RI retains wood market despite export stoppage

JAKARTA (JP): Many of Indonesia's wood panel producers stopped exporting for about three weeks over the Idul Fitri period to overhaul their production facilities, a plywood executive said yesterday.

The executive chairman of the Association of Indonesian Wood Panel Producers, A. Tjipto Wigjoprajitno, said other exporting nations had not taken over Indonesia's markets during the overhaul.

Tjipto said the overhaul, which was done during the Idul Fitri holidays last month, caused a slight drop in production.

He said Indonesia would now focus its exports on European markets.

In December and January most of Indonesia's exports went to Japan.

This caused exporters to delay shipments to Europe.

"In the past the European market was rather neglected. But now we cannot delay exports to them anymore," Tjipto said.

He said Indonesia would supply the market as usual when production levels returned to normal.

Plywood, a wood panel product, is Indonesia's second largest non-oil and gas foreign currency earner after textiles and textile products.

The association's data shows wood panel exports reached 8.5 million cubic meters worth US$4 billion last year.

Up to 5.52 million cubic meters, worth $2.56 billion, went to East Asian countries, including Japan. The rest went to North America, Europe, Middle East and Asia.

The volume of wood panel exported last year was slightly lower than in 1995 when Indonesia exported 8.75 million cubic meters. But the value was higher than the $3.88 billion earned in 1995.

Plywood exports peaked in 1993 when export volume reached 9.71 million cubic meters worth $4.59 billion.

Tjipto said wood panel exports to Japan in January reached 330,000 cubic meters, of which 130,000 cubic meters were plywood.

The rest consisted of particle board and block board which are made from waste wood and small-diameter timber.

Tjipto said world demand for block board was strong.

"Apart from Japan, demand for block board has also grown in the Middle East and Europe," he said.

Block board is used mostly in the furniture industry.

Tjipto said that during the January-February period demand for block board almost doubled.

Indonesia's block board production capacity reached about a million cubic meters a year. About half of this is exported.

The association's vice chairman, Abbas Adhar, said earlier this week that Japanese businesses wanted to see Indonesian plywood price's drop because of the depreciation of the yen against the U.S. dollar.

But he said that so far the yen's depreciation had not affected the volume of Indonesia's plywood exports.

He said Indonesian plywood producers wanted to maintain prices because the yen had not dropped low enough. (pwn)