INDONESIA
- PULP AND PAPER - ISA981101
USDOC, INTERNATIONAL
TRADE ADMINISTRATION
INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE
AND
U.S. DEPARTMENT OF STATE, 1999. ALL RIGHTS RESERVED
OUTSIDE OF
THE UNITED STATES
SUMMARY
One of the most dynamic industries in the country over the
last
decade has been pulp and paper. Growth in this industry comes
as
a result of strong demand from educational, business, and
government sectors. Rising income level, along with higher
education and increasing awareness of personal hygiene, has
also
produced growth in this sector. By 1997, the industry employed
over 75,000 workers nationwide.
The lifeblood of Indonesia's pulp and paper industry is the
country's large tracts of tropical rain forest of 141.4 million
HA which occupy 70% of Indonesia landmass. 92 million
hectares
are available for production and conversion. At present 72
million hectares are in the process of rehabilitation and
reforestation. Moreover, the market has much room for expansion
as the per capita paper consumption of Indonesia's 200 million
people was only 16.5 kgs/capita in 1997.
Almost all pulp and paper machinery and parts are imported,
including some structural or civil works infrastructure which
involves stainless steel pipes and tanks. In addition, Indonesia
is largely reliant on imports of pulp, waste paper, and chemicals
which come mostly from the United States. Indonesia presents
excellent sales opportunities for U.S. products and services,
which Indonesian buyers value for their high technology and
excellent support service. Sales potential will depend
mainly on
quality and cost. Moreover, the Indonesian government is
committed to making its pulp and paper industry the most
competitive in the region. This ambition has encouraged demand
for pulp and paper equipment and technology.
This report presents an overview of the pulp and paper industry
in Indonesia and explores the future trends and opportunities
in
the different segments of the industry.
A. MARKET HIGHLIGHTS & BEST PROSPECTS
A.1. Market Highlights
The economic and financial crisis which have besieged Indonesia
along with other Asian countries starting in the later half
of
1997 has created a drop in industrial production, a reduction
of
public spending, and the cancellation and postponement of
a
number of expansion projects. However a number of international
agencies including IMF, foreign exim and private banks have
helped Indonesia in restructuring its monetary sector. Most
experts predict the Indonesian economy will recover by 2000.
All sectors experienced a slowdown in business in 1998. The
pulp
and paper business in Indonesia has an important role in
the
country's economic development, having shown a significant
improvement from USD 204 million in 1989 to USD 3.2 billion
in
1996. Pulp trade itself increased from USD 36.5 million in
1989
to USD 431.6 million in 1996.
In Indonesia, pulp mills are often part of large scale and
integrated pulp and paper operations. Please refer
to Table 2
for a pulp and paper mill industry profile.
A.2. Statistical Data
It is difficult to predict the development of the pulp and
paper
market due to the present instability of the rupiah.
The
following are available figures for export and import:
Table 1
EXPORT AND IMPORT FIGURES 1996 - 1998
1996 1997
1998*
(Thousands of U.S.
Dollars)
Import Market
1,518.2 1,227.1 218.9
Local Production
n/a n/a
n/a
Export Market
438.4 495.5
317.5
Total Market Size
1,079.8 731.6 -98.6
Import from the U.S.
228.3 259.4 n/a
The above figures are based on HS no. 470100000 to HS no.
470790900 and from HS no. 843910000 to HS no. 844190000.
* For the year of 1998, data only available for the months
of
January, February, and March.
Sources: Biro Pusat Statistics (Central Bureau of Statistics)
in
CIF value
Exchange Rates: 1 US Dollar equals:
1996 : Rp. 2,342
1997 : Rp. 2,450 - 15,000
1998 : Rp. 10,000 - 16,000
Based on Bank Indonesia (Central Bank) Middle Exchange Rates
Future Inflation Rate Assumed: 20% (BPS Estimate)
Table 2
PROFILE OF PULP AND PAPER INDUSTRY
STATUS/LOCATION NO.OF
INSTALLED CAPACITY 1997
MILLS
(TPA.*/000's)
Pulp %
Paper %
State Enterprises 3
240 6.15 338.9
4.69
Private Co.
Domestic Investment 66 845.6
21.65 4,376.3 60.51
Private Co.
Foreign Investment 11
2,820 72.20 2,517.6 34.81
TOTAL
80 3,905.6 100 7,232.8
100
Integrated
(Pulp & Paper) 11
2,581 66.08 1,542
21.32
Non Integrated
Pulp
4 1,324.6 33.92
- -
Paper
65 -
- 5,690.7 78.68
TOTAL
80 3,905.6 100 7,232.8
100
Java
65 361 9.24
6,546.6 90.51
Sumatra
13 3,005 76.94
686.2 9.49
Kalimantan
2 539.6 13.82
- -
TOTAL
80 3,905.6 100 7,232.8
100
INSTALLED CAPACITY
(TPA./000's) 1992
1993 1994
1995 1996
Pulp
1,100 1,334.7 2,054.7
2,608.6 2,740.6
Paper
3,304 3,580.6 3,882.4
4,472.5 5,595.3
PRODUCTION (METRIC TONNES/000's)
Pulp
870 900 1,314.3
2,022.1 2,560.5
Paper 2,262.8
2,572.1 3,054 3,425.8 4,120.5
Waste Paper
Recovery 430
526.3 630
700 980
IMPORT (METRIC TONNES/000's)
Pulp
447.7 705.7
687 511.9 836
Paper
114.6 111.4
171.3 140.1 197.7
Waste Paper 882.5
872.4 1,009.5 1,054.2 1,297
EXPORT (METRIC TONNES/000's)
Pulp
111 123.6
243.2 576.2 1,127.4
Paper
533 591.8
826.2 924.5 1,198.2
CONSUMPTION (METRIC TONNES/000's)
Pulp 1,206.7
1,482.1 1,758.1 1,957.8 2,269.2
Paper 1,844.4
2,091.7 2,399.1 2,641.4 3,119.9
Waste Paper 1,312.5 1,398.7
1,639.5 1,754.1 2,277
PAPER CONSUMPTION
(KG/CAPITA) 10
11 13
14 15.5
Source: Indonesian Pulp and Paper Association
*TPA stands for Tonnage Per Annum
A.3. Best Sales Prospects
Following is a list of best prospects compiled from interviewing
pulp and paper operators:
HS Codes Product Description
470100000 Mechanical wood pulp
470200000 Chemical wood pulp, dissolving grades
470311000 Chemical wood pulp, soda or sulphate unbleached,
of
coniferous
470321000 Chemical wood pulp, soda or sulphate bleached,
of
coniferous
470329000 Chemical wood pulp, soda or sulphate bleached,
of
non-coniferous
470411000 Chemical wood pulp, sulphite, unbleached, of coniferous
470421000 Chemical wood pulp, sulphite, bleached, of coniferous
470500000 Semi chemical wood pulp
470710100 Waste of paper/paperboard of unbleach kraft paper
for
paper making purpose
470790100 Unsorted waste and scrap for paper making purposes
843910000 Machinery for making pulp of fibrous cellulosic
material
843920000 Machinery for making paper or paperboard
843930000 Machinery for finishing paper or paperboard
843991000 Parts of machinery for making pulp of fibrous
cellulosic material
843999000 Other parts of machinery for making pulp of fibrous
cellulosic material
B. COMPETITIVE SITUATION
Some of the influencing factors in purchasing pulp and paper
machinery and raw materials are: provision of soft loan or
suppliers' credit, selling price, technical assistance,
availability of spare parts, quality, warranty and after
sales
service.
