Timber industry badly needs revitalization

The Jakarta Post, Dec 19, 2005:

Timber industry badly needs revitalization

Anissa S. Febrina, The Jakarta Post, Jakarta

With only 10 percent of the timber-processing companies declared by

the foresty ministry to be performing adequately, the country's wood

industry badly needs revitalization, non-governmental groups say.

The ministry recently announced its assessment on the national timber

industry, involving some 140 registered companies, of which three

were declared "excellent" and 11 categorized as "good."

"But according to our assessment, the companies are merely the best

of a bad lot," Greenomics Indonesia's program coordinator Vanda Mutia

Dewi said last week.

Greenomics, along with another non-governmental organization

Indonesian Corruption Watch (ICW), conducted a study on the

performance of the country's timber industry, including the 11 "good"

ones.

The study revealed that only two of the plywood manufacturers had

sound financial records and only one had "high efficiency".

ICW vice coordinator Luky Djani explained that most of the companies

had also exceeded their limit of raw material consumption.

A timber-processing company is required to submit a plan for its

annual raw material consumption to be approved by the forestry

ministry.

"Those that exceeded their consumption plan should be questioned

because currently the industry is facing a supply problem for

timber," Luky said.

Vanda added that the ministry should tighten its supervision on the

matter, especially since it concerned the legality of the raw

materials.

Efficiency wise, she said, there were few companies performing

well. "The ministry only requires the relatively low efficiency

rating of 50 percent," she said.

A timber-processing company with an efficiency rating of 50 percent

can only process half of the raw material it consumes, leaving the

rest as waste.

The same resource-based industry in developed countries has been able

to produce zero waste, or a 100 percent efficiency rating.

"It is partly due to a lack of investment in machinery. Our industry

has been relying on old machines for years," Vanda said.

The domestic timber industry has found difficulties actually

committing financial resources or getting loans to revamp its

equipment due to the notorious image it had, Greenomics executive

director Elfian Effendi said previously.

Greenomics and ICW suggested that the forestry ministry reveal the

rest of the poor performing companies if it were to start supporting

revitalization of the industry.