The Plywood Industry in Indonesia

Author

Ali Surya, Fontbonne College

Year of Award

1995

Degree

Master of Business Administration (MBA)

College

College of Business & Professional Studies

Degree Program

Business

Department

Business Administration

Keywords

Conservation, Apkindo, South Asia, Particleboard, Forest, Woodworking, Forestry, BPT, Logging, Tropical Forests

Abstract

As Indonesia's key non-oil foreign exchange earner, wood products are essential to the economic vitality of the nation. The long-time domination of Indonesia in the world's plywood market is diminishing in 1995 by strong competition,' stricter conservation efforts, and price declines.

There are many in the plywood industry who are calling for restructuring of the plywood trading mechanism which is currently a monopoly of the Association of Indonesian Wood Panel Procurers (Apkindo) led by Muhammad "Bob" Hasan. There have been published reports of a boycott in Japan and Korea.

The plywood industry consumes at least seventy percent of the domestic log production in Indonesia. As the plywood industry expands additional capacity in the particleboard industry could translate into stiff competition for the United States in Asian markets incoming years. A five year average economic growth at 6.4 percent per annum and increases in the per capita Gross Domestic Product are expected to result in a higher demand for plywood in the domestic market. The recently launched to relocate Indonesia's wood industry away from the healthily logged areas of Sumatra and Kalimantan by Ministry of Forestry will help spur the plywood industry to expand in the future.

Production of tropical hardwood plywood in 1996 is estimated to decrease due to a tight supply of logs and slower export sales in 1995. Indonesia's plywood industry currently operates at round seventy percent of the installed capacity which is an increase from previous years. Despite a lower production level, improvements in efficiency will enable Indonesia to remain the world's largest tropical hardwood plywood producer.

Combined with export problems the plywood industry faces more problems when importing countries implement ecolabeling requirement but by the target year 2000 all wood products exported should come from verified sustainable forest management. The industry is optimistic and expect no problems because of new requirements, because reforestation has been one of the government's priorities for many years

Document Type

Restricted Thesis

Recommended Citation

Surya, Ali, "The Plywood Industry in Indonesia" (1995). All Theses, Dissertations, and Capstone Projects. 650.
https://griffinshare.fontbonne.edu/all-etds/650