B.1. Domestic Production
B.1.1. Machinery and Parts
Nearly 100% of pulp and paper machinery and parts installed
in
the mills are imported. There is no local production of pulp
and
paper machinery. Most of Indonesia pulp and paper manufacturers
have set up their own workshops to repair and produce spare
parts. Furthermore, pulp and paper operators or distributors
export a limited amount of pulp and paper machinery, mainly
refurbished machinery from their own plants for their foreign
expansion and/or investment in China, Vietnam, or other Asian
countries. Local content generally contributes less than
10
percent of the total installation cost of an Indonesian pulp
and
paper operations. The smaller the overall investment, the
larger
the percentage of local content.
B.1.2. Pulp
Indonesia produces both long and short fiber, although the
majority is short fiber pulp from local plantations - rice
straw,
bagasse, kenaf, and wood. In the beginning of pulp mills
operation/production, before their own plantations matured
for
harvesting, factories utilized logs from logging waste from
forests being converted into plantations such as palm oil,
cocoa,
and from farm clearing. This is an interim action, since
the
ultimate goal is for every pulp mill to use logs from its
own
plantings. Getting logs from this means that the mills are
using
raw materials from renewable resources and sustainable
development can be achieved.
Since pulp mills are often part of large scale and integrated
pulp and paper operations, pulp output is supplied to the
paper
manufacturing operations. Export is a secondary market
for the
excess pulp supply only. Currently, there are 14 short fiber
pulp
mills and 3 long fiber pulp mills in Indonesia. Industry
output
in 1997 was approximately 3 million metric tonnes, while
paper
capacity was over 6 million metric tonnes. Table 3 shows
statistics of pulp for period of 1987 to 1996.
Table 3
STATISTICS OF PULP 1987-1996 (IN METRIC TONNES)
Year Capacity Production
Import Export Consumption
1987 515,000
325,000 232,500 7,500
550,000
1988 605,900
368,400 199,300 7,700
560,000
1989 705,900
461,400 208,000 86,480
582,920
1990 1,000,000 697,000
217,000 181,000 733,000
1991 1,100,000 850,000
242,300 107,200 985,100
1992 1,100,000 870,000
447,700 111,000 1,206,700
1993 1,334,700 900,000
705,700 123,600 1,482,100
1994 2,054,700 1,314,300
687,000 243,200 1,758,100
1995 2,628,600 2,022,120
511,850 576,200 1,957,770
1996 2,740,600 2,560,510
836,080 1,127,390 2,269,200
Source: Indonesian Pulp and Paper Association
B.1.3. Paper
By August 1997, there were 72 paper mills producing 2.1 million
tonnes (34.4%) of cultural and newsprint paper, 3.9 million
tonnes (64%) of industrial paper, and 0.1 million tonnes
(1.6%)
of household and other kinds of paper. Table 4 shows statistics
on paper and paperboard production for period of 1987 to
1996.
Table 4
STATISTICS OF PAPER AND PAPERBOARD (IN METRIC TONNES)
Year Capacity Production
Import Export Consumption
1987 980,000
826,500 144,400 188,480
782,420
1988 1,162,000
931,400 110,200 213,410
828,190
1989 1,481,000 1,154,800
124,700 204,370 1,075,130
1990 1,716,000 1,438,100
123,600 190,330 1,371,370
1991 2,374,000 1,749,000
114,900 384,800 1,479,100
1992 3,304,000 2,262,800
114,600 533,000 1,844,400
1993 3,580,600 2,572,100
111,400 591,800 2,091,700
1994 3,882,350 3,054,000
171,300 826,200 2,399,100
1995 4,472,500 3,425,800
140,110 924,520 2,641,390
1996 5,595,280 4,120,490
197,700 1,198,220 3,119,970
Source: Indonesian Pulp and Paper Association
The above figures cover Newsprint, Writing & Printing,
Sack
Kraft, Kraft Liner & Fluting, Boards, Cigarette Paper,
Wrapping
Paper, Tissue paper, and Other Paper.
The raw materials for paper mills are pulp from their own
pulp
mills (integrated, imported pulp and waste paper from local
recovery as well as imports. Domestic waste paper recovery
is
very efficient, however since there are many other uses,
only
25-31% goes to paper mills. Table 5 shows statistics on waste
paper for the period of 1987 to 1996.
Table 5
STATISTICS OF WASTE PAPER 1987 - 1996 (IN METRIC TONNES)
Year Paper Capacity (paper Production
Import Apparent
Prod. consumption)
(recovery)
Consump.
