Printing group derides government coddling of paper producers
JAKARTA (JP): Paper-based industries yesterday cried for an end to the protectionist policies that benefit pulp and paper producers at the expense of consumers like the publishing industry.
"The recent 65 percent increase in the price of paper was more due to deliberate actions by the Indonesian Pulp and Paper Association (APKI) rather than genuine market factors," said H.M. Fauzi Lubis, chairman of the Indonesian Printing Company Association (PPGI) at a press-conference here yesterday.
He added that government policies allow APKI to price gouge in the domestic market while the price of their exports stays low, because the government levies duties and value added taxes worth about 40 percent of the sales price of imported paper.
"As a result, we have to pay APKI's paper at price levels equivalent to the prices of imported paper plus the levied duties and tax," he said, adding that paper accounts for about 70 percent of printers' total production costs.
Fauzi said the domestic price of HVS paper in April, for example, reached Rp 2,474/kg (US$1.18), which indicated a 65- percent hike from last September. In comparison, the price of similar paper exported to the United States in April was only Rp 650/kg (31 U.S. cents). HVS is a very popular paper for copiers and typed documents.
According to APKI figures, domestic paper consumption was about 1.84 million tons in 1993, which is 10 kilograms per capita annually, the lowest in the region.
Also present at the press conference yesterday were representatives from various paper-based industry groups, including the Association of Indonesian Publishers, Association of Indonesian Corrugated and Carbon Industries, Association of Indonesian Note Book Producers, Association of Computer-paper Printers (Aspertaskom), Federation of Packaging of Indonesia, the Indonesian Book Society and the Association of Indonesian Newspaper Publishers.
At the same occasion, Untung S.W., an executive of Aspertaskom and director of PT Royal Standard, presented newsmen with copies of various documents showing that APKI acts as a virtual cartel with its members colluding on the price of domestic paper.
For example, one document, entitled "The Consensus for The Price of Printing Paper", was signed on April 7 by executives of 12 companies including PT Indah Kiat, PT Tjiwi Kimia, PT Surya Agung Kertas, PT Pindo Deli, PT Parisindo Pratama, PT Kertas Leces, PT Kertas Basuki Rachmat, PT Suparma, PT Setia Kawan, PT Pura Barutama and PT Jaya Kertas.
The document sets the price of several types of paper, including HVS 55-120 grams. The price of this paper was set in two different price groupings: one at Rp 2,325/kg in sheet form and Rp 2,275/kg in roll form and the other at Rp 2,225/kg in sheet and Rp 2,200/kg in roll.
According the document, the first price grouping applies to paper supplied by Indah Kiat, Tjiwi Kimia, Surya Kertas, Pindo Deli and Parisindo Pratama.
The second price grouping of the same type of paper was charged for paper produced by Kertas Leces, Basuki Rachmat, Kertas Blabak, Suparma, Setia Kawan, Pura Barutama and Jaya Kertas.
It was only last week when Suresh Kilam, an APKI and Indah Kiat executive, told Kompas daily that paper and pulp producers "are ready to be punished" if "evidence showing that collusion between paper and pulp producers takes place can be produced."
Biggest
The paper-based industry groups also stated that it is about time the country's pulp and paper producers stop being subsidized by high taxes on imports, saying that Indonesia is one of the biggest paper exporters in Southeast Asia.
APKI projects that exports of pulp and paper will likely increase by 41.7 percent to $550 million this year, from $338 million last year.
This year's exports of paper are expected to rise by 12.8 percent to 650,000 tons or, in terms of value, by 14.8 percent to $400 million from last year, APKI said in a hearing with Commission VI of the House of Representatives (DPR) in February.
"It is clear that APKI members will be able to maintain high profits even after the protectionist measures are abolished," Fauzi added. "This country's pulp and paper producers are no longer infants needing protection."
He also said the government's protection for paper producers is not consistent with other goals of development programs, such as the promotion of non-oil exports and the Nine-Year Compulsory Schooling Program, which is scheduled to be announced next month.
Fauzi also warned that if paper prices remains under APKI's, and not the market's, control "plenty of schoolchildren from all over this country won't be able to buy new notebooks."
He added that he will register a complaint with the Indonesian Chamber of Commerce and Industry (Kadin). (04)