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Forestry and wood-based industry in Indonesia.

INTRODUCTION

Indonesia's forestry industry has been badly hit by the protracted crisis since 1997/1998 that the country has lost its role as a major player in timber trade in the world.

Many large forestry companies have been beset by heavy debt burden worsened by growing scarcity of raw material from forests destroyed mainly by rampant illegal logging. A large part of trees illegally cut is smuggled abroad. Extensive destruction of the forests has resulted in sharp decline in forest productivity.

In addition, the country's products of processed timber are less competitive as most of the factories are no longer efficient.

As a result many companies operating in the forestry sector have stopped or nearly stopped operation. Many concessionaire have failed to repay their debt in reforestation fund resulting in the revocation of their business licenses. And plywood companies laid off many workers as they could not continue normal operation with scarcity in raw material supply.

The government, concerned with the condition seeks to encourage development of plantation forests (HTI) to reduce the pressure on natural forests. However, many HTI projects could not be carried out because of financial difficulty.

The prospects, however, are still good for forestry industry. Many units of HTI are expected to start producing logs in the coming several years. HTI is expected to be the main source of log raw material.

Meanwhile the country still has large natural forests. They are still highly potential provided that they well managed to be sustainable.

There are various factors hampering expansion of plantation forests such as protests over losses of various living matters, forest fires, degradation of forest quality and financial difficulty. However, development of HTI is the only viable concept to restore the condition of the country's forestry industry.

In this report, we try to study various related aspects of the forestry industry to identify problems and see any opportunities as well as risk of venture in forestry industry.

FOREST CONCESSIONS (HPH)

Forest management in Indonesia

Earlier especially at the start of the Suharto regime in the 1970s, the forestry sector was a major contributor to the country's economic development, and forest concession (HPH) was a dominant system of exploiting natural forests.

HPH system was first introduced in 1967 under the Forestry Law issued that year. HPH holders were required to preserve the forests by observing a number of regulations such as on method of selective cutting, method of using forests (TGHK) and provincial area layout plan (RTRWP).

Sumatra and Kalimantan were the main targets of exploitation as the two islands have large forests with valuable tree species. Many large companies were licensed to exploit forests under 20-year contract. In the 1970's logs became a major export earner contributing substantially to economic development.

However, only a few, which held the HPH license, enjoyed the natural wealth from the Sumatra and Kalimantan forests.

Poor management system marked by arbitrary felling of trees and corruption involving the HPH holders resulted in extensive damage to the tropical forests especially in the middle of the 1980s'.

HPH Companies

In less than 15 years, there was a sharp decline in the size of the country's forests. Illegal logging was rampant especially during and after the economic crisis that followed the monetary crisis in 1997/1998. Illegal logging was out of control amid the political instability that followed the crisis.

Politicians in Jakarta were too busy consolidating themselves to pay attention to handling illegal logging. As a result many HPH companies could not continue operation. In 2005 only 257 units including integrated ones of 594 HPH companies remained active. The other 337 companies were no longer in operation.

The number of active HPH companies declined so was in the width of forest concession. In 2001, there were 375 HPH companies with 46.2 million hectares of forest concession. In 2003, the number dropped to 267 companies with 27.8 million hectares of of concession. In 2005, there only 257 active HPH with 24.8 million hectares of concession.

East Kalimantan has the largest number of HPH companies with 53 units followed by Papua with 48 companies, and Central Kalimantan 43 companies. Papua, however, leads in width of HPH area totaling 8.1 million hectares, followed by East Kalimantan's 5.2 million hectares and Central Kalimantan's 3 million hectares.

There are two categories of HPH namely one integrated with timber processing industry such as plywood factories and sawn timber factories; and one not integrated with timber processing industry. Among the 257 HPH companies only 68 having integrated HPH units with 7.02 million hectares of concession. Most or 189 companies operate non integrated units totaling 17.76 million hectares.

Part of the integrated units are integrated with plywood factories, block board factories and particle board factories and the rest with sawn timber, wood working and moulding factories.

HPH holders and width of areas

The following table shows holders of integrated and non integrated units of HPH. Among the holders of non-integrated units of HPH, 50 largest companies control 55.6% of the total areas of non-integrated HPH

Slashing of HPH licenses

The government has started reducing the number of HPH holders and their HPH areas since 2000. Production forests have been reduced in width that the number of trees ready for harvest has also declined. The government, therefore, decided to gradually reduced the number of HPH units and areas given to a company group.

In 2005 and 2006 the government launched anti illegal logging operations twice respectively called conservation forest operations I and II (OHL I & OHL II) The government also adopted firmer measure against failure to observe forestry regulations such as in the payment of reforestation funds. Those having arrears are strongly warned and failure to heed the warning could face their licenses revoked.

Among large company groups having their HPH units reduced include the Barito Pacific Group, Kalimanis Group and Kayu Lapis Group. The number of HPH units of the Barito Pacific group, was reduced from 29 with concessions totaling 3.02 million hectares to 18 with areas totaling 1.61 million hectares.

HPH in Papua

As forests have dwindled in size in Sumatra and Kalimantan forestry companies move to Papua. Among large companies having HPH units in Papua include Barito Pacific Group, Djajanti and Alas Kesuma.

Barito Pacific Group

This company is owned by tycoon Prayogo Pangestu. The company's daily operation is run by, Prayogo's son Agus Salim Pangestu. The group's logging subsidiaries in West Papua are:

* PT Mangole Timber Unit VI having 150,000 hectares of HPH

* PT Barito Cendrawasih having 228,000 hectares of HPH

Djajanti Group

This company group is owned by tycoon Burhan Uray alias Wong Ming Kiong alias Bong Sung On alias Swan An Bong/Sun On Bong/Sun On Hwang etc.. The group has logging concession under subsidiaries including PT Artika Optima Inti, PT Sagindo Sari Lestari, PT Budi Nyata (owned by Soejono Varinata, son of Burhan Uray), etc..

Wapoga Group

The Malaysian-based company is controlled by Tan Eng Kwee and Fredy Tang. PT Wapoga Mutiara Timber has three timber concessions covering approximately 800,000 hectares located at the Gulf of Cendrawasih, Manokwari and at Jayapura, all of which are located in Papua (formerly known as Irian Jaya). PT Wapoga Mutiara Industries has an integrated timber complex based in Biak, which operates downstream industry producing plywood, block-board, film face, sawn timber moulding products.

--PT Wapoga II = 155,000 ha

--PT Wapoga Mutiara Timber = 407,350 ha

--PT Wapoga Mutiara Timber Unit I = 178,300 ha

Korindo Group

Korindo is the fourth largest forestry company group in Indonesia, owned by South Korean In Young Sun. The group has two logging companies with concessions in West Papua as follows:

--PT Tunas Sawa Erma 244,850 ha, acquired in February 1993.

--PT Bade Makmur Orissa 462,600 ha, acquired in March 1993.

Alas Kusuma Group

The group is owned by PO Suwandi and Ibnu Hartomo, brother of deceased wife of former President Soeharto. Prabu Alaska is an affiliate of the Alas Kusuma. Group PT Prabu Alaska has HPH totaling 319,600 ha.

Hanurata Group:

Linked to Soeharto family and Indonesian military.

--PT Hanurata Coy Ltd 188,000 ha

PLANTATION FOREST (Hutan Tanaman Industri = (HTI)

In the middle of the 1980s' the government launched an ambitious program to build plantation forests (HTI) in a bid to preserve natural forests. HTI units were built especially in Sumatra and Kalimantan. The program is aimed at reducing dependence on natural forest for wood raw material needed by timber processing industry.

HTI units were built on denuded forest lands. HTI companies were offered subsidy by the government with interest free loan from Reforestation Fund, which was collected from HPH as fee to finance reforestation.

HTI concession was mainly to grow trees for pulp and wood works industries. HTI could be built in cooperation with HPH companies or independently. There were also HTI units called HTI-Trans built in transmigration areas built by migrant families. In Sumatra there were many transmigration centers with migrant families from Java and Bali. HTI-Trans grew mainly trees for woodwork industry.

Forest destruction rate, however, was faster than HTI development. In addition, the program came too late after large parts of forests had been destroyed. As many timber processing factories, which relied on logs form legal sources, could not continue operation for shortage of the raw material.

HTI Development

Until April 2006, the government issued licenses for 248 units of HTI covering a total area of 10 million hectares including 5,963 hectares for pulp HTI and 3,741 hectares for non pulp HTI.

Until the end of 2005, there were 229 licensed HTI companies but only 209 of them were operational covering a total area of 8.04 million hectares. The other 20 companies were no longer active for financial problem.

Development of HTI in concession areas, however, was too slow. Until 2005, the government issued licenses for HTI covering 8.04 million hectares but development in the past 10 years totaled only 3.41 million. Every year, only 100,000 - 200,000 hectares of HTI were built by the HTI licensees.

After the monetary crisis, development of HTI units declined sharply. In 1997, development covered 300,000 hectares, but the completion shrank to only 100,000 hectares in the following year and in 2001 it was only 67,000 hectares.

Government wants to speed up development of 5 million hectares of HTI

Most HTI projects are joint ventures between state forestry company PT INHUTANI I-V and private companies. Out of 4.26 million hectares of HTI areas to be built 3.26 million hectares are under PT Inhutani and its joint venture partners. Most of forest areas managed by PT Inhutani are formerly HPH areas left idle by HPH companies or left by HPH companies not having their license renewed.

Inhutani later formed joint ventures with private investors to develop the forest areas.

PT. Barito Pasific Timber Tbk.

PT Barito Pasific Timber Tbk has submitted applications for license to build HTI in Samarinda or Banjarmasin, but the answer is not forthcoming. The HTI project is expected to support its wood working industry to be expanded in Kalimantan. The location is selected on he river side areas of Mahakam and Barito rivers as the rivers will facilitate transport to HTI and factories.

Sinar Mas Forestry to build 1 million hectares of HTI

Sinar Mas Forestry (SMF) will build 1 million hectares of HTI until 2009 to guarantee feedstock for its pulp factories. Currently SMF has only 600,000 hectares land for HTI in five provinces--Jambi, Riau, West Kalimantan and East Kalimantan.

In its early phase, the group will build 100,000 hectares in South Sumatra. It will set aside US$ 1,200 in fund to finance every hectare of the project.

A director of Sinar Mas Forestry, Soebardjo said if SMF has 1 million hectares of HTI it will be self sufficient in raw material for its pulp industry. Currently the 612,000 hectares of HTI to be built in five provinces will be anough only to supply 50% of raw material needed by its pulp factories.

Sumalindo to rely more on HTI for raw material

PT Sumalindo Lestari Jaya Tbk is set to reduce dependence on natural forests for raw material and relay more on this.