1987 826,500 782,420
158,000 225,500 383,500
1988 931,400 827,690
185,000 323,700 508,700
1989 1,154,800 1,075,130
315,000 382,500 697,500
1990 1,438,100 1,371,370
407,000 463,000 870,000
1991 1,749,000 1,479,100
410,000 549,100 959,100
1992 2,262,800 1,844,400
430,000 882,500 1,312,500
1993 2,572,100 2,091,700
526,300 872,400 1,398,700
1994 3,054,000 2,399,100
630,000 1,009,500 1,639,500
1995 3,425,800 2,641,390
700,000 1,054,150 1,754,150
1996 4,120,490 3,119,970
980,000 1,297,000 2,277,000
Source: Indonesian Pulp and Paper Association
Beside waste paper, recycled fibers are widely used for the
production of industrial paper and newsprint. Since local
equipment is not sufficient due to competition of the other
uses
(wrapping, etc.), a large quantity of wastepaper has to be
imported. Table 6 compares the amount of local recycled fibers
used versus imports.
Table 6
COMPOSITION OF LOCAL SUPPLY VERSUS IMPORTED RECYCLED FIBER
(in
million metric tonnes)
Year Consumption Local supply
Import
1995 1.7
0.7
1.0
1996 3.4
0.8
2.6
1997 4.0
1.0
3.0
1998 4.3
1.2
3.1
1999 5.0
1.4
3.6
2000 5.6
1.6
4.0
Source: Paper Asia
B.2. Third Country Competitors
B.2.1. Pulp and paper machinery and parts
The United States' main competitors in Indonesia are Finland,
Japan, Germany, and Austria. Finland is known for its technology
and for having the longest experience in pulp and paper
machinery. Valmet is its leading brand.
However, p&p operators currently prefer to purchase Mitsubishi
equipment because the Japanese government has helped through
its
exim bank by providing soft loans with a 20 year grace period
to
the Indonesian private and government p&p operators.
Other
well-known brands sold in Indonesia include Voith-Sulzer
from
Germany, Andritz and Ahlstrom from Austria.
Total p&p equipment, raw material and chemical imports
for 1996
was accounted at USD 1,518,193,491 while in 1997 imports
totaled
USD 1,227,143,725. Table 7 and 8 show the market share of
major
suppliers.
Table 7
PULP & PAPER EQUIPMENT IMPORTS BY COUNTRY OF ORIGIN
Covering HS No. 843910000 to HS No. 843999000(IN USD 000's)
1996 %
1997 %
Japan
191,425 23.53
107,746 17.64
Germany 120,034
14.75 82,912
13.58
Sweden 110,867
13.63 18,867
3.09
Finland 103,846
12.76 70,002
11.46
USA
44,390 5.45
107,743 17.64
Austria 29,537
3.63 67,101
10.99
Others 213,554
26.25 156,299
25.60
TOTAL
813,653 100.00 610,670
100.00
Sources: Biro Pusat Statistics (Central Bureau of Statistics)
in
CIF value
B.2.2. Raw materials and Chemicals
Table 8
RAW MATERIAL AND CHEMICAL IMPORTS BY COUNTRY OF ORIGIN
Covering HS No. 470100000 to HS No. 470790900(IN USD 000's)
1996 %
1997 %
USA
183,921 26.10 151,633
24.60
Canada 114,877
16.30 103,101 16.72
New Zealand 62,144
8.83 37,692
6.12
Germany 45,675
6.48 24,706
4.00
South Africa 41,423
5.88 50,547
8.20
Brazil
31,872 4.53
64,730 10.50
Sweden
16,727 2.38
33,034 5.36
Others 207,903
29.50 151,030 24.50
TOTAL
704,542 100.00 616,473
100.00
Sources: Biro Pusat Statistics (Central Bureau of Statistics)
in
CIF value
B.3. U.S. Market Position
The United States has been dominating the import market for
both
pulp and paper machinery and raw materials. U.S. equipment
and
raw materials are well represented in Indonesia and enjoy
an
excellent reputation. U.S. brands, known for their
quality and
durability, have progressively gained market share, particularly
with regard to the waste paper and chemicals to process the
production waste. There are several U.S. machinery brands
sold in
Indonesia.
Total imports for the first quarter of 1998 were USD 7,205.6
million. Imports from the U.S. were USD 809 million, a decline
of
40.84% from the first quarter last year. However, equipment
imports increased 12.19% last year from 5.45% in 1996 to
17.64%
in 1997. Part of the reason for the increase was that a U.S.
supplier offered credits to Sinar Mas Group for purchasing
its
equipment for the recent pulp expansion at PT. Indah Kiat
(unit 3
in Riau) and paper expansion at PT. Tjiwi Kimia (unit 11
in
Mojokerto).
U.S. suppliers should work closely with both local and foreign
engineering companies involved in detailing engineering and
design of large projects. Close contact with end users
is also
critical in obtaining timely information in order to quote
on new
projects.
There are still plenty of opportunities for other U.S. products
to compete in Indonesia. U.S. producers should consider
the
following guidance in order to successfully enter the local
market:
1. Build up a permanent and strong market presence.
It is not
enough to come in only when big transactions can be made.
Firms
must consistently work to build high awareness levels and
a
strong reputation.
2. Appoint a knowledgeable local agent or distributor to
represent the firm's products. The local agent/distributor
should provide good technical support to end users.
3. Focus on long term market development. The U.S. principal
must draw up long term goals and the means and measures to
achieve them. He also has to build up a control mechanism,
which
allows the principal to monitor the situation and take corrective
action jointly with the Indonesian agent, as the prevailing
situation requires.
4. Aggressively promote the products and participate in
Indonesian trade exhibitions whenever possible.
The United States & Foreign Commercial Service offers
the Gold
Key Service (GKS) and Agent Distributor Service (ADS), which
are
designed to assist U.S. exporters in finding appropriate
sales
representatives in Indonesia. The information on these
services
can be obtained through your nearest U.S. Department of Commerce
Export Assistance Center.
C. END-USER ANALYSIS
Section B of this report mentioned that pulp industry in
general is integrated with its paper company, except for
the
rayon pulp company. Therefore, most pulp production is
directed at meeting a firm's own paper factory needs. The
remainder is sold to paper companies which do not have their
own factory or are exported. The paper manufacturers which
do
not have their own pulp production facility usually meet
their needs with imports.
