Publishers protest against price hike of newsprint

JAKARTA (JP): Paper producers and newspaper publishers yesterday failed to reach agreement on a proposed increase in the price of newsprint.

Following a unilateral announcement by paper producers that they would raise the newsprint price as of early this month, publishers protested and the two parties held negotiations here yesterday under the supervision of officials of the Ministries of Industry, Trade and Information.

The only local newsprint producers, the state-owned PT Kertas Leces and the Indonesian-S. Korean joint venture PT Aspex Paper, announced earlier this week an increase in their newsprint price from Rp 1,160 (53 U.S. cents) to Rp 1,270 per kilogram, effective as of Sept. 1.

According to Lee Won Je, the managing director of Aspex Paper, the producers no longer wished to suffer losses caused by the increase in the prices of imported raw materials.

Newsprint producers utilize used paper and pulp.

Lee said that the price of used paper has increased from $110 to $170 per ton since July, causing a 15-percent increase in production costs.

Referring to the production cost increase, the producers plan to further increase the newsprint price to Rp 1,320 per kilogram in December.

Postpone

The secretary general of the Newspaper Publisher Association (SPS), Leo Batubara, said yesterday that the paper producers should postpone their unilateral decision to increase the newsprint price until a compromise is reached.

Yesterday's 2.5-hour negotiation ended up deadlocked because neither of the two parties was willing to soften their demands.

Producers said that they would suffer losses if the price was not raised.

Meanwhile, Batubara said the increase would cause losses to publishers because they would find it hard to justify raising the prices of their newspapers.

If paper producers do raise their prices, the government should help publishers by reducing protectionist measures for them against imports, he said.

The government, in its attempt to protect domestic producers, imposes a 20-percent duty and a five-percent surcharge on newsprint imports.

Batubara suggested that the government lower the import duty to five percent.

"The heavy protection has led to the high price of newsprint at a time of oversupply on the domestic market," he said.

Kertas Leces and Aspex Paper produce 23,000 tons of newsprint per month, while domestic demand is estimated at 12,000 tons.

Gatot Ibnu Santoso, the director of paper and cellulose industries at the Ministry of Industry, said yesterday that the publishers' demand for the import duty reduction would be passed on to the Minister of Finance.(05)