Currently, PT Sumalindo Lestari Jaya Tbk (SLJ) has ecolabel certificate from Smart Wood, the Indonesian ecolabel agency (LEI), WWF--Indonesia, for its timber products. Company deputy director David said HTI trees grow much faster than natural forest trees. HTI production, therefore, is much higher.

PT SLJ has been able to produce logs from HTI having the same diameters with trees from natural forests in shorter time.

LOG PRODUCTION

Log Production fluctuated

There have been fears over the past several years that the country's natural forests would no longer be able to feed its timber processing industry. Log supplies have become scarce after the country's forestry industry especially plywood industry was developed in 1981.

Previously logs for plywood were supplied from forest concessions (HPH) owned by forestry industrialists. However, since early the 1990s many plywood factories could no longer rely on their HPH for logs. They have to buy logs from other places or island. Plywood factories in Sumatra, for example, have to buy logs from Kalimantan, but log supplies in Kalimantan have also been dwindling fast.

Until 1997 when the crisis began to hit the country, the country's log production was relatively high averaging 29 million cu.m a year, but after that year the production dropped to 19 million cu.m and then to 8 million cu.m at present.

The condition was worsened by rampant illegal logging especially after the monetary crisis. The lifting of log export ban on recommendation of the IMF, which was invited by the government to find the panacea for the crisis, contributed to rampant illegal logging. Indonesia has openly accused Malaysia and China of accepting illegally cut trees or smuggled logs from the country.

It is estimated that more than 7 million cu.m of logs were smuggled out of the country every year resulting in rapid rate of destruction of its rain forests. Based on data at the Forestry Ministry, around 7 million-8 million cu.m of trees were illegally cut . Part of the illegally cut trees are sold to local timber processing factories and the rest are and smuggled out of the country every year.

Log Production by Sources

The country's production of logs from natural forests has declined since 2001. In 2000, the country's log production totaled 13 million cu.m including 2.45 million cu.m from natural forests and 4.56 million cu.m from conversion forests. In 2000 and 2001, there were wide forests converted manly into oil palm plantations.

Many of the companies holding the conversion license have been known to misuse the license. They failed to grow oil palm trees or other crops in the lands already cleared from trees. They were interested only in the trees from the forests and had no intention of cultivating the land with oil palm trees or other commercial crops. As a result wide forest lands were left nude land unused in Kalimantan and other islands. In Kalimantan alone there were around 2 million hectares of formerly forest lands have become bush land. Since 2002, tree supply from conversion forests has declined sharply foreign timber processing factories to use stolen logs or illegally cut trees.

Plantation forests or industrial timber estate (HTI) have become more important. Since 2000, their contribution to the country's log production has increased substantially partly offsetting a decline in supply from conversion forests. In 2003, log production from HTI and plantation forests of state-owned forestry company Perum Perhutani began to exceed log production from natural forests. Contribution from Perum Perhutani is especially teakwood from Java.

Log Production by Provinces

The province of Riau has become the largest producer of logs in the country in the past several years. Its log production totaled 6.97 million cu.m in 2005.

Riau could maintain high production of log as it has long expanded HTI especially to feed its pulp industry.

However, the largest producer of logs from natural forests is Central Kalimantan, which produced 2.53 million cu.m, followed by East Kalimantan with production of 1.59 million cu.m in 2005. Log production in East Kalimantan is largely from forest conversion mainly into oil palm plantations. In Central Kalimantan log production comes mainly from production forests.

Overcrowded Java still produces considerable quantity of logs mainly teak wood logs also due to plantation forests, which have been developed since the Dutch colonial time. Now the teakwood forests in Java are managed by Perum Perhutani. Java produces around 978,000 cu.m of logs a year as against Papua's 700,000 cu.m and Sulawesi's 50,000 cu.m. In Papua, illegal logging has become rampant in the wake of the financial crisis, therefore, log production from that region is estimated to reach more than 1 million cu.m a year.

CASES INVOLVING HPH COMPANIES

Arrears in Reforestation Fund (DR)

Until the end of 2004, there were 24 HPH companies still having arrears in reforestation fund (DR) and resource royalty provision (PSDH) located in Papua, Maluku, Central Kalimantan, West Kalimantan, Southeast Sulawesi and Nanggroe Aceh Darussalam with total arrears of US$ 15.3 million and Rp 10.6 billion in reforestation fund and Rp 53 billion in PSDH.

Nine HPH companies having PSDH arrears warned

Nine HPH companies have received a third warning from the Forestry Ministry for failure to settle arrears of Rp 49.61 billion in PSDH and Rp 109.6 billion in reforestation fund. The companies are:

--PT Artika Optima Inti II

--PT Artika Optima Inti IV,

--PT Gunung Meranti,

--PT Benua Indah,

--PT Membramo Alas Mandiri,

--PT Budhi Nyata,

--PT Ketapang Indah Plywood,

--PT Kartika Kapuas Sari dan

--PT Trisetia Intiga.

The forestry minister said apart from the nine companies there are 13 other having arrears of Rp 24.3 billion in reforestation fund and PSDH. The arrears were reduced from Rp 1.3 trillion in Dec. 2003 to Rp 186.55 billion in Dec. 31, 2004, but the amount rose later to reach Rp 241 billion at present..

PT Gunung Meranti and Trisetia fully repaid DR arrears

PT Gunung Meranti and PT Trisetia Intiga fully repaid their DR debt in June to avoid the sanction by the government. With the repayment6, they were safe from having their license revoked.

PT Gunung Meranti repaid Rp 178.4 million (US$ 20,000) and PT Tisetia Intiga repaid Rp 354.15 million in PSDH and US$ 223,708 in DR.

The license of two of those failing to repay their PSDH and DRD debts have been revoked. They were PT Artika Optima Inti I in Papua with unpaid debt of US$ 808,015 in DR and Rp 3.9 billion in PSDH and. PT Bina Mahawana Wisesa in North Sulawesi with arrears of US$ 67,274.97 in DR and Rp 38.44 million in PSDH.

HPH companies having their licenses revoked

Apart from PT Artika Optima Inti I and PT Bina Mahawana Wisesa the government has revoked the license of 9 HPH companies in the past two years for DR and PSDH arrears.

Forestry Minister hands over 8 new IUPHHK and extension

Forestry Minister M.S. Kaban has handed over 8 licenses for forest wood utilization (IUPHHK) both for natural forests and plantation forests to support the program to revitalize the country's forestry industry. Four of the licenses are for

new companies and the rest for renewal of old licenses. Six of the licenses are for exploitation of natural forests totaling 318,065 hectares and two for plantation forests totaling 138,500 hectares.

STATE FORESTRY COMPANIES

There are six state companies operating in the forestry sector. They are PT Inhutani I--V with concessions outside Java and Perum Perhutani controlling all forests in Java.

PT Inhutani I--V

HPH units operated by PT Inhutani I - V total 4.24 million hectares and of which 964,000 hectares are managed alone by the companies and the remaining 3.27 million hectares are managed through joint ventures with private companies or cooperatives.

HTI units operated by PT Inhutani I-V total 3.26 million hectares including 611,000 hectares managed alone by the companies and 2.65 million hectares managed in joint venture.

The condition of many units of HPH operated by PT Inhutani's is bad after being fully exploited by HPH companies. As a result PT Inhutani's have reported large losses in the past several years.

Credits Rp 5.8 trillion for timber factories of PT Inhutani III, IV and V

Forestry Minister MS. Kaban has proposed special credit scheme to revitalize money losing PT Inhutani III, IV and VI. Kaban suggested the use of Rp 5.8 trillion of reforestation fund held by state Bank Mandiri.

The fund will be used to build acacia tree processing factories to produce veneer that is expected to turn out larger profit for the companies.

The three companies need additional capital and change in their business culture. Support in capital, however, is not easy to come from banks or other financers. They need to change their business first from logging to processed timber industry to increase the added value of their products. The prices of logs range only from US$ 20 to US$ 30 per cu.m as against US$ 70--US$ 80 per cu.m of veneer.

Perhutani asks government to allow it to determine its felling quota

Perum Perhutani has urged the government to allow it to determine its annual production of logs as the forests under its management are plantation forests the harvest of which has been planned before they are built. Perum Perhutani, therefore, knows the potential of its forests.

In 2005, log production of Perum Perhutani totaled 739,487 cu.m consisting of 344,204 cu.m of teakwood and 395,283 cu.m jungle forests trees. Log requirement in Java totals more than 2 million cu.m a year.

Silviculture, which requires felling and replanting could not properly be implemented with the annual felling quota system.

Perum PERHUTANI

Perum Perhutani manages all state forests in Java. Until 2005, its forest concession totaled 2.51 million hectares consisting of 1.84 million hectares of production forests and .0.67 million hectares of other forests.

Perum Perhutani continues to report losses

President of Perum Perhutani Transtoto Handadhari said the company posted a loss of more than Rp1 trillion a year as a result of falling prices of logs, illegal logging, and weak security. Weak security causes potential income of Rp 1 trillion a year.

An official of Perum Perhutani acknowledged poor and corrupt management had contributed to the loss suffered by the company every year in the past. He said the company produces 800,000 cu.m of wood a year and the trees were sold at a low prices by degrading the quality of the tree causing loss of a potential income of Rp 400 billion a year. The losses did not include potential income if security is good.

Central Java Perum Perhutani reported loss of Rp 130 billion in 2005 for illegal; logging of 65,000 cu.m. The loss was 50% smaller than in 2004 when around 130,000 cu.m of trees were lost stolen.

Forestry minister reviews state cooperation between state forestry Companies

PT Inhutani I and PT Intracawood Manufacturing

The government will review cooperation among state companies in the forestry sector considering continued losses reported by PT Inhutani I to V including in the handover of concession between PT Inhutani I and PT Intracawood Manufacturing in Kalimantan.

The forestry minister said he will review all cooperation involving state companies and private companies including between PT Inhutani I and PT Intracawood Manufacturing. Based on data at the forestry ministry, PT Inhutani has been given rights to manage 2.2 million hectares of forests in East Kalimantan, according to a decision of the forestry minister in 1976 which was revised in 2004. One of its units of HPH covering 243,920 ha, was managed in cooperation with PT Intracawood Manufacturing. On Oct. 18 n 2002, PT Intracawood Manufacturing proposed to establish the units under its management as a separate IUPHHK.

In 2004, the then forestry minister issued a license for PT Intracawood Manufacturing with a concession of 45 years with production quota of 104,817 cu.m a year.

However, M.S. Kaban said the IUPHHK held by PT Intracawood is not valid as it was given not through auction as required by the regulation.