C.1. Pulp and Paper manufacturers
The companies listed below account for nearly all of Indonesia's
pulp and paper exports and a very large share of the country's
total pulp and paper production. Most of these companies
are
engaged in important expansion programs as shown in Table
9.
Sinar Mas Group is the largest pulp and paper manufacturer
in
Indonesia. It produces a huge variety of p&p products
such as
writing & printing paper, wrapping paper, stationery,
corrugating
medium, kraft liner, duplex/manila board, carton box, board
box,
and tissue papers. Sinar Mas's seven subsidiaries include:
Company Name
Installed Production Capacity
as of 1997
(000's/tonnes/year)
Pulp Paper
PT. Indah Kiat Pulp & Paper Corp.
1,435 1,254
PT. Pabrik Kertas Tjiwi Kimia
0 651
PT. Eka Mas Fortuna
0 168
PT. Lontar Papyrus Pulp & Paper Industry 565
224
PT. Pindo Deli Pulp & Paper Mills
0 750
PT. The Univenus Company
0
20
PT. Purinusa Eka Persada (converting) n/a
n/a
Sinar Mas Group had formed 2 holding companies for its pulp
and
paper operations: PT. Purinusa for its operations in Indonesia
and Asia Pulp & Paper Co. Ltd for all of its operation
in the
rest of the world. Please refer to table 9 for Sinar Mas's
current expansion projects.
For details on Sinar Mas' expansion plans outside Indonesia,
please contact:
Company: Asia Pulp & Paper Co. Ltd.
Address: Plaza BII, Tower 2, 7th Floor
Jl. M.H.
Thamrin No. 51
Jakarta
10350, Indonesia
Telp: (62-21) 392-7663, 392-9355
Fax: (62-21) 392-8875
E-mail: puriir@dnet.net.id
Contact: Ms. Prisca Deassy or Mr. Ronny
Kurniawan
Raja Garuda Mas Group (RGM Group) represents the second largest
pulp manufacturer. It consists of PT. Riau Andalan Pulp &
Paper
which produces 600,000 ton/year of pulp and PT. Inti Indorayon
Utama which produces 220,000 ton/year of pulp and 60,000
ton/year
of rayon fiber. The RGM Group exports 70% of its annual
production of approximately 240,000 metric tonnes of hardwood
pulp and 60,000 tonnes of rayon fiber.
PT. Pakerin manufactures 150,000 ton/year of pulp and 700,000
ton/year of paper. Pakerin is the second largest p&p
producer on
the the island of Java. Besides pulp, Pakerin produces
corrugating medium, kraft liner, and boards.
PT. Kiani Kertas has the largest single line pulp machine,
which
produces 500,000 ton/year. Kiani is one of the subsidiary
companies of Kalimanis Group owned by the timber tycoon Mr.
Muhammad "Bob Hasan", known as a close friend of former President
Soeharto. Kiani's project in East Kalimantan includes a
deep-water port, an airport with a 2,500-meter runway, and
a
residential complex for about 1,000 employees. Currently,
Kiani
is restructuring and rescheduling its debts with South Korean
and
Japanese bankers for the approximate amount of USD 1.3 billion.
At full capacity, the mill has a projected annual revenue
of USD
225 million. Mr. Hasan estimated Kalimanis group to be worth
of
USD 3 billion to USD 4 billion. A reliable source at Kiani
confirmed that Kiani has opened the opportunity for a strategic
partnership to help run the mill.
PT. Tanjung Enim Lestari Pulp & Paper's mill is currently
still
under construction in South Sumatra. It will produce pulp
only
with an estimated production capacity of 450,000 ton/year.
It is
expected to commence operation in September 1999.
Some of the larger paper manufacturers which do not have their
own pulp production facility are as follows:
Company Name
Mill Installed Capacity (ton/year)
Location as of 1997
PT. Fajar Surya Wisesa Bekasi, W.Java
500,000
PT. Aspex Paper
Gresik, E.Java 430,000
PT. Surabaya Agung
Gresik, E.Java 336,800
Industri Pulp&Paper
PT. Jaya Kertas
Nganjuk, E.Java 200,000
PT. Pelita Cengkareng Tangerang,
W.Java 157,000
Paper & Co.
PT. Suparma
Surabaya,E.Java 150,000
PT. Surya Pamenang Kediri,
E.Java 150,000
Table 9
LIST OF PULP AND PAPER MILLS EXPANSION PROJECTS
Company
Mill Capacity (000's/TPA)
Location Pulp
Paper
PT. Indah Kiat Pulp & Paper Corp. Riau
0 395
PT. Pabrik Kertas Tjiwi Kimia
Mojokerto 0 370
PT. Lontar Papyrus Pulp&Paper Ind. Jambi
440 0
PT. Lontar Papyrus Pulp&Paper Ind. Aceh
0 7.5
PT. Pindo Deli Pulp & Paper Mills Karawang
0 713
PT. Riau Andalan Pulp & Paper
Riau 500 300
PT. Inti Indorayon
Riau 0
30
PT. Pakerin
Mojokerto 0 330
PT. Pakerin
S. Sumatra 150 0
PT. Fajar Surya Wisesa
E.Kalimantan 300 0
PT. Kertas Basuki Rachmat
Banyuwangi 0
200
PT. Kertas Basuki Rachmat
W.Kalimantan 250 0
Sources: Various interviews
C.2. Other industries
The packaging industry is the largest end-user of paper and
paperboard. It includes the food & beverage, cement,
household
and many other industries. By the end of 1996, the
packaging
industry consumed nearly 2.4 million metric tons of paper
inputs,
56 percent of the total volume of the market. Additionally,
some
packaging products may be 100 percent recycled paper and/or
paperboard, as most packaging materials do not require the
quality of virgin cellulose.
D. MARKET ACCESS
D.1. Import Climate
Until the foreign currency exchange rate upheavals throughout
South East Asia in the second half of 1997, Indonesian imports
were increasing in recent years between five and ten percent
annually. Imports virtually halted at the end of 1997
through
Summer 1998, but a new government and new agreements with
the IMF
and other donors in March/April 1998 offer the promise of
stabilizing the currency, repairing the banking system, and
getting the economy moving again in the latter half of 1998.
