Sawmill firms to lay-off over 13,000 employees
Sawmill firms to lay-off over 13,000 employees
Yuliansyah, The Jakarta Post, Banjarmasin
Dozens of sawmills employing more than 13,000 workers in
Banjarmasin, South Kalimantan, may have no other choice but to
lay off workers as high production costs are making them unable
to compete on the international market.
Dehen Binti, secretary of the local chapter of the Indonesian
Plywood Society (MPI), said on Monday that most sawmills in the
city were having difficulty paying workers because of increasing
production costs coupled with a low demand for plywood on the
domestic and international markets.
"Increasing production costs have a lot to do with the rising
price of raw materials, rampant illegal fees and increasing labor
costs," he said.
Dehen said the plywood industry had been hard hit by the
cheaper price of plywood from China and Taiwan, "and we are
losing out to the competition".
"It is no longer a secret that layoffs are the probable
solution to this difficult situation," he said.
He added that many sawmills were also experiencing worse
problems because they were in disputes over communal land that
they occupied as a concession.
He said that the difficult situation was also caused by
nonlabor factors, especially a drastically decreasing demand for
Indonesian plywood on the international market.
"How can we compete if China and Taiwan can supply their
plywood to Europe, Japan and the United States 30 percent cheaper
than the price of our plywood," he said, citing that the price of
Indonesian plywood on the international market was US$400 per
cubic meter.
Muchlis, the chief of the local trade and industry office,
ruled out MPI's complaints as groundless. He said timber
factories had no plausible reason to close their operations as
the demand for plywood was still high.
He said that many sawmills were facing financial problems but
these conditions would not force them into bankruptcy.
"Our share in numerous markets remains stable and there is
nothing to worry about," he said.
Soegiannor, the chief of the local manpower and transmigration
office, said he had heard rumors of mass layoffs but that they
would not implicate the plywood industry in the province.
"We don't believe that the existing 13 sawmills in the city
will lay off their 13,000 workers."
S. Sassau, the chairman of the local chapter of the All-
Indonesia Workers Union Federation (FSPSI), agreed, saying that
they would oppose any moves by the sawmills to lay off a large
number of workers.
"We have frequently heard about mass layoffs but so far, the
sawmills have not laid one worker off," he said.