President of PT Intracawood Siti Hartati Murdaya agued the decision of the forestry minister is valid and has been confirmed by state administrative court with a decision No. 168/G.TUN/2004/PTUNJKT on March 8, 2005, saying the procedure is not against the regulation.

WOOD PROCESSING INDUSTRY

Wood processing industry facing bankruptcy

Almost all timber processing companies in the country are on the brink of bankruptcy because of the difficulty in securing the raw material amid high credit

interest rate. Only around 40% of 115 plywood factories and 30% of 2,600 sawn timber factories remain in operation and they are operating much below their installed capacity.

Scarcity of raw material, financial problem and old machines worsen the condition of the country's timber processing industry facing competition in international market.

Those remaining in operation could not operate at full capacity. They are operating only at around 50% of heir installed capacity.

In 2004, the remaining 55 plywood factories in operation with an annual capacity of 5.52 million cu.m produced only 4 million cu.m of plywood.

Almost half or 26 of the 55 remaining plywood factories in operation are integrated with HPH, but hey still could not rely fully on the HPH for the raw material.

A number of large plywood factories have collapsed as a result of economic crisis in 1998-2000.

The Barito Pacific Group still managed to continue to become the largest plywood producer although its factories have been reduced from 8 to 4 units with an annual production capacity of 642,000 cu.m.

The factories of Kayu Lapis Indonesia Group has also been slashed from three to two units with an annual production capacity of 630,000 cu.m.

Alas Kesuma Group originally had 5 factories with an annual capacity of 349,000 cu.m, but now the number has been reduced to 3 with an annual capacity of 175,000 cu.m.

The South Korea's Korindo Group maintained three factories with an annual capacity of 309,000 cu.m from originally five factories with an annual capacity of 409,000 cu.m. This group has started diversified its business to agribusiness sector by building oil palm plantations.

Other ailing giants include the Djajanti Group now facing revocation of its license over failure to repay its DR debt. Its attempt to diversify business to fishery sector also failed in Papua and Maluku.

The Kalimanis group owned by tycoon Bob Hasan, who has served jail term for corruption has been virtually non existent.

PRODUCTION DEVELOPMENT OF WOOD PROCESSING INDUSTRY

A decline in production was recorded by timber processing industries both in the upstream to downstream sectors. The monetary crisis left timber processing companies beset by heavy debt burden that some of them have to stop operation.

Wood Panel Industry

A drastic fall was recorded in the country production of wood panel such as plywood, block board and particle board in the wake of the crisis as many plywood companies were forced to stop operation. Illegal logging became out of control with weak law enforcement as a result of vulnerable political instability in the process of transition toward greater democracy in the country.

While attentions were focused on overcoming political upheavals and security problem illegal logging that has caused extensive destruction to the environment and the tropical forests, escaped the spotlight. The problem faced by timber processing industry become worse than ever.

In 1996, the country's production of wood panel totaled 12 million cu.m including 10.2 million cu.m of plywood. In 2001, the production hit the rock bottom of 2.9 million cu.m. Many factories stopped production as log raw material became scarce while smuggling of logs was rampant.

Illegal loggers had contracts to supply buyers abroad leaving the domestic market short of the raw material. Countries such as China and Malaysia that used smuggled logs are able to sell plywood at more competitive prices.

Plywood Production by Provinces

The country's production of plywood has declined in the past three years. Many provinces have ceased to become plywood producers in 2005 such as Banten, East Java, West Irian Jaya Barat, and Maluku, which were previously major producers of plywood.

East Kalimantan and South Kalimantan remain the largest producers of plywood in the country. Log production in South Kalimantan has declined sharply forcing plywood producers in that province to buy logs from other areas.

Sawn wood and other processed timber

The country's production of sawn timber has declined from year to year in the past several years. Many sawn timber factories have no more forest concession to rely on for logs.

Many of sawn timber producers are small companies that could not easily buy logs form other provinces. Therefore, many of them rely on illegal loggers.

In 2000, the country's production of sawn timber totaled 2.7 million cu.m, but in 2001, the production fell to 674,000 cu.m. In 2005, the production began to scale up after the government launch anti illegal logging drive.

It is not easy to determine the country's production of sawn timber as they are located in remote areas and many of them do not want to report their production as they use illegally cut trees for raw material.

Production Of Sawn Timber By Provinces

There is no province dominant in sawn timber production. The producers are found in various areas.

Five largest producers are East Kalimantan, Central Java, West Kalimantan, Lampung, and South Kalimantan. Central Java is a major producer processing teakwood logs.

Exports of Processed Timber

The country's exports of processed timber has dropped sharply over the past several years to follow the growing scarcity in supply of log raw material. In addition the prices of plywood declined in international markets.

Indonesia lost an opportunity to gain from an increase in the prices of plywood rose in 2004 and 2005 as it could not increase its production because of the scarcity in raw material supply.

Japan still is the largest buyer for Indonesian plywood though exports to that country have also declined from 1.46 million tons in 2001 to 687,000 tons in 2005. Other major buyers are the United States and China.

The largest buyer for sawn timber is China to which exports totaled 7,800 tons in 2005. The figure is much smaller than the official figure recorded by China . The difference raised suspicion that illegal exports of timber has continued to that country.

Log Consumption

Log consumption for timber processing industry in the country was estimated at 39.97 million m3 in 2005. The estimate is based on assumption:

* The average content for plywood is 55%

* The average content for sawn timber is 62%

* 1 ton pulp will need 4.73 m3 of log

Pulp industry was the largest user of logs with consumption of 25.89 million m3 in 2005. Consumption for plywood and other wood panel industries totaled 11.04 million m3.

Pulp industry uses wood of various types in quality or sizes that almost all parts of trees could be used by pulp industry.

The ratio of plywood to log is the lowest as most of plywood factories in Indonesia use old machine which are no longer efficient. The machines leave too much waste in the process of production.

Plywood and sawn timber industries use only the tree trunks, but pulp industry also uses the branches. Therefore, pulp industry is more efficient in the use of trees.

Supplies of wood logs for timber processing industries are much larger than reported by the forestry ministry.

In 2005, log requirement totaled 39.97 million m3, as against official supplies of 24.19 million m3 from HPH and HTI as recorded by the ministry.

The difference of 15.78 million m3, therefore were supplied from other sources including illegal sources involving in illegal logging.

Before the government launched intensive anti illegal logging operations, the deficit believed to be covered by illegal suppliers totaled 27 million m3 in 2002 and 2003.

The decline in supply from illegal sources indicated decline in illegal logging as a result of the anti illegal logging drives by the government.

CONCLUSION

* The country's production forests have been reduced in size in the past several years forcing the government to downsize the concessions of HPH companies.

* The number of HPH companies have been reduced from 594 to 189 remaining active in operation until now controlling 17.76 million hectares of forests. Among the HPH units, 68 controlling 7.02 million hectares of forests are integrated with timber processing industries.

* Almost all logging companies have had their concessions reduced especially with the tighter regulation on extension of HPH license in the past five years. The Barito Pacific group, which has been the largest logging company, has its HPH areas cut from 3 million hectares to 1.6 million hectares.

* Not all of the remaining HPH companies could operate well. Many of them are burdened with large debt in DR that some of them have received or are facing sanctions from the government. Meanwhile logs are scarce from legal sources while illegal logging is rampant as HPH companies could not compete well in prices facing illegal loggers that could afford to sell their logs at much cheaper prices as they do not pay tax and other levies. Growing scarcity of logs affected the operation of timber processing companies such as plywood factories.

* From 115 plywood factories in 2001 only 55 remaining in operation at present and most of them are operating much below heir installed capacity

* The Kalimanis Group, which is owned by Bob Hasan, was formerly a large plywood producer, but all of its plywood subsidiaries have stopped operation.

* Many plywood companies have laid off workers because of difficulty in securing raw material and failure in facing competition against Chinese and Malaysian suppliers.

* With dwindling production forests, the country will rely much on plantation forests (HTI) as the main source of raw material for timber processing industry. In the past three years, the government has sought to boost development of HTI by issuing new licenses. However so far only 1.2 million hectares of 8 million hectares of forests lands reserved for HTI projects have been planted with tree seedlings. Every year, planting is completed over 100,000 - 120,000 hectares of HTI land. Financial difficulty remains the main factor slowing progress in the development of HTI projects. Among those succeeding in developing HTI include Sumalindo and Barito Pacific. In the future only timber processing companies having HTI are expected to survive in the country.
Table - 1
Development of HPH companies
 2001

No Province Unit Width (ha)

 1 Aceh (NAD) 12 900,544
 2 North Sumatra 9 608,281
 3 Jambi 13 792,594
 4 Riau 25 1,628,594
 5 West Sumatra 6 333,256
 6 South Sumatra 6 819,650
 7 Bengkulu 2 90,375
 8 West Kalimantan 26 1,993,139
 9 South Kalimantan 5 602,670
10 Central Kalimantan 63 5,203,256
11 East Kalimantan 74 8,168,217
12 Maluku*) 28 2,257,942
13 Papua 50 10,751,613
14 South Sulawesi 6 338,602
15 Central Sulawesi 14 1,011,445
16 Southeast Sulawesi 2 416,000
17 North Sulawesi 9 470,384
18 Gorontalo
19 West Nusa Tenggara 1 31,550
 TOTAL 351 36,418,112

 2003

No Province Unit Width (ha)

 1 Aceh (NAD) 8 524,644
 2 North Sumatra 4 196,200
 3 Jambi 8 545,559
 4 Riau 15 889,992
 5 West Sumatra 5 299,556
 6 South Sumatra 2 190,000
 7 Bengkulu
 8 West Kalimantan 18 1,125,400
 9 South Kalimantan 4 302,931
10 Central Kalimantan 44 3,444,215
11 East Kalimantan 61 5,891,306
12 Maluku*) 23 1,816,710
13 Papua 49 10,646,613
14 South Sulawesi 5 287,802
15 Central Sulawesi 11 844,835
16 Southeast Sulawesi 2 416,000
17 North Sulawesi 3 148,650
18 Gorontalo 4 195,500
19 West Nusa Tenggara 1 31,550
 TOTAL 267 27,797,463

 2005

No Province Unit Width (ha)

 1 Aceh (NAD) 7 435,784
 2 North Sumatra 4 196,200
 3 Jambi 8 762,810
 4 Riau 14 849,805
 5 West Sumatra 5 420,580
 6 South Sumatra 2 213,000
 7 Bengkulu
 8 West Kalimantan 18 1,911,800
 9 South Kalimantan 4 265,190
10 Central Kalimantan 43 3,017,950
11 East Kalimantan 57 5,210,503
12 Maluku*) 22 1,654,980
13 Papua 48 8,062,255
14 South Sulawesi 5 287,802
15 Central Sulawesi 10 771,579
16 Southeast Sulawesi 2 392,000
17 North Sulawesi 7 298,600
18 Gorontalo
19 West Nusa Tenggara 1 31,550
 TOTAL 257 24,782,388