By
the middle of November 1998, rupiah had strengthened to as
much
as 7,500 per USD from 12,000 in July and early August. Imports
totaled some $40 billion in 1997, and $4.5 billion (f.o.b.
value)
came from the United States. This represents a higher
share of
the market than the U.S.'s traditional share in the 12 percent
range.
Japan dominates Indonesia's imports, supplying about one-fourth
of imports. Other main suppliers include Australia,
Denmark,
England, Germany, Italy and Japan. American technology
is viewed
favorably by Indonesians and often preferred if price is
competitive. However, German and Japanese suppliers
in
particular are strong competitors. Both offer good
technology.
Japanese products are cheaper than those from the United
States.
The German Government offers financial assistance to German
firms. Japanese economic assistance to Indonesia of nearly
$2
billion annually gives Japanese firms a strong advantage.
Japanese trading companies (keiretsu) have many employees
in
numerous Indonesian locales, giving them market savvy difficult
to duplicate. The Japanese carry an image of being
closer to
market needs and more responsive than Americans.
Over the past decade Indonesia has initiated periodic import
deregulation packages and tariff reductions, but its tariffs
(which average over 12 percent) remain among the highest
in the
ASEAN region. Non-tariff barriers are legion and numerous
documents are required to process imports, although the country
is moving to a paperless electronic data interchange system
by
which information is submitted electronically by importers.
There is no known market barrier to import pulp and paper
equipment and raw materials . The following is a list
of import
duties applied to items related to pulp and paper industries.
A
10% value added tax (VAT) is charged to all of the following
products:
Product Description
Import(%)
Pulp
0
Writing and Printing paper
0
Industrial paper
10
Newspapers
5
Households & Others
10
Environmental Equipment
0
Other machinery
0 (if production is proven
for export oriented)
D.2. Distribution/Business Practices
Distribution regulations changed in late 1997 and early 1998
as a
result of agreements with the International Monetary Fund.
Until
then, import/export, wholesale and retail distribution were
reserved for Indonesian companies 51 percent or more Indonesian
owned. As of November 1997, foreign-owned firms can
obtain a
foreign investment license to wholesale any product if they
also
have a license to manufacture something in Indonesia.
As of
April 1998, foreign-owned firms can obtain a license to retail
any product if they also have a licensed manufacturing operation
in Indonesia. However, a foreign firm cannot simultaneous
both
wholesale and retail, because this is viewed as a monopoly,
and
foreign firms cannot import the products that will be wholesaled
or retailed, but must use an Indonesian import firm.
Sole national agents are required for specified products only,
mainly certain types of heavy equipment such as road rollers,
hoist and lifting equipment, tractors, and cement-mixing
machines, motorcycles, cars and trucks. For other sales
to the
private sector, sole agents are not required, although
Indonesians prefer to become a foreign firm's sole agent
or
distributor. In any case a trial period of at least
six months
should be standard practice. For sales to the Government,
Indonesian agents must be used, and the agents are encouraged
to
have a direct relationship with the foreign supplier rather
than
be a sub-agent of a Singapore (or similar outsider) regional
firm.
Traditionally Indonesian importers have not specialized in
particular product lines, but instead handle a wide range
of
products.
Foreign firms may open a local representative office in all
27
provinces with permission of the Indonesian Department of
Industry and Trade. The representative(s) may be an
Indonesian
company or individual, or a foreign national. Trade
representatives may not engage in direct sales nor conclude
deals, but they may engage in sales promotion and marketing,
or
do market research and provide technical advice. In many
cases,
foreign companies have established close connections with
Indonesian national importers, allowing the two companies
to
function as one. The Indonesian company acts as importer
and
distributor, and the foreign company promotes its products,
sometimes seconding expatriate staff as employees to its
Indonesian distributor/partner. A more active role
for the
foreign firm can be arranged through a management contract,
which
can take many forms.
D.3. Financing Methods
The economic crisis of 1997-98 has brought financing to the
forefront of business issues in Indonesia. At the time of
this
writing the banking system is barely functioning and local
interest rates are prohibitively high. Despite government
guarantees of all commercial banks' obligations, most Indonesian
bank letters of credit are not recognized overseas at this
time.
This will change perhaps by mid-1999 as banking reform proceeds.
In the interim, to sell here, U.S. suppliers must offer generous
and creative financing terms to Indonesia buyers to make
a sale.
Indonesia continues to maintain an open capital account and
no
foreign exchange controls. Since mid-1997 the rupiah has
floated
freely. The value of the rupiah has dropped 70 percent in
value
vis-a-vis the value of U.S. dollar as of early April 1998.
However by the middle of October 1998, the rupiah had
strengthened by 62 percent over its value in July.
U.S. Export Import Bank guarantees have often been used by
American banks, and project financing is available from the
World
Bank, the Asian Development Bank, and bilateral donors including
- under special conditions - Japan's Overseas Economic
Cooperation Fund (OECF).
American Express Bank, Bank of American, Chase, and Citibank
have
branches in Indonesia. Bank of Boston, National Bank of
California, Bankers Trust, Core States, J.P. Morgan, and
Republic
National Bank maintain representative offices. Many
U.S. banks
have correspondent relationships with some 86 Indonesian
banks,
i.e. with about 40 percent of all banks registered in Indonesia.
Financing through soft loan terms is required for most Indonesian
government projects. Most contract award decisions
hinge on
terms that typically include seven years grace and an interest
rate of 3.5 percent over 25 to 40 years. Indonesian
government
funds provide typically 20 to 35 percent of the budget for
capital projects; the rest comes from foreign lending.
This
scenario is unlikely to change for the foreseeable future.
