The Association of Indonesian Furniture and Handicraft Producers [AMKRI] supported the Government who consistently prohibit export of log. Chairman of AMKRI Soenoto, after closing the International Furniture Expo [IFEX] 2014 on Monday [17/3]. The policy of log exporting was against the downstreaming plan proclaimed by the Government. If export of logs were opened, national furniture and handicraft industry would be threatened to bankcruptcy, the way it happened to furniture and rattancraft industry some years ago which was even today not fully recovered.
Strong and continual insistence from small groups of businesspeople from the forestry sector who insisted the Government to export log, made the Director General of Forestry, Ministry of Forestry Bambang Hendrayono to be more resolute than ever to open export valve for logs. Bambang also disclosed that the standard price proposed by the Ministry of Trade, would be managed by the Ministry of forestry.
Some months ago the Ministry of Forestry through the Dir. Gen. of Forestry Business Development, Ministry of Forestry Bambang Hendroyono signaled to support log exporting. He was scheming up some pre-requirements in wood exporting. "We have to assure sufficiency of raw materials for local need first, then only export. Even the log exported must be of certain quality," Bambang said in a National Discussion Forum entirtled, "The future of Industrial Forestry Management in Indonesia."
A good industry was an industry with strong back up of raw materials for the long run. In case of furniture industry and handicraft especially those wood based, the commitment to urge the Government to stop exporting raw materials was the right step because the raw materials were strategic commodities.
In regard to that matter AMKRI pled all parties concerned especially the Government as regulator to support and enhance better growth, by running productive policy instead of counter productive act. Pursuant to that matter AMKRI appreciated the Ministry of Forestry who consistently prohibit export of log.
AMKRI also appreciated the Ministry of Industry who stated that the idea to export log was not relevant to the present condition. The Ministry of Industry saw big opportunity to develop wood industry at home. Moreover this industry accommodated high labor. Today the Government was focusing attention on increasing added value starting from the upstream. If log were exported, domestic industry would be injured.
The Ministry of Trade did not permit export of log, in spite of strong insistence by businessplayers of the forestry sector to open export valve of log. Deputy Minister of Trade Bayu Khrisnamurti believed that if logs were exported, might as well the Government was not being consistent in promoting added value for domestic industry.
The Ministry of Trade planned to increase added value of Indonesian commodities and log was rated as having low added value. The Government believed that it would be more advantageous if woods were managed first at home. Moreover the Government had issued regulations which prohibit export of raw mineral ore and rattan.
So far there were still many circles who insisted the Government to re open export valve for log. The reason varied, among others re opening of export valve for log would stimulate growth of industrial plant forest, people's plantation forest and communities would be encouraged to invest, because price of domestic wood would fluctuate to follow international price. They reasoned that export of logs would increase prices of logs at home in accordance with international market price.
To refer to the matrix of furniture industry development and national handicraft in utilizing raw materials as guarantee of supporting development of wood industry as proposed by AMKRI, the plan to re-open export valve of log must be prevented, because the raw material resources would be drained the way it happened to rattan.
Staging of the Indonesia International Furniture Expo [IFEX] 2014 and National Seminar discussing the role of design and marketing of furnitures, would enhance innovation and creativity of national furniture producers, designers and institutions and other related parties, so it was expected that in the future they would be able to produce premium products of high added value and be one of the strongest producers in the global market.
The Secretary General of AMKRI Abdul Sobur stated that IFEX took place in time when export of Indonesian furniture and handicraft was in high season. Indonesia had more than 4,000 UKM small business while the domestic market was fast growing. Meanwhile sales volume of domestic furniture and handicrafts came to more than USD 700 million per year and export of furniture was posted at USD 1.7 billion in 2013.
With enormous natural resources and competent human resources, supposedly Indonesia was the leader in furniture industry in ASEAN. Considering the favorable investment climate in Indonesia and AMKRI's plan to increase export target of furniture and handicraft products to USD 5 billion in the next 5 years should not be hard to attain. (SS)
Business New - March 21, 2014