Source: Data Consult, Forestry ministry

Table - 2
Number of active integrated and non integrated units
of HPH by provinces

 HPH non-integrated

No. Provinces Unit Width
 (ha)

 1 Aceh 3 252,500
 2 North Sumatra 3 137,610
 3 Jambi 6 535,810
 4 Riau 12 762,785
 5 West Sumatra 3 211,980
 6 South Sumatra 1 79,000
 7 West Kalimantan 13 1,271,500
 8 South Kalimantan 1 80,000
 9 Central Kalimantan 36 2,357,323
 10 East Kalimantan 43 4,001,278
 11 Maluku 16 983,585
 12 Papua 33 5,643,040
 13 South Sulawesi 1 35,162
 14 Central Sulawesi 10 771,579
 15 Southeast Sulawesi 2 392,000
 16 North Sulawesi 6 248,100
 17 West Nusa Tenggara
 Total 189 17,763,252

 HPH integrated

No. Provinces Unit Width
 (ha)

 1 Aceh 4 183,284
 2 North Sumatra 1 58,590
 3 Jambi 2 227,000
 4 Riau 2 87,020
 5 West Sumatra 2 208,600
 6 South Sumatra 1 134,000
 7 West Kalimantan 5 640,300
 8 South Kalimantan 3 185,190
 9 Central Kalimantan 7 660,627
 10 East Kalimantan 14 1,209,225
 11 Maluku 6 671,395
 12 Papua 15 2,419,215
 13 South Sulawesi 4 252,640
 14 Central Sulawesi
 15 Southeast Sulawesi
 16 North Sulawesi 1 50,500
 17 West Nusa Tenggara 1 31,550
 Total 68 7,019,136

 Total active units of HPH

No. Provinces Unit Width
 (ha)

 1 Aceh 7 435,784
 2 North Sumatra 4 196,200
 3 Jambi 8 762,810
 4 Riau 14 849,805
 5 West Sumatra 5 420,580
 6 South Sumatra 2 213,000
 7 West Kalimantan 18 1,911,800
 8 South Kalimantan 4 265,190
 9 Central Kalimantan 43 3,017,950
 10 East Kalimantan 57 5,210,503
 11 Maluku 22 1,654,980
 12 Papua 48 8,062,255
 13 South Sulawesi 5 287,802
 14 Central Sulawesi 10 771,579
 15 Southeast Sulawesi 2 392,000
 16 North Sulawesi 7 298,600
 17 West Nusa Tenggara 1 31,550
 Total 257 24,782,388

Source: Forestry Ministry, Data Consult

Table - 3
List of holders of integrated and non-integrated HPH. 2005

50 largest holders of non-integrated units of HPH- 2005

No. Name of company Province

 1 Anuraga West Kalimantan
 2 Membramo Alaa Mandiri, PT Papua
 3 I T C I, P T East Kalimantan
 4 Hanurata Coy Ltd (Sorong) Papua
 5 Essam Timber East Kalimantan
 6 Intisixta, PT Southeast Sulawesi
 7 Rimba Megahlestari Papua
 8 Teluk Bintuni Mina Agro Karya Papua
 9 ITCI Kayan Hutani (IKANI), PT East Kalimantan
 10 Daya Sakti Krida Unggul Central Kalimantan
 11 Wana Galang Utama Papua
 12 Jati Dharma Indah, PT Papua
 13 Diadyani Timber Papua
 14 Wanatirta Ediwibowo, PT Papua
 15 Belayan River Timber East Kalimantan
 16 Dalek Hutani Esa (Eks PT. Dalek Esa Jambi
 Raya), PT
 17 Mugitriman Internasional, PT East Kalimantan
 18 Prasarana Marga, PT Papua
 19 Tunas Sawaerma Papua
 20 Bangun Kayu Irian Papua
 21 Hanurata Coy LTD (jayapura) Papua
 22 Kamundan Raya, PT Papua
 23 Yotefa Sarana Mandiri, PT Papua
 24 Digul Daya Sakti Papua
 25 Irma Sulindo, PT Papua
 26 Kayu Perkasa Bumi Makmur Papua
 27 Damai Setia Tama Timber Papua
 28 E.KAL. Hutama (WAPOGA II), PT Papua
 29 Mangole Unit VI/PT. Phonik Harapan Tbr, PT Papua
 30 Wukira Sari Bhakti Papua
 31 Gema Hutani Lestari (d/h PT. Gema Maluku
 Sanubari), PT
 32 Nusantara Plywood IV Central Kalimantan
 33 Multi Wahana Wijaya Papua
 34 Bina Daya Tetra Central Kalimantan
 35 Siberida Wana Sejahtera Riau
 36 Telagamas Kalimantan, PT East Kalimantan
 37 Porodisa Trading & Industrial Company Ltd East Kalimantan
 38 Balantak Rimba Rejeki, PT Central Sulawesi
 39 Krueng Sakti, PT Aceh
 40 Akhates Plywood Central Kalimantan
 41 A.O.I. UNIT IV, PT PAPUA
 42 Giri Ekawana, PT East Kalimantan
 43 Maruwai Timber (Barito Pacific Timber IV) Central Kalimantan
 44 Sumalindo Lestari Jaya V (Eks PT. Madyakara East Kalimantan
 Pacific), PT
 45 Sumalindo Lestari Jaya V, PT East Kalimantan
 46 Darmali Mahkota Tbr PAPUA
 47 Wahana Sari Sakti,PT Central Sulawesi
 48 Tunggal Pemenang Central Kalimantan
 49 Roda Mas Timber Kalimantan Coy East Kalimantan
 50 Karda Trades,PT Central Kalimantan
 Sub Total (50 companies)
 Others (139 companies)
 Total (189 companies)

 Width
 of HPH
No. Name of coman (ha)

 1 Anuraga 691,700
 2 Membramo Alaa Mandiri, PT 691,700
 3 I T C I, P T 470,200
 4 Hanurata Coy Ltd (Sorong) 417,570
 5 Essam Timber 355,000
 6 Intisixta, PT 296,000
 7 Rimba Megahlestari 250,000
 8 Teluk Bintuni Mina Agro Karya 239,000
 9 ITCI Kayan Hutani (IKANI), PT 218,375
 10 Daya Sakti Krida Unggul 212,000
 11 Wana Galang Utama 212,000
 12 Jati Dharma Indah, PT 207,410
 13 Diadyani Timber 206,000
 14 Wanatirta Ediwibowo, PT 206,000
 15 Belayan River Timber 204,000
 16 Dalek Hutani Esa (Eks PT. Dalek Esa 200,000
 Raya), PT
 17 Mugitriman Internasional, PT 200,000
 18 Prasarana Marga, PT 200,000
 19 Tunas Sawaerma 200,000
 20 Bangun Kayu Irian 191,000
 21 Hanurata Coy LTD (jayapura) 188,500
 22 Kamundan Raya, PT 187,800
 23 Yotefa Sarana Mandiri, PT 182,000
 24 Digul Daya Sakti 178,800
 25 Irma Sulindo, PT 174,540
 26 Kayu Perkasa Bumi Makmur 171,100
 27 Damai Setia Tama Timber 160,000
 28 E.KAL. Hutama (WAPOGA II), PT 155,000
 29 Mangole Unit VI/PT. Phonik Harapan Tbr, PT 150,000
 30 Wukira Sari Bhakti 150,000
 31 Gema Hutani Lestari (d/h PT. Gema 148,450
 Sanubari), PT
 32 Nusantara Plywood IV 140,000
 33 Multi Wahana Wijaya 139,000
 34 Bina Daya Tetra 134,000
 35 Siberida Wana Sejahtera 132,500
 36 Telagamas Kalimantan, PT 124,675
 37 Porodisa Trading & Industrial Company Ltd 122,524
 38 Balantak Rimba Rejeki, PT 122,524
 39 Krueng Sakti, PT 115,000
 40 Akhates Plywood 112,000
 41 A.O.I. UNIT IV, PT 110,700
 42 Giri Ekawana, PT 110,000
 43 Maruwai Timber (Barito Pacific Timber IV) 105,000
 44 Sumalindo Lestari Jaya V (Eks PT. Madyakara 100,000
 Pacific), PT
 45 Sumalindo Lestari Jaya V, PT 100,000
 46 Darmali Mahkota Tbr 100,000
 47 Wahana Sari Sakti,PT 100,000
 48 Tunggal Pemenang 99,800
 49 Roda Mas Timber Kalimantan Coy 99,520
 50 Karda Trades,PT 98,400
 Sub Total (50 companies) 9,879,788
 Others (139 companies) 7,883,464
 Total (189 companies) 17,763,252

Holders of integrated units of HPH 2005

No. Name of company Province

 1 Wapoga Mutiara Industries (Wapoga III), PT PAPUA
 2 Intimpura Timber PAPUA
 3 Prabu Alaska PAPUA
 4 Duta Rendra Mulia Sejahtera East Kalimantan
 5 Rimba Kayu Arthamas PAPUA
 6 Benua Indah West Kalimantan
 7 Risana Indah Forest Industries PAPUA
 8 Prima Maluku Timber MALUKU
 9 Erna Djuliawati Central Kalimantan
 10 Wapoga Mutiara Timber I PAPUA
 11 Suka Jaya Makmur West Kalimantan
 12 Tunggal Agatis Indah Wood Industries MALUKU
 13 Agoda Rimba Irian PAPUA
 14 Andalas Merapi Timber West Sumatra
 15 Asia Log JAMBI
 16 SBA Wood Industries South Sumatra
 17 Kartika Kapuas Sari West Kalimantan
 18 Indowana Arga Timber East Kalimantan
 19 Limbang Ganeca East Kalimantan
 20 Hasrat Wiramandiri PAPUA
 21 Rante Mario South Sulawesi
 22 Susukan Agung East Kalimantan
 23 Mangole Timber Producers/Mangole Timber II MALUKU
 24 Budhi Nyata PAPUA
 25 Hutan Domas Raya Central Kalimantan
 26 Kodeco Timber South Kalimantan
 27 Inhutani II East Kalimantan
 28 Tri Tunggal Eboni Corporation Central Kalimantan
 29 Gunung Meranti Central Kalimantan
 30 Budhi Nyata MALUKU
 31 Rimba Karya Indah JAMBI
 32 Batasan PAPUA
 33 Segara Timber Co Ltd East Kalimantan
 34 Arfak Indra PAPUA
 35 Gunung Gajah Abadi East Kalimantan
 36 Jati Subur Raya MALUKU
 37 Aceh Inti Timber Company Ltd, PT ACEH
 38 Bintuni Utama Murni Wood Industries PAPUA
 39 Kurnia Kapuas Plywood Industrial Co. Ltd West Kalimantan
 40 Kayu Tribuana Rama Cental Kalimantan
 41 Kedungmadu Tropical Wood East Kalimantan
 42 Sari Bumi Kusuma West Kalimantan
 43 Wana Rimba Kencana East Kalimantan
 44 Dharma Mukti Persada PAPUA
 45 Austral Byna Cental Kalimantan
 46 Duta Maju Timber West Sumatra
 47 Keang Nam Dev. Co. Ltd Nort Sumatra
 48 Jaya Timber Trading & Industrial Co. Ltd East Kalimantan
 49 Alas Aceh Perkasa ACEH
 50 Inimex Intra North Sulawesi
 51 Aya Yayang Indonesia South Kalimantan
 52 Dharma Satya Nusantara East Kalimantan
 53 Inhutani I South Sulawesi
 54 Nanjak Makmur RIAU
 55 Hasil Bumi Indonesia MALUKU
 56 Bade Makmur Orissa PAPUA
 57 Meranti Mustika Cental Kalimantan
 58 Meranti Sakti Indonesia Plywood (Meranti East Kalimantan
 Sakti Indonesia II)
 59 Panca Usaha Palopo Plywood South Sulawesi
 60 Artika Optima Inti Unit II PAPUA
 61 Lamuri Timber ACEH
 62 Suwaran Jaya Kusuma East Kalimantan
 63 Sampaga Utama Sakti South Sulawesi
 64 Balikpapan Forest Industries Ltd East Kalimantan
 65 Siak Raya Timber RIAU
 66 Sumpol Timber South Kalimantan
 67 Veneer Product Indonesia West NusaTenggara
 68 Wiralanao Ltd ACEH