TRADE SHOW AND TRADE PROMOTION OPPORTUNITIES
The U.S. Commercial Service (CS) in Indonesia encourages American
company participation in local trade fairs to introduce products
to the market. While most fairs are useful as a venue
to meet
relevant contacts, their quality varies according to the
experience of the organizer and its ability to advertise
and draw
customers to the events. Expect only a handful of U.S.
and
foreign firms in most shows, but lots of local representatives,
licensees and distributors of foreign suppliers. Ideally,
prospective U.S. exhibitors should link the exhibition to
a
targeted appointment schedule, which the CS can organize
through
its Gold Key program.
The following shows are recommended for U.S. companies:
1. THE 1999 MANUFACTURING INDONESIA SERIES OF
EXHIBITIONS
Held on November 2-6, 1999, at Jakarta
International
Exhibition Center, Kebayoran, Jakarta
Which includes:
- Pollution & Environment Technology
Indonesia
- Clean Manufacturing Indonesia
2. WOODWORKING & FORESTRY INDONESIA
Held on January 26-29, 2000, at Jakarta International Exhibition
Center, Kebayoran Jakarta
Organizer: PT Pamerindo Buana Abadi
Attn: Ms. Monalisa Zen, Project Manager
Deutsche Bank Building, 13th Floor
Jl. Imam Bonjol 80
Jakarta 10310
Indonesia
Tel: (62-21) 316-2001
Fax: (62-21) 316-1981, 316-1982
Other Sources of Information
The Commercial Service publishes annually a comprehensive
"Country Commercial Guide for Indonesia" describing business
dynamics, best prospects, economic and political analyses,
trade
and investment regulations and statistics, and upcoming trade
events. This document is available in CD-ROM format
or by
subscription to the National Trade Data Bank via the following:
tel: 1-800-STAT-USA, or on-line at http://www.stat-usa.gov.
It
can also be downloaded from the U.S. Embassy Jakarta home
page
(www.usembassyjakarta.org), or via home pages of the U.S.
Department of Commerce (www.doc.ita.gov) or the U.S. Department
of State (www.state.gov). Print versions of Country
Commercial
Guides on all countries having a U.S. Embassy can also be
ordered
from the National Technical Information Service at
1-800-553-NTIS.
Other commercial, economic, consular and educational information
relevant to Americans interested in Indonesia, and to
Indonesians, is available on line from the U.S. Embassy Jakarta
at the following address: http://www.usembassyjakarta.org.
The U.S. Commercial Service in Indonesia offers a wide range
of
programs to open the Indonesian market to interested U.S.
companies. Our main office is in Jakarta, and we have
commercial
staff in Indonesia's second city and gateway to the eastern
islands: Surabaya. We will give timely responses to
business
queries sent to us at the following mailing, fax and Internet
addresses:
A. U.S. Commercial Service
American Embassy Jakarta
Mailing address from U.S. Box 1, Unit 8129,
APO AP 96520-0001
Physical location: U.S. Commercial Center
Wisma Metropolitan II, 3rd Floor
Jl. Jend. Sudirman Kav. 29-31
Jakarta 12920, Indonesia
Tel: (62-21)526-2850
Fax: (62-21)526-2855
Internet email: Jakarta.office.box@mail.doc.gov
B. The Commercial Service
American Consulate General Surabaya
Mailing address from U.S. (same as Embassy, above)
Physical location:
Jl. Dr. Sutomo, No. 33
Surabaya 60264, Indonesia
Tel: (62-31) 561-9213, 567-6880
Fax: (62-31) 567-7748
Internet email: Surabaya.office.box@mail.doc.gov
KEY CONTACTS
ASSOCIATIONS
1. Asosiasi Pulp dan Kertas Indonesia (APKI)
Indonesian Pulp and Paper Association
Address: Jalan Cimandiri No. 6 Flat
1/2
Jakarta 10330, Indonesia
Tel.: (62-21)
326-084
Fax: (62-21)
314-0168
Contact: Mr. M. Mansur, Chairman
Mr. Kahar
Haryopuspito, Executive Director
2. Masyarakat Perhutanan Indonesia (MPI)
Indonesian Forestry Community
Address: Manggala Wanabakti Building
Blok IV, Wing B, 9th Floor
Jl. Jend. Gatot Subroto, Senayan
Jakarta 10270, Indonesia
Tel.: (62-21)
573-7036 and 570-1154 (direct),
570-3265 Ext. 5472, 5420,
Fax: (62-21)
573-2564
Contact: Mr. Hendro Prastowo, Deputy
Executive President
3. Institute for Research and Development of Cellulose
Industry
(IRDCLI)
Address:
Jalan Raya Dayeuhkolot No. 132
Bandung 40258, Indonesia
Tel:
(62-22) 520-2871
Fax:
(62-22) 520-2871
Contact:
Mr. H. Surmawi Abas, Director
GOVERNMENT OFFICIALS:
Ministry of Industry and Trade
Attn: Directorate General of Agricultural
and Forestry-based
Industry
Address: Jl. Gatot Subroto Kav. 52-53
18th Floor
Jakarta,
Indonesia
Telp: (62-21) 525-2713, 525-5509
Fax: (62-21) 525-2450
Contact: Dr. Gatot Ibnusantosa, Director of Pulp and
Paper
Industry
MAJOR PULP AND PAPER MANUFACTURERS
PRIVATE COMPANIES
1. PT. Pabrik Kertas Tjiwi Kimia
Address:
Jalan Raya Surabaya
Mojokerto Km. 44
Jawa Timur, Indonesia
Tel:
(62-321) 361-552
Fax:
(62-321) 361-615
Contact:
