Players of the forestry were optimistic export of Indonesia’s forestry products would increase after the implementation of some regulations which supported export of Indonesian woods to some countries. Suryo Bambang Sulisto, Chairman of the Indonesian Chamber of Commerce (KADIN) disclosed to Business News in Jakarta on Monday (7/5/2012); he stated that export of Indonesian legal wood to Europe rose by 25% this year before application of Certification of Verification of Wood before application of Certification of Verification of Wood Legality (SLVK) which would be effective next year. Suryo disclosed that each year Uni Europe imported wood and paper worth USD 1.2 billion from Indonesia which constituted 15% of Indonesia’s total wood export.
Player of the forestry industry, according to Suryo, needed to strengthen competiveness because the Union European Timber Regulations would be effective as per March 2013 so wood legality would be needed. As known today, 210 wood producers in Indonesia had pocketed the SLVK certificate as pre-requirement for export of wood. The policy was meant to be put in effect in Europe would affect competitiveness of our forestry products” Suryo was quoted as saying.
The Indonesian Chamber of Commerce (KADINI), Suryo said, set target to be no 1 player in forestry industry in 2030. This was to consider that Indonesia had strong comparative advantage. According to Suryo, KADIN would strive to improve the forestry industry that it might grow better and eliminate the perception that forestry was the sunset industry in the roadmap and vision of 2030. He was optimistic that Indonesia could be the leading player in that industry in the world because once Indonesia commanded over plywood market in America, England, and Japan till 2001.
He rated that Indonesia had the potential to be the leading player in the pulp and paper industry. Today the development of pulp industry in the world was drifting from North America to Latin America and Asia especially China and Indonesia. Unfortunately the business and investment and most of the business players of the world tend to chose Brazil as their new investment location. Yet the total area of industrial forest in Indonesia was 59 million hectares which could ne the resource of raw materials for pulp and paper.
He predicted that Indonesia could be no 4 or no 5 player in the pulp industry and no 8 player in paper industry by 2015 or even to be no 1 in pulp production replacing the USA in 2030 provided the Government supported growth of the industry. Among the support expected from the Government, Suryo said, was reformation in regulation, revitalization of industrial machineries, capitalization, and infra structure development. “This was indispensable and imperative if Indonesia aimed at becoming no 1 pulp producer in the world” Suryo remarked.
He rated that the Government was still at least in supporting the forestry sector. The result was that Indonesia’s competitiveness in agriculture was way below China. Price disparity between Indonesian wood products and that of China was also wide. Yet the forestry industry was reliant on renewable resources so it could be highly prospective instead of otherwise. According to Suryo, there were four natural resources which were highly prospective, namely agriculture, forestry, fishery and plantation.
He disclosed that competitiveness was closely related to regulations. The absence of a one-stop service center was one of the reasons why disparity of competitiveness and pricing was so wide. Similarly as machines were not revitalized it created problems of its own. Capital injection from banks was also scarce, just as infra structure was inadequate which hindrance production process and increase production cost. “As long as the incentives to strengthen competitiveness was not fulfilled there is little hope that the forestry industry would develop” Suryo concluded.
Business News - May 11, 2012