Revocation of timber concessions will 'hurt' plywood industry

JAKARTA (JP): The government's recent move to revoke the concessions of several timber companies will severely hurt the country's plywood industry, according to the Indonesian Forestry Society.

The society's general chairman, Sudradjat Dp., said on Friday at least five plywood mills had stopped producing due to the scarcity of logs, the main raw material.

"Although they are not large industries, the difficulties will affect the export market," Sudradjat was quoted by Bisnis Indonesia as saying.

He said that the number of plywood producers facing closure due to the lack of log supply would increase within the next few months.

The government revoked early this month eight forest concessions and will not extend 13 others which expired next March because they were allegedly obtained through corruption, collusion and nepotism (KKN).

The concessions total 2.53 million hectares.

Most of the forest concessions were held by former president Soeharto's family and close friends.

The society questioned the criteria in determining the involvement of a timber company in KKN.

He charged the government's move was intended to punish certain companies.

"If we want to be fair, almost all of the country's forest concessions are KKN-tainted. But why are only certain companies' concessions being suspended?" he said.

The Ministry of Forestry and Plantations has so far awarded 50 logging contracts which cover more than 61 million hectares of forest throughout the country. Most of the concession rights were awarded to Soeharto's family and close friends, including golf buddy Mohammad "Bob" Hasan.

Plywood, a wood panel product, is the country's second largest non-oil and non-gas foreign exchange earner after textiles and textile-products. Indonesia, the biggest plywood producer, produces 10 million cubic meters of plywood annually, 80 percent of which is exported.

The society forecasts that plywood exports will contribute US$8.5 billion from eight million cubic meters of volume this year in line with increasing prices and demands. (01)