Small publications to get cheaper paper

JAKARTA (JP): PT Aspex Paper, the country's largest newsprint producer, has agreed to give a 30 percent discount to small-scale publishing companies.

However, the newsprint to be sold to the small publications would be of lower quality, or BB grade, than that sold to other companies, Aspex president Lee Won Je said yesterday.

"We agreed to sell the newsprint at Rp 1,500 (18 U.S. cents) per kilogram less than the normal price to small publishers," Lee said after a meeting between the associations of newsprint producers and newspaper publishers.

The meeting was mediated by Minister of Industry and Trade Mohamad "Bob" Hasan.

Before the meeting, Lee announced to reporters that the company had agreed to cut its prices by 20 percent to the small companies.

But the newly appointed Hasan, whose group largely controls PT Aspex, several minutes later ordered Lee during the media briefing to increase the discount to 30 percent.

"Can Aspex increase (the discount) by 10 percent?" said timber baron Hasan, followed by a room full of laughs.

Hasan said he could only ask the newsprint producers to negotiate with publishers, as the government could not subsidize the industry.

Aspex sells the undiscounted newsprint at US$505 per ton. This price was fixed at yesterday's meeting for the next three months.

Lee said his company, however, would only allocate 350 tons of newsprint a month -- out of its monthly production of 7,500 tons -- to small-scale publishers.

The secretary-general of the Newspaper Publishers Association, Leo Batubara, said that amount would not be enough to cover all small-scale publishers.

He said about 70 percent of the country's 286 companies needed the discount. These include publications whose monthly newsprint consumption did not exceed 10 tons. Most of these companies were located without Java, he said.

"Ideally, Aspex should allocate about 1,050 tons of discounted newsprint to help all the needy companies, but it said it could only meet about a third of the demands," Leo said.

At yesterday's meeting, the price of newsprint sold by another producer, PT Kertas Leces, was fixed at US$500 a ton for the next three months.

Leces president Supardi said his company currently sold under the set price, based on negotiations on the quality of its products, as it had begun new production in January.

Other producers, including PT Gede Karang of the Pos Kota group, PT Adi Prima of Jawa Pos Group, PT Setia Kawan and PT Suparma, will sell their products at prices based on negotiations.

All the prices would use the rupiah-dollar conversion rate at the close of trade on the Friday prior to the transaction.

The prices will be effective April through June this year.

Monthly domestic supply amounts to 15,000 tons, of which 7,500 tons comes from Aspex, 3,500 tons from Leces and the remaining 4,000 tons from the other four companies.

The rupiah's free-fall against the US dollar has threatened the survival of the press industry which is susceptible to fluctuations in the rupiah's exchange rate as prices of imported newsprint had increased by about 270 percent since last July.

Burdened by the price hike and less advertising, many smaller publications have shut down, while larger ones have either reduced the number or size of their pages. (das)