meters.

Nonetheless, Tjipto said he was optimistic that the value of
Indonesia's plywood exports would increase this year due to the
recovering economies of such importing countries as Japan, the
United States and European countries.

The increase, he said, would come from an increase in prices,
not from export volume. Tjipto pointed out that prices last year
fell to the lowest level tolerable by plywood manufacturers.
(pwn)