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)