 Width
No. Name of company of HPH

 1 Wapoga Mutiara Industries (Wapoga III), PT 407,350
 2 Intimpura Timber 333,000
 3 Prabu Alaska 319,600
 4 Duta Rendra Mulia Sejahtera 215,000
 5 Rimba Kayu Arthamas 204,000
 6 Benua Indah 197,000
 7 Risana Indah Forest Industries 197,000
 8 Prima Maluku Timber 191,000
 9 Erna Djuliawati 184,206
 10 Wapoga Mutiara Timber I 178,800
 11 Suka Jaya Makmur 171,300
 12 Tunggal Agatis Indah Wood Industries 160,000
 13 Agoda Rimba Irian 155,000
 14 Andalas Merapi Timber 150,000
 15 Asia Log 140,000
 16 SBA Wood Industries 134,000
 17 Kartika Kapuas Sari 131,000
 18 Indowana Arga Timber 127,000
 19 Limbang Ganeca 123,200
 20 Hasrat Wiramandiri 119,700
 21 Rante Mario 114,000
 22 Susukan Agung 107,200
 23 Mangole Timber Producers/Mangole Timber II 101,800
 24 Budhi Nyata 100,000
 25 Hutan Domas Raya 99,870
 26 Kodeco Timber 99,570
 27 Inhutani II 99,100
 28 Tri Tunggal Eboni Corporation 98,000
 29 Gunung Meranti 95,265
 30 Budhi Nyata 89,595
 31 Rimba Karya Indah 87,000
 32 Batasan 87,000
 33 Segara Timber Co Ltd 85,725
 34 Arfak Indra 83,330
 35 Gunung Gajah Abadi 81,000
 36 Jati Subur Raya 81,000
 37 Aceh Inti Timber Company Ltd, PT 80,804
 38 Bintuni Utama Murni Wood Industries 76,925
 39 Kurnia Kapuas Plywood Industrial Co. Ltd 75,000
 40 Kayu Tribuana Rama 73,017
 41 Kedungmadu Tropical Wood 71,000
 42 Sari Bumi Kusuma 66,000
 43 Wana Rimba Kencana 65,000
 44 Dharma Mukti Persada 65,000
 45 Austral Byna 63,440
 46 Duta Maju Timber 58,600
 47 Keang Nam Dev. Co. Ltd 58,590
 48 Jaya Timber Trading & Industrial Co. Ltd 53,200
 49 Alas Aceh Perkasa 52,040
 50 Inimex Intra 50,500
 51 Aya Yayang Indonesia 49,500
 52 Dharma Satya Nusantara 49,000
 53 Inhutani I 48,640
 54 Nanjak Makmur 48,370
 55 Hasil Bumi Indonesia 48,000
 56 Bade Makmur Orissa 47,915
 57 Meranti Mustika 46,829
 58 Meranti Sakti Indonesia Plywood (Meranti 46,200
 Sakti Indonesia II)
 59 Panca Usaha Palopo Plywood 46,000
 60 Artika Optima Inti Unit II 44,595
 61 Lamuri Timber 44,400
 62 Suwaran Jaya Kusuma 44,000
 63 Sampaga Utama Sakti 44,000
 64 Balikpapan Forest Industries Ltd 42,600
 65 Siak Raya Timber 38,650
 66 Sumpol Timber 36,120
 67 Veneer Product Indonesia 31,550
 68 Wiralanao Ltd 6,040

Source: Forestry Ministry, Data Consult

Table - 4
Slashing of HPH number and width HPH areas of
large company groups slashed until 2005

 License 2001

 Number Total
No Name of Group of HPH (000 ha)

 1 Barito Pacific 29 3,017
 2 Kayu Lapis Indonesia 18 2,733
 3 Korindo 4 1,181
 4 Budhi Nusa 7 1,138
 5 Prabu 4 1,086
 6 Wapoga 3 1,031
 7 Kalimanis 9 1,866
 8 Alas Kusuma 13 1,543
 9 Hanurata 3 758
10 Bumi Raya Utama 2 234
11 Sumalindo 8 870
12 Kalamur 3 504
13 Djajanti 9 1,112
14 Daya Sakti 6 876
15 Mujur Timber 7 441
16 Bina Samakhta 4 379
17 Benua Indah 5 563
18 Tanjung Johor 2 292
19 Hutan Raya 5 528
20 Raja Garuda Mas 4 389
 Total 145 20,538

 Reduction

 Number Total
No Name of Group of HPH (000 ha)

 1 Barito Pacific 11 1,405
 2 Kayu Lapis Indonesia 10 1,295
 3 Korindo 0 -
 4 Budhi Nusa 0 -
 5 Prabu 0 -
 6 Wapoga 0 -
 7 Kalimanis 4 957
 8 Alas Kusuma 1 782
 9 Hanurata 0 -
10 Bumi Raya Utama 1 168
11 Sumalindo 2 175
12 Kalamur 0 104
13 Djajanti 6 731
14 Daya Sakti 3 568
15 Mujur Timber 2 142
16 Bina Samakhta 2 135
17 Benua Indah 2 323
18 Tanjung Johor 1 60
19 Hutan Raya 2 328
20 Raja Garuda Mas 2 200
 Total 49 7,371

 HPH area remaining
 by 2005

 Number Total
No Name of Group of HPH (000 ha)

 1 Barito Pacific 18 1,612
 2 Kayu Lapis Indonesia 8 1,438
 3 Korindo 4 1,181
 4 Budhi Nusa 7 1,138
 5 Prabu 4 1,086
 6 Wapoga 3 1,031
 7 Kalimanis 5 909
 8 Alas Kusuma 12 761
 9 Hanurata 3 758
10 Bumi Raya Utama 1 750
11 Sumalindo 6 696
12 Kalamur 3 400
13 Djajanti 3 381
14 Daya Sakti 3 318
15 Mujur Timber 5 299
16 Bina Samakhta 2 244
17 Benua Indah 3 240
18 Tanjung Johor 3 232
19 Hutan Raya 3 200
20 Raja Garuda Mas 3 189
 Total 99 13,861

Table - 5
Logging subsidiaries of the Djajanti Group in Papua

Name of HPH Holder Area (ha)

Artika Optima Inti Unit II 170,000 ha
Artika Optima Inti Nusantara III 106,000 ha
Artika Optima Inti Nusantara Unit I *) 435,000 ha
Sagindo Sari Lestari 960,000 ha
Artika Optima Inti Nusantara Unit VI 150,000 ha
 (previously PT Perdana Waropen)
Budi Nyata 300,000 ha
Kamundan Raya 187,300 ha
Teluk Bintuni Mina Agro Karya 239,000 ha
Agoda Rimba Irian 155,000 ha

Notes: *) Cancelled in October 2004

Source: Forestry Ministry, Data Consult

Table - 6
Number of Plantation forest HTI companies in operation
by provinces, 2005

 Number of
No. Provinces companies Area (ha)

 1 Aceh 3 20,500
 2 Jambi 15 742,980
 3 West Kalimantan 20 1,155,949
 4 South Kalimantan 18 320,775
 5 Central Kalimantan 24 587,855
 6 East Kalimantan 36 1,057,873
 7 Lam un 6 131,467
 8 Maluku 7 78,306
 9 West Nusa Ten ara 1 48,000
 10 East Nusa Ten ara 1 6,880
 11 Papua 10 1,560,000
 12 Riau 31 800,459
 13 South Sulawesi 5 76,883
 14 Central Sulawesi 4 69,260
 15 Southeast Sulawesi 4 94,945
 16 West Sumatra 4 66,420
 17 South Sumatra 9 481,806
 18 North Sumatra 11 738,331
 Total 209 8,038,689

Source: Forestry Ministry, Data Consult

Table - 7
Plantation forest (HTI) development, 1989-2005

 HTI - Pulp Woodwork
Year PP (ha) (CWP) (ha) LSS (ha)

1989 29,160 102,495 0
1990 65,661 104,213 0
1991 104,222 109,769 0
1992 83,962 150,891 0
1993 113,066 188,646 71,895
1994 117,940 100,873 77,973
1995 162,200 103,000 61,248
1996 172,320 123,897 94,324
1997 100,883 77,184 88,542
1998 82,604 52,366 45,536
1999 85,744 51,749 *)
2000 58,152 21,597 *)
2001 56,299 10,673 0
2002 87,614 13,873 0
2003 100,497 18,755 0
2004 112,714 19,200 0
2005 142,598 20,527 0
Total 1,675,636 1,269,708 439,518

 Self
Year Other management Total HTI

1989 0 0 131,655
1990 0 0 169,874
1991 0 0 213,991
1992 0 0 234,853
1993 0 0 373,607
1994 0 0 296,786
1995 0 0 326,448
1996 0 0 390,541
1997 0 2,500 269,109
1998 0 2,072 182,578
1999 0 1,169 138,662
2000 0 2,569 82,318
2001 0 500 67,472
2002 1,121 15,900 118,508
2003 1,456 3,983 124,691
2004 0 0 131,914
2005 0 0 163,125
Total 2,577 28,693 3,416,132