Mr. Jody Setiawan Lin, President Director
Mr. Tjatur Prasetya, Head of Environment
Protection
Mr. Budi Sutanto, Senior Engineering
Mr. Hanafi Pratomo, R & D Manager
2. PT. Pabrik Kertas Indonesia (PAKERIN)
Address:
Head Office:
Jl. Kertopaten No. 3
Surabaya 60145, Indonesia
Tel:
(62-31) 371-6173
Fax:
(62-31) 371-4345, 371-7223
Contact:
Mr. Steven Tirtowidjojo, Plant Director
Mr. Nyono Purnomo, Plant Manager
3. PT. Fajar Surya Wisesa
Address: Head Office:
Jl. Abdul Muis No. 30
Jakarta 10160
Tel: (62-21) 344-1316, 385-0126
Fax: (62-21) 345-7643
Contact: Mr. Winarko Sulistyo, President Director
Mr. Roy Teguh, Director
4. PT. Kiani Kertas
Address: Site Office:
Mangkajang, Berau
East Kalimantan, Indonesia
Tel: n/a
Fax: n/a
Jakarta Office:
Wisma Kalimanis 4th Floor
Jl. M.T. Haryono Kav. 33
Jakarta 12770
Tel: (62-21) 798-6065, 798-6066
Fax: (62-21) 797-5124, 798-6036
Http://www.kiani.com
Contact: Mr. Suharsono Kramadibrata, President Director
Mr. Teddy Suratmadji, Production & Environment
Director
Mr. Arie Nouvel, Public Affairs & Environment
Manager
5. PT. Tanjung Enim Lestari Pulp & Paper
Address: Head Office:
Wisma Barito Pacific, Tower B, 4th Floor
Jl. Letjen S. Parman Kav. 62-63
Jakarta 11420, Indonesia
Tel: (62-21) 535-8450
Fax: (62-21) 534-7088
Contact: Mr. Jansen Wiraatmadja,
President Director
Mr. Daniel Lunoto, Purchasing Manager
6. PT. Surabaya Agung Industri Pulp & Kertas
Address: Head Office:
Jl. Bongkaran No. 68
Surabaya 60161, Indonesia
Telp: (62-31) 353-9457, 353-9462
Fax: (62-31) 353-5043
Contact: Mr. Tirtomulyadi Sulistyo, President Director
Mr. Sinduchayana Sulistyo, Director
STATE ENTERPRISES
1. PT. Kertas Leces
Address: Factory/Head Office:
Jl. Raya Lumajang, Leces
Probolinggo 67202
East Java, Indonesia
Telp: (62-335)
680-993, 680-994, 680-995, 680-996
Fax: (62-335)
680-954
Contact: Mr. Kusmadi, President
Director
Mr. Robert Simandjuntak, Production Director
Mr. I. Made Dastry, Marketing Director
2. PT. Kertas Kraft Aceh
Address: Factory/Head Office:
Ds. Jamuan, Kec. Nisam, Kab. Aceh Utara,
PO Box 20, Lhokseumawe
Sumatra, Indonesia
Telp: (62-645) 41733, 41734, 42533,
41815
Fax: (62-645) 41482, 41822,
41053
Contact: Mr. Soeparnadi Prawotokoesoemo, President
Director
Mr. Sutamat, Director
FOREIGN INVESTMENTS
1. PT. Indah Kiat Pulp & Paper Corporation
Address: Head Office:
Wisma Indah Kiat
Gedung B. Lantai 2
Jl. Raya Serpong Km. 8
Tangerang
Jawa Barat, Indonesia
Telp: (62-21)
531-20001
Fax: (62-21)
531-20342
Contact: Mr. Teguh Ganda Wijaya,
President Director
Mr. Njauw Kwet Meen, Director
Mr. Yan Chandra Winata, Purchasing Division
2. PT. Lontar Papyrus Pulp & Paper Industry
Address: Medan Office:
Wisma Bank Internasional Indonesia 6th Floor
Jl. Diponegoro No. 18
Medan 20152
North Sumatra, Indonesia
Telp:(62-61) 555-175, 555-859, 557-015
Fax: (62-61) 555-175
Riau Office:
Jl. Teuku Umar No. 51
Pekanbaru, Riau, Indonesia
Telp:(62-761) 21627, 335-580, 33535
Fax: (62-761) 33662
Contact: Mr. Hendra Jaya Kosasih, President Director
Mr. Lin Sun Keng, Vice President Director
3. PT. Inti Indorayon Utama
Address: Head Office:
Uniplaza Tower 6th Floor A-1
Jl. Let. Jen. M.T. Haryono
Medan 20231, Indonesia
Telp: (62-61) 532-532, 530-895
Fax: (62-61) 530-967
Contact: Mr. Roland Mazery, President Director
Mr. Protasius Daritan, Director
4. PT. Riau Andalan Pulp & Paper
Address: Factory:
Pangkalan Kerinci, Kec. Langgam, Kab. Kampar
Pekan Baru, Riau
PO Box 1080, Indonesia
Telp:(62-761) 95529
Fax: (62-761) 95681
Jakarta Office:
BNI Building 20th Floor
Jl. Jend. Sudirman Kav. 1
Jakarta 10220, Indonesia
Telp:(62-21) 570-6047, 570-2610
Fax: (62-21) 570-1771, 570-1221
Contact: Mr. Rune Roger Ingvasson, Director
Mr. Protasius
Daritan, Director
5. PT. Aspex Paper
Address: Head Office:
Wisma Eka Life 11th Floor
Jl. M.T. Haryono Kav. 62
Jakarta 12780, Indonesia
Telp: (62-21) 797-5959
Fax: (62-21) 797-6402
Contact: Mr. Iskandar Jr., President Director
Lee Won Je, Director
6. PT. Pindo Deli Pulp & Paper Mills
Address: Head Office:
Plaza BII Menara II, 17th floor
Jl. M.H. Thamrin No. 51
Jakarta 10350, Indonesia
Telp: (62-21) 392-9266-69
Fax: (62-21) 392-9460-61
Contact: Mr. Teguh Ganda Wijaya, President Director
Mr. Rudy Wirianata, Vice President Director
DISTRIBUTORS
1. PT. ABB SAKTI INDUSTRI
Agent of: DCS System, Accuray Quality
Control System, ABB
Sectional Drive, etc.
Address: Jakarta office:
Mid Plaza II Building 2nd Floor
Jl. Jend. Sudirman Kav. 10-11
Jakarta 10220, Indonesia
Telp: (62-21) 573-9690
Fax: (62-21) 573-9692
Contact: Mr. Kastanto Ledi, Pulp and Paper Div.
Surabaya office:
Jl. Margomulyo No. 29B
Tandes, Surabaya 60183, Indonesia
Telp: (62-31) 749-7999
Fax: (62-31) 749-7130
Contact: Mr. Ronald C. Kusuma, Branch
Manager
2. PT. CELLMARK INTERINDO TRADE
Agent of: Valmet
Address: Jl. Raya Jatiwaringin No.
