April 1997 FO: ACPWP 97/2

ADVISORY COMMITTEE ON PAPER AND WOOD PRODUCTS

THIRTY-EIGHTH SESSION

Rome, 23 - 25 April 1997

THE STATE OF THE INDUSTRY

INDONESIA

General Economic Condition
Population

Life expectancy

Poverty rate

Literacy

Birth rate

GDP

GDP growth

Income per caput

Minimum wage

Inflation

Foreign investment

Paper consumption

200 million (4 February 1997)

48 years (1970s), 62 years (1994)

60 percent (1970s), 14 percent (1995)

77 percent (1995)

2.32 percent (1970s), 1.66 percent (1993), 1 percent (2000), 0 percent (2020)

US$ 8 billion (1969), US$ 198.2 billion (1995)

8.07 percent (1995), 7.75-8 percent (1996)

US$ 75 (1970s) US$ 1 023 (1995)

US$ 2.20 per day

8.64 percent (1995), 6.47 percent (1996)

US$ 8.1 billion (1993), US$ 23.7 billion (1994), US$ 39.9 billion (1995)

13 kg/caput (1994), 14 kg/caput (1995), 15.5 kg/caput (1996)

Indonesia's Pulp and Paper Industry (1995-1996)

Pulp, Waste Paper and Paper Production, Import, Export and Consumption, 1995-1996

(metric tons)
1995Production ImportsExports Consumption
Pulp2 022 120 511 850576 200 1 957 770
Waste paper700 000 1 054 1500 1 754 150
Paper

- Newsprint

- Writing and printing

- Sack kraft

- Liner and fluting

- Boards

- Cigarette paper

- Wrapping paper

- Household paper

- Other paper

3 425 800

243 250

1 061 100

114 260

1 060 270

766 200

21 280

42 840

53 950

62 650

140 110

3 980

26 380

460

24 630

5 200

5 770

16 770

1 060

55 860

924 520

54 780

442 000

9 290

179 440

200 380

1 710

770

11 880

24 270

2 641 390

192 450

645 480

105 430

905 460

571 020

25 340

58 840

43 130

94 240

1996Production ImportsExports Consumption
Pulp3 101 220 768 5401 406 360 2 463 400
Waste paper834 900 2 627 7000 3 462 600
Paper

- Newsprint

- Writing and printing

- Sack kraft

- Liner and fluting

- Boards

- Cigarette paper

- Wrapping paper

- Household paper

- Other paper

4 140 710

255 960

1 332 350

119 020

1 290 180

943 000

22 280

55 100

58 460

64 360

166 960

27 480

13 600

4 670

50 960

4 930

4 190

13 640

1 140

46 350

1 215 570

54 440

577 850

7 290

263 640

268 430

570

3 040

12 200

24 110

3 092 100

229 000

768 100

116 400

1 077 500

679 500

25 900

65 700

47 400

82 600

The years 1995-96 were marked by low and depressed prices, causing companies with low profits and losses.

Based on the completion of new projects and renovations and expansions, it is estimated that 1995-96 investment in the pulp and paper industry was about US$ 5 billion. Sales-wise, the Indonesian pulp and paper industry is now a US$ 5 billion business.

Issues

As officially stated, the government has divided the Indonesian forests into the following categories.

For protection forest

For conservation and national parks

For production and industrial

For production and conversion

30.3 million ha

18.7 million ha

64.4 million ha

30.5 million ha

Total143.9 million ha

As FAO Forestry Statistics 1995 indicated, the area has decreased to 115.7 million ha, therefore the government has stressed the effort to recover the 143.9 million ha by introducing among others HTI project.

The development of HTI is encouraging and quite in progress. The government also stresses the stricter implementation of sustainable forest development, stricter implementation of each category's purpose, to reach a forest development and conservation, and subsequently to conform with accepted standards of environment and operation and certification.

The harvesting of wood from natural forest is continuously reduced, from 27 million m3 per year to 22.5 million m3 per year in 1993-98 and will be reduced further to 18 million m3 per year in 1998-2003.

The Indonesian forests cover 70 percent of Indonesia's land mass. Therefore, their role and impact to the well-being of Indonesia and its people is very great and enormously significant. At the same time, Indonesia has to safeguard the role of Indonesia's tropical forests as part of the lifelungs of the world. The Government of Indonesia is confident and is striving that the Indonesian forests can be maintained as a sustainable resource for economic development. The active works of HTI, such as for cellulose-based trees and for palm oil trees, has given life support to a great number of people as well as the socio-economic growth of the areas involved.

As has been explained, from the industry's point of view, the most important result of the HTI programme is the sustainability of fibre and wood source for the industry. Although there will be a slight fibre and wood shortage within these few years for the industry, the shortage is filled by imports and will ease when the trees planted are beginning to mature. Many areas are now already having matured trees, which are ready for harvesting and/or are already harvested.

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