PP = Pulp Plantation

CWP = Construction Wood Plantation

LSS = Local Specific Species

Source: Forestry Ministry, Data Consult

Table - 8
50 HTI companies with largest concessions

 Width
No. Name of company Province Concession

 1 Permata Wanatimur Lestari PAPUA 300,000
 2 Wanakerta Eka Lestari, PT PAPUA 300,000
 3 Finnantara Intiga West Kalimantan 299,700
 4 Eucaliptus Tanaman Lestari, PT PAPUA 298,900
 5 Musi Hutan Persada South Sumatra 296,400
 6 Inti Indorayon Utama Tbk/Toba North Sumatra 269,060
 Pulp Lestari
 7 Sumatera Sinar Plywood Ind., PT North Sumatra 250,000
 8 Inhutani V (2), PT JAMBI 243,620
 9 Maharani Rayon Jaya, PT PAPUA 206,800
 10 Okaba Rimba Makmur, PT PAPUA 206,800
 11 Wira Karya Sakti, PT JAMBI 191,130
 12 Tanjung Redep Hutani East Kalimantan 180,330
 13 Kertas Basuki Rahmat, PT West Kalimantan 173,938
 14 ITCI Hutani Manun al East Kalimantan 161,127
 15 Riau Andalan Pulp & Paper RIAU 159,500
 16 Inhutani III (Nanga Pinoh), PT West Kalimantan 119,080
 17 Nityasa Idola, PT West Kalimantan 113,196
 18 Inhutani III (Sanggau), PT West Kalimantan 101,800
 19 Korintiga Hutani, PT Cental Kalimantan 92,150
 20 Satria Perkasa Aun RIAU 76,017
 21 Simalungun Karet Lestari, PT North Sumatra 74,899
 22 Ceria Karya Pranawa, PT Central Kalimantan 74,730
 23 Mayangkara Tanaman Industry West Kalimantan 73,160
 24 Sinar WEST KALIMANTAN. Raya West Kalimantan 72,315
 25 Sumalindo Lestari Jaya (eks East Kalimantan 70,300
 Birawa dan E.KAL.ur), PT
 26 KOPSIMER East Kalimantan 70,000
 27 Fajar SuryaSwasembada, PT East Kalimantan 66,659
 28 Inhutani V (Eks. HPH PT. Loka JAMBI 65,925
 Rahayu & PT. Sadarnita)
 29 Inhutani III (Muaratewah), PT Cental Kalimantan 65,000
 30 Daya Tani Kalbar. West Kalimantan 56,060
 31 Inhutani-V (Way Rebang - LAMPUNG 55,157
 Muara Dua), PT
 32 Perawang Sukses Perkasa RIAU 50,725
 Industri
 33 Inhutani-I (Longnah), PT East Kalimantan 50,295
 34 Inhutani II (Semaras), PT South Kalimantan 50,000
 35 Source Mitra Jaya, PT Central Kalimantan 49,800
 36 Inhutani V (1), PT JAMBI 49,500
 37 Darnmore Bau Permai, PT PAPUA 49,500
 38 Kalimantan Ham aran Sawit, PT PAPUA 49,500
 39 Mitra Ja ya Aro Palm, PT PAPUA 49,500
 40 Source Mitra Jaya, PT PAPUA 49,500
 41 Sungai Rangit, PT PAPUA 49,500
 42 Fendi Hutani Lestari West Nusa Tenggara 48,000
 43 Mentarimulti Sarana Abadi, PT Central Kalimantan 47,280
 44 Rimba Abadi Inti Jaya, PT Central Kalimantan 46,500
 45 Mapala Rabda/KTH Tuah Sekato RIAU 46,330
 46 Riau Timas, PT East Kalimantan 45,000
 47 Guhara Cellulosa, PT North Sulawesi 45,000
 48 Pakerin South Sumatera 43,700
 49 Sumatera S Iva Lestari, PT North Sumatera 42,530
 50 Dharma Hutani Lestari LAMPUNG 41,210

Source: Forestry ministry, Data Consult

Table - 9
Log production Development, 1993 - 2005

Year Log (cu.m) Growth

1993 26,848,011
1994 24,027,277 -11
1995 24,850,061 3
1996 26,069,282 5
1997 29,520,322 13
1998 19,026,944 -36
1999 20,619,942 8
2000 13,798,240 -33
2001 10,051,480 -27
2002 8,659,968 -14
2003 *) 11,423,501 32
2004 *) 13,548,938 19
2005 **) 24,192,173 79

Note: *) revised figures; **) provisional figure

Source: Directorate General of Forestry Production

Table - 10
Log production and sources of supply in the past 5 years

(000 cu. m)

Source of production 2000 * 2001 2002 **

Natural forests 3,450 1,809 3,020
Conversion forests 4,565 2,324 183
People's forests 489 0 0
Perum Perhutani's HTI 1,511 1,455 1,559
Other timber estate (HTI) 3,784 5,567 4,243
Total 13,798 11,155 9,004

Source of production 2003 2004 2005 *)

Natural forests 4,105 3,511 5,690
Conversion forests 956 1,632 3,614
People's forests 60 154 1,312
Perum Perhutani's HTI 977 924 758
Other timber estate (HTI) 5,326 7,329 12,818
Total 11,424 13,549 24,192

Note: *) provisional figure; HTI = Plantation Forest

Source: Directorate General of Forestry Production

Table - 11
Production of logs by sources, 2005 *)

Provinces Natural forests (cu.m)

 AWP TUS

Aceh 1,182 36,931
North Sumatra 66,552 0
West Sumatra 100,407 143,286
Riau 97,395 266,119
Jambi 77,864 21,232
South Sumatra 0 170,126
Bangka Belitung 0 0
Ben kulu 13,207 0
Lampung 0 0
West Java 0 0
Central Java 0 0
East Java 0 0
Bali 0 0
West Nusatenggara 0 0
East Nusatenggara 0 0
West Kalimantan 255,644 0
Central Kalimantan 2,537,402 1,523,548
South Kalimantan 54,508 25,293
East Kalimantan 1,588,639 1,173,105
North Sulawesi 7,076 44,567
Gorontalo 0 0
Southeast Sulawesi 5,457 0
South Sulawesi 0 0
West Sulawesi 60,135 5,985
Maluku 81,167 0
North Maluku 308,874 156,307
West Irian Jaya 239,129 0
Papua 195,415 47,848
Total 5,690,050 3,614,347

Provinces Plantation forests (cu.m)

 Perhutani HTI

Aceh 0 303
North Sumatra 0 1,079,797
West Sumatra 0 0
Riau 0 6,607,860
Jambi 0 1,708,945
South Sumatra 0 2,122,952
Bangka Belitung 0
Ben kulu 0 0
Lampung 0 84,804
West Java 180,853 0
Central Java 310,059 0
East Java 267,081 0
Bali 0 0
West Nusatenggara 0 0
East Nusatenggara 0 0
West Kalimantan 0 194,387
Central Kalimantan 0 0
South Kalimantan 0 162,033
East Kalimantan 0 777,136
North Sulawesi 0 0
Gorontalo 0 0
Southeast Sulawesi 0 0
South Sulawesi 0 0
West Sulawesi 0
Maluku 0 7,473
North Maluku 0 72,509
West Irian Jaya 0 0
Papua 0 0
Total 757,993 12,818,199

 People's
 forests
Provinces (cu.m) Total

Aceh 494 38,909
North Sumatra 191,525 1,337,874
West Sumatra 0 243,693
Riau 0 6,971,374
Jambi 37,894 1,845,935
South Sumatra 51,722 2,344,800
Bangka Belitung 12,523 12,523
Ben kulu 16,728 29,935
Lampung 311,532 396,336
West Java 0 180,853
Central Java 0 310,059
East Java 0 267,081
Bali 23,298 23,298
West Nusatenggara 3,947 3,947
East Nusatenggara 475 475
West Kalimantan 0 450,030
Central Kalimantan 152,801 4,213,751
South Kalimantan 328,952 570,786
East Kalimantan 0 3,538,880
North Sulawesi 4,217 55,860
Gorontalo 10,940 10,940
Southeast Sulawesi 45,222 50,679
South Sulawesi 81,431 81,431
West Sulawesi 5,320 71,440
Maluku 0 88,640
North Maluku 32,561 570,250
West Irian Jaya 0 239,129
Papua 0 243,263
Total 1,311,584 24,192,173

Note: *) revised figures **) provisional figure; AWP = Annual
Work Planning Source: Directorate General of Forestry Production;
TUS = Timber Utilization Concession

Table - 12
11 HPH companies having their licenses revoked, 2004 -2006

HPH Holder Province

2004
PT Wana Yasa Kahuripan Indonesia Center Kalimantan
PT Rimba Karya Indah Jambi
PT Wanakrida Utama Maluku
PT Mutiara Kalja Permai East Kalimantan
PT Rimba Baru Lestari Papua

2005
PT Seberidawana Riau
PT Budhi Nyata Maluku
PT Bina Mahawana Wisesa Southeast Sulawesi
PT Prima Bumi Sakti Daya Maluku

2006
PT Artika Optima Inti I Papua
PT Bina Mahawana Wisesa Southeast Sulawesi

Source: Forestry Ministry, Data Consult

Table - 13
New IUPHHK and extension

Companies Width (ha) Location

IUPHHK for natural forests
PT Nusa Niwe Indah * 73,500 North Maluku
PT Dharma Satya Nusantara * 35,000 East Kalimantan
PT Sulwood 21,080 South Sulawesi
PT Graha Sentosa Permai 44,970 East Kalimantan
PT Wana Inti Kahuripan Intiga * 92,475 Central Kalimantan
PT Intrado Jaya Intiga * 51,040 Central Kalimantan

IUPHHK plantation forests
PT Aceh Nusa Indra uri 111,000 NAD
PT Inhutani III Pelaihari 27,500 Kalimantan South

Note: *) Extension

Source: Forestry ministry

Table - 14
Width HPH and HTI operates by PT Inhutani I-V

State Companies Joint Venture Managed Alone
 (ha) (ha)

HPH
PT Inhutani I 387,669 822,017
PT Inhutani II 1,672,593 142,167
PT Inhutani III 822,375
PT Inhutani IV 271,212
PT Inhutani V 122,490
Total 3,276,339 964,184

HTI
PT Inhutani I 1,130,584 96,816
PT Inhutani II 116,946 94,800
PT Inhutani III 597,625 363,300
PT Inhutani IV 321,563 -
PT Inhutani V 481,450 56,547
Total 26,481,681 611,463