54
Jakarta, Indonesia
Telp: (62-21) 848-0130
Fax: (62-21) 848-0140
Contact: Mr. Djoni, Paper Machinery
Dept.
3. PT. PACIFIC TIRTAPERSADA
Agent of: Beloit, Huyck, Nash, etc.
Address: Head office:
Jl. Gembong No. 2-16 Blok B7
Surabaya, Indonesia
Telp: (62-31) 371-3776, 371-6917
Fax: (62-31) 371-4090
Contact: Mr. Sugeng Hadilaksono, Director
Jakarta office:
Jl. Buana Biru Besar II No. 29
Taman Permata Buana
Jakarta 11610, Indonesia
Telp: (62-21) 580-8310, 582-4872
Fax: (62-21) 582-4873
Contact: Mr. Lukas Agustinus, Area Sales
Manager
4. PT. JANTAN SETIA SIMPATI
Agent of: Jagenberg coating and rewinder
machine, etc.
Address: Jl. Majapahit 34/12
Jakarta 10160, Indonesia
Telp: (62-21) 380-8101, 384-2817
Fax: (62-21) 384-2901
Contact: Mr. Josep Taslim, Director
5. PT. Multan Kusuma Sakti
Sole Distributors of various pumps, fans, vacuums/blowers,
and
compressors, such as: Warren Rupp, Desmi,
Stubbe, Roots
Holmes, PoweRupp, Seepex, Apollo, Schiele, Pulsa, Leistritz,
Siemens, PGW, Hartzell, Spencer, etc.
Address: Perkantoran Kebon Jeruk Baru
Blok A No. 3
Jakarta 11530, Indonesia
Telp: (62-21) 530-8440
Fax: (62-21) 530-8462, 533-0248
Contact: Mr. Sunardi Tjandra Kusuma, Director
6. MEASUREX Surabaya Representative Office
Agent of: DCS & QCS System
Address: Jl. Simpang Darmo
Permai Selatan II No. 32
Surabaya 60226, Indonesia
Telp: (62-31)
732-9577 (6 lines)
Fax: (62-31)
732-9845
Contact: Mr. Frans Venter, Regional
Manager Sales &
Service
7. PT. TRI PANOTO
Agent of: Blades and Ceramic foils for
paper industry such
as Essco, Wefa Press, Dienes
Address: Jl. Darmo Baru No. 59
Surabaya 60183, Indonesia
Telp: (62-31)
731-9372
Fax: (62-31)
734-1589
Contact: Mr. SK. Guritno, Branch
Manager and Paper
Division Manager
ISA Customer Satisfaction Survey
U.S. Department of Commerce
* International Trade Administration*
The Commercial Service
-------------------------------------------------------------
The U.S. Department of Commerce would appreciate input from
U.S.
businesses that have used this ISA report in conducting export
market research. Please take a few moments to complete
the
attached survey and fax it to 202/482-0973, mail it to QAS,
Rm. 2002, U.S. Department of Commerce, Washington, D.C. 20230,
or
Email: Internet[Opfer@doc.gov].
---------------------------------------------------------------
* * * About Our Service * * *
1. Country covered by report: _______________________________
Commerce domestic office that assisted you (if applicable):
_____________________________________________________________
2. How did you find out about the ISA service?
__Direct mail
__Recommended by another firm
__Recommended by Commerce staff
__Trade press
__State/private newsletter
__Department of Commerce newsletter
__Other (specify): _______________________________
3. Please indicate the extent to which your objectives were
satisfied:
1-Very satisfied 2-Satisfied
3-Neither satisfied nor dissatisfied
4-Dissatisfied 5-Very dissatisfied
6-Not applicable
__Overall objectives
__Accuracy of information
__Completeness of information
__Clarity of information
__Relevance of information
__Delivery when promised
__Follow-up by Commerce representative
4. In your opinion, did using the ISA service facilitate any
of
the following?
__Decided to enter or increase presence in market
__Developed an export marketing plan
__Added to knowledge of country/industry
__Corroborated market data from other sources
__Decided to bypass or reduce presence in market
__Other (specify): _______________________________
5. How likely would you be to use the ISA service again?
__Definitely would
__Probably would
__Unsure
__Probably would not
__Definitely would not
6. Comments:
________________________________________________________
* * * About Your Firm * * *
1. Number of employees: __1-99 __100-249
__250-499
__500-999 __1,000+
2. Location (abbreviation of your state only):______
3. Business activity (check one):
__Manufacturing
__Service
__Agent, broker, manufacturer's representative
__Export management or trading company
__Other (specify):_______________________________
4. Export shipments over the past 12 months:
__0-1 __2-12 __13-50
__51-99 __100+
May we call you about your experience with the ISA service?
Company name: _______________________________________________
Contact name: _______________________________________________
Phone: ______________________________________________________
-------- -------------------------------------------------------
Thank you--we value your input!
---------------------------------------------------------------
This report is authorized by law (15 U.S.C. 1512 et seq.,
15
U.S.C. 171 et seq.). While you are not required to
respond,
your cooperation is needed to make the results of this evaluation
comprehensive, accurate, and timely. Public reporting
burden for
this collection of information is estimated to average ten
minutes per response, including the time for reviewing
instructions, searching existing data sources, gathering
and
maintaining the data needed, and completing and reviewing
the
collection of information. Send comments regarding
this burden
estimate or any other aspect of this collection of information,
including suggestions for reducing the burden, to Reports
Clearance Officer, International Trade Administration, Rm.
4001,
U.S. Department of Commerce, Washington, D.C. 20230, and
to the
Office of Information and Regulatory Affairs, Office of
Management and Budget, Paperwork Reduction Project (0625-0217),
Washington, D.C. 20503.
---------------------------------------------------------------
FORM ITA 4130P-I (rev. 5/95)
OMB. No. 0625-0217; Expires 12/31/98
Source: STAT-USA®/InternetTM,
a service of STAT-USA®, U.S. Department of Commerce.