Indonesian Political, Business & Finance News

Realization of timber estates far below target

Realization of timber estates far below target

JAKARTA (JP): Forestry companies given concessions to develop timber estates to support their pulp and paper plants have so far planted less than a quarter of the 4.05 million hectares of timber estates targeted by the government.

According to a statistical report of the Ministry of Forestry's Directorate for Forest Management Supervision, as of Dec. 1995, forestry companies had managed to develop only 519,781 hectares or 13 percent of the 4.05-million-hectare target since the government started issuing concessions for pulp-timber estates in 1989.

From the planted areas of 519,781 hectares, 493,508 hectares or 95 percent were located within the areas of 13 concessionaires that the government initially gave pulp-timber estate concessions to.

The Ministry of Forestry, after issuing permits to the 13 concessionaires in 1989, stopped issuing new permits for environmental reasons. Timber estates, which can start being harvested between this year and 1998, are expected to reduce burdens on natural forests.

Forestry experts recently predicted that Indonesia's pulp industry will soon face shortages of raw materials.

The 13 concessionaires developing pulp-timber estates are PT Tusam Hutani Lestari, which is currently collaborating with state-owned PT Inhutani IV in Aceh; PT Indonusa Indrapuri, with Inhutani IV in Aceh; PT Inti Indo Rayon Utama in North Sumatra; PT Wirakarya Sakti in Riau; PT Arara Abadi Indah in Riau; PT Riau Andalan Pulp and Paper in Riau; PT Musi Hutan Persada, with Inhutani II in South Sumatra; and PT Menara Hutan Buana, with Inhutani II in South Kalimantan.

The concessionaires operating in East Kalimantan are PT ITCI Hutani Manunggal, PT Surya Hutani Jaya, PT Tanjung Redep and PT Adindo Foresta, all of which are collaborating with Inhutani I. The other concessionaire is the Enzo Forest Development Corporation, which cooperates with Inhutani III in West Kalimantan.

When pulp and paper prices on the international market began going up early last year, the government decided to resume issuing licenses for pulp-timber plantations.

Proposals

So far, nine additional forestry companies have submitted their proposals to the ministry, requesting permits to develop pulp-timber estates. To obtain the permits, the government has stipulated that the companies must have already built pulp- production factories beforehand.

The report, a copy of which was obtained by The Jakarta Post yesterday, shows that the nine companies, which have gained temporary permits, will be allotted 1.42 million hectares of land to be used for their timber estates. So far, however, they have planted only 26,273 hectares.

The nine firms that have already submitted proposals are PT SSPI and PT Kumala Karya Lestari in North Sumatra, PT Intan Prima Cell in Riau, PT Pakerin in South Sumatra, PT Sinar Alam Lestari and PT Dharma Tri Eka S. in East Kalimantan, PT Sinar Kalbar Raya and PT Citra Jaya Industri in West Kalimantan and PT Guhara Lestari Cell in Southeast Sulawesi.

Indonesia's pulp and paper industry, which currently has a production capacity of 1.04 million tons a year, needs some 5.2 million cubic meters of timber a year. Raw materials for the industry are presently still obtained from small-sized wood from land-clearing and forest conversion projects. (pwn)

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