Source: PT Inhutani I-V

Table - 15
Forest areas under Perum Perhutani

 Production Protected Other
 forests forests forests Total
Unit (ha) (ha) (ha) (ha)

Unit I Central Java 573,242 73,478 877 647,597
Unit II East Java 812,950 315,505 233,053 1,361,508
Unit III West Java 453,556 283,179 333,611 1,070,346
 and Banten
Total 1,839,748 672,162 567,541 3,079,451

Source: Perum Perhutani

Table - 16
Losses recorded by Perhutani as a result of weak security,2000 -2004

Description Unit 2000 2001 2002

Tree stealing Thousand tree 257 2,675 1,539
 Rp million 569,757 613,924 248,619

Stealing of CUM 11,974 2,597 725
 woodworking Rp Million 2,326 2,489 592

Other tree stealing Thousand trees
 Rp Million 90 2,146 16.8

Forest bibrikan hectare 9,900 12,122 9,328
 Rp Million 4,635 2,896 4,034

Arbitrary felling Ha 60.7 1,204.0 390.7
 of tree Rp Million 7,289.8 8,616 1,404

Forest fires Ha 45.2 154,224 471,191
 Rp Million 1,201.0 3,970 8,338

Description Unit 2003 2004

Tree stealing Thousand tree 502 325
 Rp million 109k741 71,918

Stealing of CUM 1k700
 woodworking Rp Million 812

Other tree stealing Thousand trees
 Rp Million 4.50 10.60

Forest bibrikan hectare 2k117 1,023
 Rp Million 784 334

Arbitrary felling Ha 1,138.5 295
 of tree Rp Million 9,303 49

Forest fires Ha 13,732 7,531
 Rp Million 3,050 1,420

Source: Long term plan of Perum Perhutani

Table - 17
Production of teakwood and forest trees of Perum Perhutani

Description Units 2001 2002 2003 2004

Teakwood
Width Ha 82,690 88,671 54,091 26,046
Production CU.M 654,802 668,404 427,847 384,373

Forest trees
Width Ha 44,245 43,757 21,985 6,130
Production CU.M 800,601 816,487 549,649 219,940

Source: Long term plan of Perhutani

Table - 18
Plywood companies still active in 2005

No. Name of Company Status Location

 1 PT Andatu Lestari Plywood PMDN Lampung
 2 PT Antang Permai Plywood PMDN Central Kalimantan
 Industry
 3 PT Asia Forestama Raya PMDN Riau
 4 PT Austral Byna PMDN South Kalimantan
 5 PT Bade Makmur Orissa PMDN Irian Jaya
 6 PT Balikpapan Forest Industry PMA East Kalimantan
 7 PT Barito Pacific Timber PMDN West Kalimantan
 8 PT Barito Pacific Timber PMDN South Kalimantan
 9 PT Basirih Industrial PMDN South Kalimantan
 10 PT Central Carda PMA Central Kalimantan
 11 PT Dharma Wood Agung Ind. PMDN East Kalimantan
 12 PT Duta Rendra Mulia PMDN West Kalimantan
 13 PT Erna Juliawati PMDN West Kalimantan
 14 PT Harjon Timber Ltd. PMDN West Kalimantan
 15 PT Hendratna Plywood PMDN South Kalimantan
 16 PT Henrison Iriana PMDN Irian Jaya
 17 PT Idec Abadi Industries Plywood PMA East Kalimantan
 Indust.
 18 PT International Timber Corp. PMDN East Kalimantan
 Indonesia
 19 PT Intra Wood MFG PMDN East Kalimantan
 20 PT Katingan Timber Co. PMDN South Kalimantan
 21 PT Kayan River Indah Plywood PMDN East Kalimantan
 22 PT Kayu Lapis Ash Murni PMDN East Kalimantan
 23 PT Kayu Lapis Indonesia PMDN Central Java
 24 PT Ketapang Indah Plywood PMDN West Kalimantan
 Industri
 25 PT Korindo Abadi PMA Riau
 26 PT Korindo Aria Bima Sari PMA Central Kalimantan
 27 PT Kurnia Kapuas Plywood PMDN West Kalimantan
 Industries
 28 PT Kutai Timber Indonesia PMA East Java
 29 PT Mangole Timber Prodecers PMDN Maluku
 30 PT Melapi Timber Industri PMDN East Kalimantan
 31 PT Meranti Mustika PMDN Central Kalimantan
 32 PT Mulya Karya Jayaco PMDN North Sumatra
 33 PT Panca Eka Bina Plywood PMDN Riau
 Industry
 34 PT Panca Usaha Palopo Utama PMDN South Kalimantan
 Damai
 35 PT Putra Source Utama Timber PMDN Jambi
 36 PT Raja Garuda Mas PMDN North Sumatra
 37 PT Rimba Kayu Arthamas PMDN Irian Jaya
 38 PT Rimba Ramin PMDN West Kalimantan
 39 PT Sari Bumi Kusuma PMDN West Kalimantan
 40 PT Satya Raya Indah Wood PMDN West Java
 41 PT Segara Timber, Co. PMDN East Kalimantan
 42 PT Sola Gratia Plywood Industry PMDN Riau
 Co. Ltd.
 43 PT Suka Jaya Makmur PMDN West Kalimantan
 44 PT Sukses Sumatera Timber PMDN South Sumatera
 45 PT Sumalindo Lestari Jaya PMDN East Kalimantan
 46 PT Sumatera Timber Utama PMDN Jambi
 47 PT Source Mas Indah Plywood PMDN East Java
 48 PT Surya Dumai Industri PMDN Riau
 49 PT Surya Satria Timur, Co PMDN South Kalimantan
 50 PT Tanjung Raya Plywood PMDN South Kalimantan
 51 PT Tanjung Selatan Makmur Jaya PMA South Kalimantan
 52 PT Tirta Mahakam Plywood Timber PMA East Kalimantan
 Indust.
 53 PT Tjipta Rimba Jaya PMDN North Sumatra
 54 PT Tunggal Agatis Indah Wood PMDN Maluku
 Industries
 55 PT Warna Rimba Kencana PMDN East Kalimantan

 Total Production Capacity cu.m/year

 Production
No. Name of Company Status Capacity

 1 PT Andatu Lestari Plywood PMDN 83,000
 2 PT Antang Permai Plywood PMDN 39,450
 Industry
 3 PT Asia Forestama Raya PMDN 40,000
 4 PT Austral Byna PMDN 104,950
 5 PT Bade Makmur Orissa PMDN 100,000
 6 PT Balikpapan Forest Industry PMA 76,000
 7 PT Barito Pacific Timber PMDN 107,100
 8 PT Barito Pacific Timber PMDN 165,000
 9 PT Basirih Industrial PMDN 35,700
 10 PT Central Carda PMA 60,000
 11 PT Dharma Wood Agung Ind. PMDN 35,000
 12 PT Duta Rendra Mulia PMDN 208,628
 13 PT Erna Juliawati PMDN 100,000
 14 PT Harjon Timber Ltd. PMDN 54,200
 15 PT Hendratna Plywood PMDN 24,000
 16 PT Henrison Iriana PMDN 198,000
 17 PT Idec Abadi Industries Plywood PMA 47,000
 Indust.
 18 PT International Timber Corp. PMDN 157,150
 Indonesia
 19 PT Intra Wood MFG PMDN 134,663
 20 PT Katingan Timber Co. PMDN 62,662
 21 PT Kayan River Indah Plywood PMDN 50,000
 22 PT Kayu Lapis Ash Murni PMDN 118,393
 23 PT Kayu Lapis Indonesia PMDN 432,000
 24 PT Ketapang Indah Plywood PMDN 90,000
 Industri
 25 PT Korindo Abadi PMA 119,000
 26 PT Korindo Aria Bima Sari PMA 130,000
 27 PT Kurnia Kapuas Plywood PMDN 66,800
 Industries
 28 PT Kutai Timber Indonesia PMA 100,000
 29 PT Mangole Timber Prodecers PMDN 216,000
 30 PT Melapi Timber Industri PMDN 59,700
 31 PT Meranti Mustika PMDN 143,000
 32 PT Mulya Karya Jayaco PMDN 5,200
 33 PT Panca Eka Bina Plywood PMDN 120,000
 Industry
 34 PT Panca Usaha Palopo Utama PMDN 22,810
 Damai
 35 PT Putra Source Utama Timber PMDN 60,000
 36 PT Raja Garuda Mas PMDN 83,000
 37 PT Rimba Kayu Arthamas PMDN 100,000
 38 PT Rimba Ramin PMDN 57,000
 39 PT Sari Bumi Kusuma PMDN 40,000
 40 PT Satya Raya Indah Wood PMDN 71,428
 41 PT Segara Timber, Co. PMDN 57,500
 42 PT Sola Gratia Plywood Industry PMDN 70,000
 Co. Ltd.
 43 PT Suka Jaya Makmur PMDN 81,300
 44 PT Sukses Sumatera Timber PMDN 90,000
 45 PT Sumalindo Lestari Jaya PMDN 160,200
 46 PT Sumatera Timber Utama PMDN 104,000
 47 PT Source Mas Indah Plywood PMDN 100,000
 48 PT Surya Dumai Industri PMDN 140,000
 49 PT Surya Satria Timur, Co PMDN 64,000
 50 PT Tanjung Raya Plywood PMDN 148,660
 51 PT Tanjung Selatan Makmur Jaya PMA 105,000
 52 PT Tirta Mahakam Plywood Timber PMA 102,840
 Indust.
 53 PT Tjipta Rimba Jaya PMDN 150,000
 54 PT Tunggal Agatis Indah Wood PMDN 154,800
 Industries
 55 PT Warna Rimba Kencana PMDN 80,000

