Publishers protest against price hike of newsprint

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)