***********************************************

WORLDWIDE FOREST/BIODIVERSITY CAMPAIGN NEWS

Many Timber Firms Facing Closure in Indonesia

***********************************************

Forest Networking a Project of Ecological Enterprises

http://forests.org/

10/9/98

OVERVIEW & COMMENTARY by EE

The epicentre of the East Asian economic crisis has been Indonesia,

whose timber industry has been equally hard hit. Out of tragedy comes

an opportunity to pursue more community based, and sustainable forest

and land management. The scale and intensity of harvest, which in

many cases left the land virtually barren, must be reduced to

environmentally and socially sustainable levels. Wise, restrained

long-term management of forest and other resources will be a keystone

element of economic recovery and sustainable community development.

g.b.

*******************************

RELAYED TEXT STARTS HERE:

Title: Many Timber Firms Facing Closure in Indonesia

Source: Cable News Network

Status: Copyright, contact source for permission to reprint

Date: October 6, 1998

JAKARTA (Oct. 7) XINHUA - Almost half of Indonesia's timber-related

companies may call it quits due to growing uncertainty over their

business, the Jakarta Post reported Wednesday.

The Indonesian Forestry Society's chairman, Sudradjat, Tuesday said

that at least 40 percent of the country's timber-related companies

planned to switch to more promising business sectors such as

plantations.

Depletion of the country's forest resources, the soaring prices of

timber and wood-processing equipment, high capital costs and the

government's wavering policies are the major reasons that they are

mulling leaving the industry.

"Many timber companies here no longer expect that their logging

contracts will be extended. They are preparing to enter new businesses

which they consider have better prospects, such as plantations,"

Sudradjat said.

He added that the government's plan to limit ownership of forest

assets has raised concerns because wood-processing industries would no

longer have a sufficient log supply if the legislation is introduced.

Indonesia currently has 421 timber companies, 1,701 sawmill companies,

115 plywood companies and six pulp and paper companies.

Sudradjat said that at least 156 timber companies whose logging

contracts have ended are still awaiting the government's decision on

whether the contracts would be extended.

Meanwhile, overseas demand for Indonesian plywood has shown signs of

improvement with increases in orders from several Asian countries, the

United States and Europe.

"I have checked with all of Apkindo's (the Association of Indonesian

Wood Panel Producers) member companies. Most of them have said they

have closed their doors to new contracts until the end of December.

But they will receive new orders for next year's delivery," Sudradjat

said.

Indonesia is currently the world's biggest plywood producer, with 80

percent of its annual output of 10 million cubic meters exported.

Plywood is Indonesia's second largest non-oil and non-gas foreign

exchange earner after textiles and textile products.

Apkindo targeted to earn 2.6 billion U.S. dollars from plywood exports

this year. Last year, the country's plywood exports totaled 7.85

million cubic meters worth 3.58 billion dollars.

###RELAYED TEXT ENDS###

This document is a PHOTOCOPY for educational, personal and non-

commercial use only. Recipients should seek permission from the

source for reprinting. All efforts are made to provide accurate,

timely pieces; though ultimate responsibility for verifying all

information rests with the reader. Check out our Gaia Forest

Conservation Archives at URL= http://forests.org/

Networked by Ecological Enterprises, gbarry@forests.org