Press entering dark tunnel: Industry executive

Press entering dark tunnel: Industry executive

JAKARTA (JP): Skyrocketing prices of newsprint and the
continuing plunge of the rupiah are hurtling the press industry
into a dark tunnel with no clear light at the end of it,
according to an industry executive.

S. Leo Batubara, secretary-general of the Association of
Newspaper Publishers (SPS), told The Jakarta Post yesterday that
most print media were operating on a subsistence management level
with the mere aim of surviving the monetary crisis.

"Speaking frankly, most print media have taken to acting the
way a stall owner manages a small business, that is only for the
sake of surviving.

"They (the press) work daily with the aim of only getting
enough to help buy more newsprint and, more importantly, to
maintain their idealism," he said after announcing an agreement
on newsprint prices with producer PT Aspex Paper, the country's
largest newsprint producer.

Batubara, cofounder and former general manager of Suara Karya
daily, said most newspapers were still publishing daily, however
not for commercial reasons but because of their sense of idealism
and fighting spirit.

"Seen from the business point of view, the press industry is
dying because of the skyrocketing price of newsprint and the
decreasing number of ads. However, it (the press) has idealism.
The press still have distinguished and commendable nonbusiness
values and that is why most newspapers are determined to continue
appearing," he said.

He added that he does not expect the press industry to show
any sign of progress unless the national economy recovers.

Almost all newspapers, magazines and tabloids have reduced the
number of pages and several publications like the Indonesian
Times daily and Tiras weekly have stopped publication.

Some, like the Terbit and Berita Buana dailies, have opted to
change their format from a nine-column to tabloid.

The monetary crisis, which has seen a free-fall in the value
of the rupiah against the U.S dollar, has made newsprint
expensive, and combined with scant advertising, is quickly
driving the press industry into financial ruin.

It is estimated that two-thirds of the country's 286
newspapers and magazines are teetering on the brink of
bankruptcy.

The rupiah's depreciation has seen the newsprint price rocket
from Rp 1,254 (8.5 U.s. cents) per kilogram in January 1997 to
the most recent US$505 per metric ton (Rp 7,450 per kilogram)
since January this year.

Roesilah Kasiyanto of SPS, who accompanied Batubara at the
signing ceremony of the agreement, said a new arrangement had
been worked out for the price of newsprint for the next three
month with PT Aspex Paper at US$505 per ton under a barter
system.

The Korean company in which tycoon Mohamad "Bob" Hasan is a
major stockholder supplies about half the domestic demand for
newsprint.

"The agreement stipulates that for newsprint produced by
double and triple machines, publishers can pay $485 per metric
ton, excluding value added tax and income tax, but they must
provide advertising space worth $20 for every metric ton
purchased for Aspex's Korindo group's products.

"For newsprint produced by single machines, publishers are
obliged to pay $450 metric tons and, in compensation to PT Aspex,
provide advertising space worth $55 for each metric ton for the
group's products," she said.

All the prices would use the average rupiah-dollar conversion
rate of the past week prior to the transaction.

The Korindo Group produces various products such as footwear,
containers and plywood. (rms)