Publishers seek end to monopoly

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)