Indonesian panel manufacturers hit by slump in demand
According to Bloomberg News, the Japanese economy
declined sharply in January to March 2009, with GDP
falling an annualized 15.2%. Meanwhile, Channel News
Asia reported US housing starts and building permits
dropped by 3.3% from March to April 2009 to an annual
rate of 494,000 units. The statistics, announced by the US
Commerce Department, showed the lowest results since
the data began to be collected in 1959. The weak demand
for products in both the US and Japan continue to hit
Indonesian plywood and panel-products manufacturers
hard.
However, as local spending expands rapidly and with GDP standing at 4.4% for the first quarter of 2009, Indonesian timber product manufacturers were beginning to look to the local market to help mitigate the recession, as consumer confidence reached a four-year high in April 2009. Bloomberg News reported that consumer spending increased sharply by 5.8% in the first quarter of 2009, from 4.8% in fourth quarter of 2008.
APHI warns too many levies hurt Indonesian competitiveness
The Association of Indonesian Forest Concessionaires (APHI) has indicated total levies on forest-based industries, including those imposed by local governments, account for more than 30% of the production cost of local forestry companies. APHI officials said the levies are not only a burden to forestry companies but also render Indonesian timber products less competitive in comparison to Malaysia and China’s timber products. According to The Jakarta Post, total levies imposed on timber products in neighboring countries in Southeast Asia stand at 15% or less.
In addition, the levies could amount to as much as USD30 per m³ for every USD100 per m³ of timber product sold. There are a total of 28 types of levies imposed on Indonesian timber products, ranging from property taxes to forestry commissions. Moreover, the federal government mandates that timber product manufacturers must source their raw materials from production forests instead of natural forests. As a result, manufacturers have lost access to an important raw material supply. Current output from production forests are on a decline.
Statistics compiled by the Central Statistics Agency (BPS), indicated that Indonesia’s exports of plywood have declined from a high of USD3.4 billion in 1997 to USD1.5 billion in 2008. Both sawnwood and other timber product exports have also dropped by value from 1997 to 2008. A forecast by the Association of Indonesian Wood Panel Producers (Apkindo) indicated that the plywood industry could contract by another 40% in 2009.
Indonesia Log Prices
However, as local spending expands rapidly and with GDP standing at 4.4% for the first quarter of 2009, Indonesian timber product manufacturers were beginning to look to the local market to help mitigate the recession, as consumer confidence reached a four-year high in April 2009. Bloomberg News reported that consumer spending increased sharply by 5.8% in the first quarter of 2009, from 4.8% in fourth quarter of 2008.
APHI warns too many levies hurt Indonesian competitiveness
The Association of Indonesian Forest Concessionaires (APHI) has indicated total levies on forest-based industries, including those imposed by local governments, account for more than 30% of the production cost of local forestry companies. APHI officials said the levies are not only a burden to forestry companies but also render Indonesian timber products less competitive in comparison to Malaysia and China’s timber products. According to The Jakarta Post, total levies imposed on timber products in neighboring countries in Southeast Asia stand at 15% or less.
In addition, the levies could amount to as much as USD30 per m³ for every USD100 per m³ of timber product sold. There are a total of 28 types of levies imposed on Indonesian timber products, ranging from property taxes to forestry commissions. Moreover, the federal government mandates that timber product manufacturers must source their raw materials from production forests instead of natural forests. As a result, manufacturers have lost access to an important raw material supply. Current output from production forests are on a decline.
Statistics compiled by the Central Statistics Agency (BPS), indicated that Indonesia’s exports of plywood have declined from a high of USD3.4 billion in 1997 to USD1.5 billion in 2008. Both sawnwood and other timber product exports have also dropped by value from 1997 to 2008. A forecast by the Association of Indonesian Wood Panel Producers (Apkindo) indicated that the plywood industry could contract by another 40% in 2009.
| Indonesia Log Prices |
||
| Indonesia logs, domestic prices | US$ per m³ | |
| Plywood logs | Face Logs | 186-229 |
| Core logs | 167-200 | |
| Sawlogs (Meranti) | |
174-235 |
| Falcata logs | |
142-176 |
| Rubberwood | |
32-62 ⇑ |
| Pine | |
157-196 |
| Mahoni (plantation mahogany) | |
470-496 ⇓ |
| |
||
| Indonesia Sawnwood Prices | ||
| Indonesia, construction material, domestic | US$ per m³ | |
| Kampar (Ex-mill) | AD 3x12-15x400cm | 170-189 |
| KD | 193-227 | |
| AD 3x20x400cm | 218-241 | |
| KD | 222-247 | |
| Keruing (Ex-mill) | AD 3x12-15x400cm | 234-248 |
| AD 2x20x400cm | 220-238 | |
| AD 3x30x400cm | 200-219 | |
| |
||
| Indonesia Plywood Prices | ||
| Indonesia ply MR BB/CC, FOB | |
US$ per m³ |
| 2.7mm | |
403-460 ⇓ |
| 3mm | |
359-400 ⇓ |
| 6mm | |
316-380 ⇓ |
| MR Plywood (Jakarta), domestic | ||
| 9mm | |
253-264 ⇓ |
| 12mm | |
245-255 ⇓ |
| 15mm | |
234-248 ⇓ |
| |
||
| Other Indonesia Panel Prices | ||
| Indonesia, Other Panels, FOB | |
US$ per m³ |
| Particleboard | Export 9-18mm | 216-227 ⇓ |
| Domestic 9mm | 191-203 | |
| 12-15mm | 182-193 | |
| 18mm | 172-184 | |
| MDF | Export 12-18mm | 253-266 ⇓ |
| Domestic 12-18mm | 233-244 ⇓ | |
| |
||
| Indonesia Added Value Product Prices | ||
| Indonesia, Mouldings, FOB | |
US$ per m³ |
| Laminated Boards Falcata wood | 302-314 ⇓ | |
| Red Meranti Mouldings 11x68/92mm x 7ft up | ||
| |
Grade A | 494-528 ⇓ |
| Grade B | 449-470 ⇓ | |