Remove tariffs on newsprint: Ministries

Remove tariffs on newsprint: Ministries

JAKARTA (JP): The ministries of industry, trade and
information, as well as publishers and paper producers, agreed
yesterday to propose that the Ministry of Finance cut the import
tariff on newsprint to zero percent.

"We all have agreed to propose to the Minister of Finance on
the reduction of the import tariff on newsprint from the current
level of five percent to zero percent, a level already applied to
high quality paper," Minister of Industry Tunky Ariwibowo said
after a meeting on ways to counter the current paper crisis.

Yesterday's meeting was attended by officials of the three
ministries and executives from the Association of Newsprint
Producers (SPS), the Association of Indonesian Pulp and Paper
(APKI) and the Association of Indonesian Book Publishers
(APKI).

Handjojo Nitimihardjo, SPS's acting chairman, hailed the
agreement on import tariff reduction, saying that "in the long
run, it will be good for newspaper publishers".

Only Lee Won Je, managing director of PT Aspex Paper, which
supplies 80 percent of all domestic newsprint needs, declined to
say much about the proposal to the finance ministry to lower the
import tariff to zero.

"We import almost 100 percent of our raw materials and we will
not be protected anymore. You can imagine by yourselves what will
happen to my company," Lee told journalists.

In addition to Aspex, Indonesia has only one other company
producing newsprint, state-owned PT Kertas Leces in Pasuruan,
East Java, which produces only a small amount of newsprint, about
3,000 tons per month. Besides, Leces' products cannot accommodate
color print.

Handjojo said that for the time being, even a zero percent
import tariff will not entirely resolve the current newsprint
crisis "because international prices of newsprint are
increasing."

Problem

"The problem we are facing now is on the supply," he said.
"Imagine ... some small-scale publishers just got newsprint
yesterday for tomorrow's editions," Handjojo said.

Commenting on Handjojo's complaint, Suresh Kilam, managing
director of the paper division of the Sinar Mas Group, said that
the newsprint shortage is happening only to the 200 small-scale
newspaper publishers which buy newsprint from agents, not
directly from producers. The 200 publishers need only a total of
1,000 tons per month.

"Actually newsprint producers have abided by the agreement
with SPS, allocating 12,000 tons of newsprint per month at a
price of Rp 1,700 (US$1.32) a kilo until the end of this month,"
Kilam said.

Minister Tunky called on newsprint producers yesterday to
"discipline" their agents if it is found that they are guilty of
hoarding newsprint.

Tunky said he has asked SPS to give its views on better ways
of supplying newsprint from producers to newspaper publishers and
on reasonable prices for newsprint.

Yesterday's meeting did not discuss the price of newsprint for
next month's deliveries even though the current price of Rp 1,700
per kilogram applies only until the end of this month.

Informed sources at APKI said newsprint producers want the
price to be increased to Rp 2,500 a kilo because the production
cost has increased to Rp 2,300 a kilo due to the increasing
international prices of waste paper and pulp -- a raw material
for newsprint production.

Tunky yesterday repeated his assurance to the public that
"stocks for newsprint are adequate, factories are running
normally and there is no problem at all with raw materials."
(rid)