Timber companies to be reduced to 50 by 2003
Timber companies to be reduced to 50 by 2003
JAKARTA (JP): The government plans to consolidate the timber
industry by reducing the number of forest concession holders from
437 to 50 within the next five years to boost efficiency, a
minister said yesterday.
Minister of Forestry Djamaludin Suryohadikusumo said the
consolidation measures were necessary for both state and private
companies to strengthen their businesses.
He said it was better to have a smaller number of large timber
companies than many weak ones. Mergers would make timber
companies more competitive in the global market, he added.
"It would be better if Indonesian forests were managed by 50
big concessionaires, not by over 400 small concessionaires, due
to the decreasing forest area and a more competitive market,"
Djamaludin said after a ceremony in which he received foreign aid
to combat forest fires.
He said the merger of forest concession holders would improve
the management of forests in a sustainable manner and would
create stronger cooperation between timber companies.
"Managing larger areas of forests will be more profitable and
more economical. Timber companies have to own large areas which
can support their efforts in managing forests in a sustainable
manner," he said.
He added that a smaller number of concession holders would
make it easier for the government to supervise the industry.
Indonesia has 143 million hectares of forests, including 64
million hectares of productive forests. There are currently 437
private forest concessionaires managing 61.7 million hectares of
forests under the auspices of the country's state timber
companies.
The remainder of the nation's forest is directly controlled by
the government through its six state timber companies -- PT
Inhutani I to V and Perum Perhutani -- and the government's
forestry services.
Djamaludin said another option to strengthen the timber
industry was to list companies on the stock exchange.
Log export
Speaking to reporters after an inaugural ceremony for the
appointment of new directors for the state timber companies,
Djamaludin said the government's recent decision to reduce the
export taxes of log exports to a maximum of 10 percent would not
create a scarcity in the supply of logs in the domestic market.
"Most timber estates are tied in contracts to supply logs to
local processed-wood industries. They have been joint partners
for such a long time," he said.
He also said the decrease in the tax would not prompt timber
companies to export their logs. Timber companies prefer
purchasing processed-wood products which have a higher value, he
said.
"Besides that, log prices in foreign markets are currently
very low, about US$60 per cubic meter. It would not be profitable
for timber companies to export logs nowadays," he said.
The government reduced export taxes on logs, sawed timber and
rattan to a maximum of 10 percent from Feb. 1 as a part of its
agreement with the International Monetary Fund.
The government previously imposed an export tax of 200 percent
on logs, aimed to encourage timber companies to fulfill local
demand and to force buyers to purchase Indonesian local processed
wood.
To dissuade companies from excessively exporting logs, the
government announced a new regulation last month stating that
concession holders and wood-processing industries were allowed to
export logs or other wood products only if they have allocated at
least 5 percent of their products to the domestic market. (gis)