Printing group derides government coddling of paper producers
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)