Publishers seek end to monopoly
JAKARTA (JP): Newspaper publishers and book printers, faced with a crisis in newsprint supplies, asked the government yesterday to intervene to alleviate what they said were monopoly conditions in the paper market.
"We ask that the market monopoly will not be used as an opportunity to seek the largest possible profits ..." said the acting chairman of the Association of Newspaper Publishers (SPS), Handjojo Nitimihardjo.
"The intervention of the government is needed to prevent a further monopolization," Handjojo said at a hearing with the House of Representatives's Commission I, which is in charge of information and international affairs.
At yesterday's hearing, SPS executives were joined by leaders of the Association of Indonesian Book Publishers (IKAPI) and the Union of Press Graphics.
Newspaper publishers held a national congress on Monday to discuss the newsprint shortage. They told reporters that there supplies would not last longer than one week.
Only two factories produce newsprint in Indonesia, state-owned PT Kertas Leces and PT Aspex Paper. The former's product cannot accommodate color prints.
Despite an assurance from Minister of Industry Tunky Ariwibowo yesterday that the factories could supply an annual 300,000 tons of newsprint at the government-set price of Rp 1,700 (US$1.32) per kilogram, Handjojo said that publishers "still have no idea where the paper is."
After meeting with President Soeharto here yesterday, Tunky said he had requested Aspex, the supplier of 80 percent of domestic newsprint needs, to reduce its exports and add to its supply of newsprint for the domestic market by between 2,000 and 14,000 tons this month.
Tunky said he would meet with executives of SPS, IKAPI and the Association of Pulp and Paper Producers (APKI) at his office today to discuss paper supply and price stabilization, since the price of Rp 1,700 only applies until the end of this month.
He hinted that the government would not intervene in negotiations between SPS and newsprint producers in setting prices.
"If they cannot reach agreement, SPS can import newsprint, because the government has cut the tariff on newsprint from 20 percent to five percent," Tunky said.
Tariff
Meanwhile, chairman of the Association of Indonesian Journalists, Sofyan Lubis, yesterday called on the government to lower the tariff on newsprint to zero, which is the level applying to high-quality paper.
Newsprint prices are projected to increase steadily with the rising prices of raw materials, waste paper and pulp on the world market. According to the Ministry of Industry, the price of imported waste paper is currently US$410 per ton, as compared with $110 in the first quarter of last year; while the price of short-fiber pulp has increased to $1,000 a ton from only $400 in the first quarter of last year.
Informed sources at APKI said newsprint producers want the newsprint price to be increased to Rp 2,500 a kilo because the production cost has increased to Rp 2,300 a kilo.
Gatot Ibnu Santosa of APKI was quoted by Antara as saying yesterday that with the newsprint price of Rp 1,700 a kilo, Kertas Leces may suffer a loss of Rp 40 per kilo.
"So far we cannot suggest our own estimate on the best price for newsprint but we can do so tomorrow after meeting with Minister Tunky," Handjojo told reporters. He defended his association's apparent indecisiveness in the face of the crisis engulfing its members, referring to the industry's dependence on the two newsprint producers.
"If the factories said they could not deliver newsprint at our suggested price, then all of us (publishers and reporters) standing here would be dead, wouldn't we?" Handjojo said.
He said on Monday that his association only asks for a "rational" price by the producers. However, the head of SPS's task force on newsprint, Leo Batubara, said that for years SPS's members had had only the producers' word on costs.
"We don't really know the details of production costs," he said. "We do know that the price of newsprint in the warehouses of the manufacturers, through which we import newsprint, is now set at Rp 2,300 per kg, so that local prices are too expensive."
SPS appealed for House members' support in urging producers to heed the cries of small publishers, which make up 75 percent of its membership.
"We used to have a cross subsidy mechanism in which large publishers paid the transport costs for small publishers from newsprint factories," said Batubara. "We have not been able to help each other (in this way) since the free market policy for newsprint was introduced in October 1991."
Monday's national congress of newspaper publishers appealed for "large publishers to help small ones," but left the details to individual companies.
Book publishers said their fate was worse, as they have no direct access to producers and must buy newsprint for making schoolbooks at market places.
"Yesterday the price was Rp 2,650 per kg, and this morning agents said it was already Rp 2,700," said the chairman of the book publishers association, Rozali Usman.
House members urged the government to take measures to ensure adequate supplies and also to control prices.
"What's the use of statements on paper supply when the paper is not around," said Didiet Haryadi of the ruling Golkar faction.
"If this problem continues, it will damage the government's image," he said.
Legislators said they regretted the contradiction between President Soeharto's repeated promotion of the habit of reading and the "lack of goodwill" on the part of the government in relation to the paper industry and trade.
"We agree that newsprint must be classified as one of our basic needs," said Soerjo Handjono, who is also a member of the Golkar faction in the House of Representatives.
Meanwhile, Minister of Information Harmoko expressed optimism that the crisis would be short-lived. He pointed to recent government measures, such as freeing waste paper imports and slashing the newsprint import tariff from 20 percent to five percent.
"Now all that is needed is coordination between the Ministry of Industry, SPS and paper producers," he said. (anr/rid)