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)