Indonesia

H.M. Mansur
Indonesian Pulp and Paper Association, Jakarta

General economic condition

Population	200 million (4 February 1997)
Life expectancy	48 years (1970s), 62 years (1994)
Poverty rate	60 percent (1970s), 14 percent (1995)
Literacy	77 percent (1995)
Birth rate	2.32 percent (1970s), 1.66 percent (1993), 1 percent (2000), 0 percent (2020)
GDP	US$ 8 billion (1969), US$ 198.2 billion (1995)
GDP growth	8.07 percent (1995), 7.75-8 percent (1996)
Income per caput	US$ 75 (1970s) US$ 1 023 (1995)
Minimum wage	US$ 2.20 per day
Inflation	8.64 percent (1995), 6.47 percent (1996)
Foreign investment	US$ 8.1 billion (1993), US$ 23.7 billion (1994), US$ 39.9 billion (1995)
Paper consumption	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)

1995		Production	Imports	Exports	Consumption
Pulp		2 022 120	511 850	576 200	1 957 770
Waste paper		700 000	1 054 150	0	1 754 150
Paper		3 425 800	140 110	924 520	2 641 390
	- Newsprint	243 250	3 980	54 780	192 450
	- Writing and printing	1 061 100	26 380	442 000	645 480
	- Sack kraft	114 260	460	9 290	105 430
	- Liner and fluting	1 060 270	24 630	179 440	905 460
	- Boards	766 200	5 200	200 380	571 020
	- Cigarette paper	21 280	5 770	1 710	25 340
	- Wrapping paper	42 840	16 770	770	58 840
	- Household paper	53 950	1 060	11 880	43 130
	- Other paper	62 650	55 860	24 270	94 240
1996		Production	Imports	Exports	Consumption
Pulp		3 101 220	768 540	1 406 360	2 463 400
Waste paper		834 900	2 627 700	0	3 462 600
Paper		4 140 710	166 960	1 215 570	3 092 100
	- Newsprint	255 960	27 480	54 440	229 000
	- Writing and printing	1 332 350	13 600	577 850	768 100
	- Sack kraft	119 020	4 670	7 290	116 400
	- Liner and fluting	1 290 180	50 960	263 640	1 077 500
	- Boards	943 000	4 930	268 430	679 500
	- Cigarette paper	22 280	4 190	570	25 900
	- Wrapping paper	55 100	13 640	3 040	65 700
	- Household paper	58 460	1 140	12 200	47 400
	- Other paper	64 360	46 350	24 110	82 600

The years 1995-96 were marked by low and depressed prices, causing companies 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	30.3 million ha
For conservation and national parks	18.7 million ha
For production and industrial	64.4 million ha
For production and conversion	30.5 million ha
Total	143.9 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 great and enormously significant. At the same time, Indonesia has to safeguard the role of Indonesia's tropical forests as part of the life lungs 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 work 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 begin to mature. Many areas are now already having matured trees, which are ready for harvesting and/or are already harvested.