Indonesia is heavily dependent on cotton import for fulfilled supply for spinning industry. The scarcity of cotton supply in Indonesia from 1993 to 1995 posed difficulties on textile and clothing producers in the country in obtaining cotton and synthetic fiber supply.
Indonesia's cotton imports has so far been managed by several shippers like Collon of the USA, Daiwa, KIA, Nisho Iwai, and several other Japanese companies as well as International Kokkon, a shipper from Uzbekistan.
Indonesia's cotton import rose from 454,000 tons in 2004 to 570,000 tons in 2005, but the import value was down from US$686 million in 2004 to US$427 million in 2005.
Most of imported cotton supply has so far been received from the United States (31.37%), and the rest come from Australia (19.87%), Brazil (8.80%), South Africa (5.30%), India (2.74%), Pakistan (2.80%), and several other countries.
The biggest cotton consumer in Indonesia is the spinning industry, especially industrial company’s that produce yarn with 100% of their basic material consisting of cotton fiber. Other kinds of yarn that consume much cotton are tetoron cotton (TC) and CVC. The other cotton consumers of cotton are cosmetics industry, which produce cosmetic cotton that only consume around 2% from total consumption.
INTRODUCTION
In Indonesia, timber industry is facing serious shortage in supply of wood raw material as a result of the government policy of tightening regulation to preserve the country’s dwindling tropical forest. The government has launched intensive operations against illegal logging and smuggling, which have partly been responsible for the extensive damage to the country’s natural forests. However, the government policy of imposing tighter logging quota has also contributed to rampant illegal logging involving timber processing companies which could not rely on legal sources for log raw material.
Amid the growing difficulties, pulp industry managed to continue expansion and increase production. The past five years saw a significant growth in the country’s pulp production. Good prices on the domestic and international market have boosted the industry. Scarcity in raw material supply is still a threat but pulp industry fares better than other timber processing industries as it could use trees from private-owned forest, plantation forest (HTI) in addition to natural forest.
A number of pulp making companies have collapsed over heavy debt burden in the wake of the monetary crisis in 1997/1998, but many such as the Sinar Mas Group and the Raja Garuda Mas Group, have succeeded in overcoming the impact of the crisis. PT Kiani Kertas is now seeking to sort out its debt problem with its creditors mainly state Bank Mandiri.
PULP PRODUCERS
In Indonesia have 20 pulp producers with a total production capacity of 6.3 million tons and 10.4 million tons of paper per-year. It placed Indonesia as 9th largest of pulp producers and 12th largest of paper makers in the world.
INDAH KIAT PULP AND PAPER
PT Indah Kiat Pulp and Paper is the largest pulp maker in the country. The company is placed in Riau-Sumatera Island, with production capacity 1.8 million tons per year, its mean 29% from the country total capacity. The company is part of Sinar Mas Group that has 7 pulp and paper manufacturer in the country.
RAJA GARUDA MAS GROUP
This company group is also a major pulp and paper producer. It is controlled by APRIL (Asia Pacific Resources International Holding Ltd.). Among its pulp and paper producing subsidiaries is PT Riau Andalan Pulp and Paper with production capacity 1.3 million tons per-year or 21% from the country’s total capacity. Other subsidiaries include PT Toba Lestari, formerly known as PT Inti Indorayon Utama.
PT KIANI KERTAS
Kiani Kertas is facing debt repaying problems to the Bank Mandiri, the state-owned bank and now in the process of restructuring. The Banks plans to sell the company to recover their non-performing loan. The company valued assets around US$ 788 million and its debts are around US$ 400 million.
LIST OF INDONESIAN PULP PRODUCER, 2006
(Names of company, Location, Production capacity tons/year)
- PT Indah Kiat Pulp and Paper, Riau, 1.8 million
- PT Riau Andalan Pulp and Paper, Riau, 1.3 million
- PT Lontar Papyrus Pulp and Paper Industry, Jambi, 850 thousand
- PT Kiani Kertas, Berau, 550 thousand
- PT Tanjung Enim Lestari, Muara Enim, 450 thousand
- PT Wirakarya Sakti, Kuala Tungkal, 430 thousand
- PT Toba Pulp Lestari, Porsea, 240 thousand
- PT Kertas Kraft Aceh, Lhok Nga, 165 thousand
- PT Pakerin, Mojokerto, 145 thousand
- PT Bekasi Teguh, Bekasi, 90 thousand
- PT Kertas Leces, Probolinggo, 72 thousand
- PT Polapulpindo Mantap, Lampung, 42 thousand
- PT West Kalindo, Kalimantan, 39.6 thousand
- PT Eureka Aba, Mojokerto, 30.5 thousand
- PT Basuki Rahmat, Banyuwangi, 10 thousand
- PT Kertas Blabak, Magelang 5.4 thousand
- PT Pura Nusa Persada, Kudus, 5 thousand
- PT Kertas Padalarang, Bandung, 3 thousand
Referring to lack of wood timber raw material in the country, pulp industry remains to show good performance. In the past five years the capacity utilization of pulp industry has remained high at around 80%.
In 2000 the country’s pulp production totaled 4.1 million tons, up 15% to 4.7 million tons in 2001. The tightening of logging quota caused a decline of 0.4% in 2004, but in 2005 the production rose again to 5.5 million tons.
EXPORT MARKET
Indonesia has exported part of its pulp production. In 2000, exports of pulp were valued at 1.3 million tons valued at US$ 710.6 million, up to 1.7 million tons but down in value to US$ 564 million in 2001. In the next two exports rose further to each 2.4 million tons valued at US$ 791 million in 2003. In 2004, exports fell to 1.67 millions tons, but in 2005 exports surged again to 2.55 million tons valued at US$ 932 million.
Exports of pulp by Indonesia are dominated by the type of chemical wood pulp, soda or sulfate bleached of non-coniferous. In 2003, exports of pulp of this type totaled 2.37 million tons at US$ 789.1 million or 99.8% of the country’s total exports.
The main countries of destination for the country’s exports of pulp are Asia countries such as China, South Korea, Japan, Taiwan, Vietnam, and India. In Europe the main countries of destination are Italy, the Netherlands, France, and Germany.
IMPORTS MARKET
The country still needs to import pulp and tended to increase. Imports market are relatively small, only 17% of the local consumption. In 2000, imports of pulp totaled 617,804 tons valued at US$ 395 million, up to 825,704 tons in 2002 but down in value to US$ 373 million.
Imported pulp is put in 16 different tariff categories. The type of chemical wood pulp, soda or sulphate bleached of coniferous dominated of imports, and followed by the chemical wood pulp dissolving grade, which is used mainly by rayon fiber industry.
Imports of pulp have come mainly from Canada, Brazil, South Africa, and the United States.
LOCAL MARKET
Local consumption of pulp, 95% is for paper industry, and followed by rayon fiber industry from 3.8 million tons in 2005. It was decrease 14.2% form the 2004 for 4.4 million tons.