 Total Production Capacity cu.m/year 5,525,134

No. Name of Company Status Group

 1 PT Andatu Lestari Plywood PMDN
 2 PT Antang Permai Plywood PMDN
 Industry
 3 PT Asia Forestama Raya PMDN Asia Forestama Group
 4 PT Austral Byna PMDN
 5 PT Bade Makmur Orissa PMDN
 6 PT Balikpapan Forest Industry PMA
 7 PT Barito Pacific Timber PMDN BARITO PACIFIC
 8 PT Barito Pacific Timber PMDN BARITO PACIFIC
 9 PT Basirih Industrial PMDN
 10 PT Central Carda PMA KORINDO GROUP
 11 PT Dharma Wood Agung Ind. PMDN
 12 PT Duta Rendra Mulia PMDN
 13 PT Erna Juliawati PMDN
 14 PT Harjon Timber Ltd. PMDN ALAS KUSUMA GROUP
 15 PT Hendratna Plywood PMDN HENDRAT NA GROUP
 16 PT Henrison Iriana PMDN KLI GROUP
 17 PT Idec Abadi Industries Plywood PMA
 Indust.
 18 PT International Timber Corp. PMDN
 Indonesia
 19 PT Intra Wood MFG PMDN
 20 PT Katingan Timber Co. PMDN
 21 PT Kayan River Indah Plywood PMDN SUMBER MAS GROUP
 22 PT Kayu Lapis Ash Murni PMDN
 23 PT Kayu Lapis Indonesia PMDN KLI GROUP
 24 PT Ketapang Indah Plywood PMDN BUMI RAYA GROUP
 Industri
 25 PT Korindo Abadi PMA KORINDO GROUP
 26 PT Korindo Aria Bima Sari PMA KORINDO GROUP
 27 PT Kurnia Kapuas Plywood PMDN BUMI RAYA GROUP
 Industries
 28 PT Kutai Timber Indonesia PMA
 29 PT Mangole Timber Prodecers PMDN BARITO PACIFIC
 30 PT Melapi Timber Industri PMDN
 31 PT Meranti Mustika PMDN
 32 PT Mulya Karya Jayaco PMDN
 33 PT Panca Eka Bina Plywood PMDN
 Industry
 34 PT Panca Usaha Palopo Utama PMDN PALOPO GROUP
 Damai
 35 PT Putra Source Utama Timber PMDN PALOPO GROUP
 36 PT Raja Garuda Mas PMDN
 37 PT Rimba Kayu Arthamas PMDN
 38 PT Rimba Ramin PMDN
 39 PT Sari Bumi Kusuma PMDN ALAS KUSUMA GROUP
 40 PT Satya Raya Indah Wood PMDN SRI Group
 41 PT Segara Timber, Co. PMDN
 42 PT Sola Gratia Plywood Industry PMDN ASIA FORESTA MA GROUP
 Co. Ltd.
 43 PT Suka Jaya Makmur PMDN ALAS KUSUMA GROUP
 44 PT Sukses Sumatera Timber PMDN SRI Group
 45 PT Sumalindo Lestari Jaya PMDN
 46 PT Sumatera Timber Utama PMDN
 47 PT Source Mas Indah Plywood PMDN
 48 PT Surya Dumai Industri PMDN SURYA DAMAI GROUP
 49 PT Surya Satria Timur, Co PMDN
 50 PT Tanjung Raya Plywood PMDN TANJUNG RAYA GROUP
 51 PT Tanjung Selatan Makmur Jaya PMA TANJUNG RAYA GROUP
 52 PT Tirta Mahakam Plywood Timber PMA
 Indust.
 53 PT Tjipta Rimba Jaya PMDN
 54 PT Tunggal Agatis Indah Wood PMDN BARITO PACIFIC
 Industries
 55 PT Warna Rimba Kencana PMDN

 Total Production Capacity cu.m/year

Source: MOF, Data Consult

Table - 19
Plywood factories integrated with active HPH

No Name of Company Location

 1 PT Antang Permai Plywood Industry Central Kalimantan
 2 PT Austral Byna South Kalimantan
 3 PT Bade Makmur Orissa Irian Jaya
 4 PT Balikpapan Forest Industry East Kalimantan
 5 PT Barito Pacific Timber West Kalimantan
 6 PT Dharma Wood Agung Ind. East Kalimantan
 7 PT Erna Juliawati West Kalimantan
 8 PT International Timber Corp. Indonesia East Kalimantan
 9 PT Intra Wood MFG East Kalimantan
10 PT Kurnia Kapuas Plywood Industries West Kalimantan
11 PT Mangole Timber Prodecers Maluku
12 PT Meranti Mustika Central Kalimantan
13 PT Mulya Karya Jayaco North Sumatra
14 PT Panca Usaha Palopo Utama Damai South Kalimantan
15 PT Putra Source Utama Timber Jambi
16 PT Raja Garuda Mas North Sumatra
17 PT Rimba Kayu Arthamas Irian Jaya
18 PT Satya Raya Indah Wood West Java
19 PT Segara Timber, Co. East Kalimantan
20 PT Suka Jaya Makmur West Kalimantan
21 PT Sukses Sumatera Timber South Sumatra
22 PT Sumalindo Lestari Jaya East Kalimantan
23 PT Sumatera Timber Utama Jambi
24 PT Surya Satria Timur, Co South Kalimantan
25 PT Tunggal Agatis Indah Wood Industries Maluku
26 PT Warna Rimba Kencana East Kalimantan

No Name of Company Production Capacity

 1 PT Antang Permai Plywood Industry 39,450
 2 PT Austral Byna 104,950
 3 PT Bade Makmur Orissa 100,000
 4 PT Balikpapan Forest Industry 76,000
 5 PT Barito Pacific Timber 107,100
 6 PT Dharma Wood Agung Ind. 35,000
 7 PT Erna Juliawati 100,000
 8 PT International Timber Corp. Indonesia 157,150
 9 PT Intra Wood MFG 134,663
10 PT Kurnia Kapuas Plywood Industries 66,800
11 PT Mangole Timber Prodecers 216,000
12 PT Meranti Mustika 143,000
13 PT Mulya Karya Jayaco 5,200
14 PT Panca Usaha Palopo Utama Damai 22,810
15 PT Putra Source Utama Timber 60,000
16 PT Raja Garuda Mas 83,000
17 PT Rimba Kayu Arthamas 100,000
18 PT Satya Raya Indah Wood 71,428
19 PT Segara Timber, Co. 57,500
20 PT Suka Jaya Makmur 81,300
21 PT Sukses Sumatera Timber 90,000
22 PT Sumalindo Lestari Jaya 160,200
23 PT Sumatera Timber Utama 104,000
24 PT Surya Satria Timur, Co 64,000
25 PT Tunggal Agatis Indah Wood Industries 154,800
26 PT Warna Rimba Kencana 80,000

No Name of Company Group

 1 PT Antang Permai Plywood Industry
 2 PT Austral Byna
 3 PT Bade Makmur Orissa
 4 PT Balikpapan Forest Industry
 5 PT Barito Pacific Timber BARITO PACIFIC
 6 PT Dharma Wood Agung Ind.
 7 PT Erna Juliawati
 8 PT International Timber Corp. Indonesia
 9 PT Intra Wood MFG
10 PT Kurnia Kapuas Plywood Industries BUMI RAYA GROUP
11 PT Mangole Timber Prodecers BARITO PACIFIC
12 PT Meranti Mustika
13 PT Mulya Karya Jayaco
14 PT Panca Usaha Palopo Utama Damai Palopo group
15 PT Putra Source Utama Timber Palopo group
16 PT Raja Garuda Mas
17 PT Rimba Kayu Arthamas
18 PT Satya Raya Indah Wood Sri group
19 PT Segara Timber, Co.
20 PT Suka Jaya Makmur Alas kusuma group
21 PT Sukses Sumatera Timber Sri group
22 PT Sumalindo Lestari Jaya
23 PT Sumatera Timber Utama
24 PT Surya Satria Timur, Co
25 PT Tunggal Agatis Indah Wood Industries Barito pacific
26 PT Warna Rimba Kencana

Source: MOF, Data Consult/ICN

Table - 20
Production capacity of plywood companies

 Production
 Capacity
Name of Group/Company Location (cu.m./year)

ALAS KUSUMA GROUP
PT Suka Jaya Makmur West Kalimantan 81,300
PT Harjon Timber Ltd. West Kalimantan 54,200
PT Sari Bumi Kusuma West Kalimantan 40,000
 Sub total 175,500

ASIA FORESTAMA GROUP
PT Asia Forestama Raya Riau 40,000
PT Sola Gratia Plywood Industry
 Co. Ltd. Riau 70,000
 Sub total 110,000

BARITO PACIFIC
PT Barito Pacific Timber West Kalimantan 107,100
PT Mangole Timber Prodecers Maluku 216,000
PT Tunggal Agatis Indah Wood
 Industries Maluku 154,800
PT Barito Pacific Timber South Kalimantan 165,000
 Sub total 642,900

BUMI RAYA GROUP
PT Kurnia Kapuas Plywood Industries West Kalimantan 66,800
PT Ketapang Indah Plywood Industri West Kalimantan 90,000
 Subtotal 156,800

HENDRATNA GROUP
PT Hendratna Plywood South Kalimantan 24,000
 Subtotal 24,000

KAYU LAPIS INDONESIA GROUP
PT Henrison Iriana Irian Jaya 198,000
PT Kayu Lapis Indonesia Central Java 432,000
 Subtotal 630,000

KORINDO GROUP
PT Central Carda Central Kalimantan 60,000
PT Korindo Abadi Riau 119,000
PT Korindo Aria Bima Sari Central Kalimantan 130,000
 Subtotal 309,000

PALOPO GROUP
PT Panca Usaha Palopo Utama Damai South Kalimantan 22,810
PT Putra Source Utama Timber Jambi 60,000
 Subtotal 82,810

SRI Group
PT Satya Raya Indah Wood West Java 71,428
PT Sukses Sumatera Timber South Sumatera 90,000
 Subtotal 161,428

SUMBER MAS GROUP
PT Kayan River Indah Plywood East Kalimantan 50,000
 Sub total 50,000

SURYA DUMAI GROUP
PT Surya Dumai Industri Riau 140,000
 Subtotal 140,000

TANJUNG RAYA GROUP
PT Tanjung Raya Plywood South Kalimantan 148,660
PT Tanjung Selatan Makmur Jaya South Kalimantan 105,000
 Sub total 253,660

Source: MOF, Data Consult

Table - 21
Production of wood panel (Plywood, Block-board, Veneer,
Particle board), 2000 - 2005

(cu. M)

 Block Particle
Year Plywood Board Veneer Board Total

2000 4,442,735 321,125 668,842 200,034 5,632,736
2001 2,101,485 388,004 94,228 296,877 2,880,594
2002 1,694,405 121,560 4,361,044 6,731 6,183,740
2003 *) 6,110,556 436,418 289,191 83,642 6,919,807
2004 *) 4,514,392 277,396 155,374 244,070 5,191,232
2005 **) 4,533,749 403.160 1,012,205 124.768 6,073,882

Note:

*) revised figures

**) provisional figure

Source: Directorate General of Forestry Production Data Consult/ICN

Table - 22
Production of plywood by provinces

(c.u.m)

No. Provinces 2003 2004 2005 *)

 1 North Sumatra 244,857 74,171 153,345
 2 West Sumatra 56,053 13,925 548
 3 Riau 303,665 274,744 176,826
 4 Jambi 422,219 425,264 364,748
 5 South Sumatra 39,693 37,103 36,475
 6 Lampung 156,180 31,080 82,717
 7 Banten 62,167 58,716 0
 8 Jakarta 0 273 0
 9 Central Java 264,115 207,727 201,924
 10 East Java 114,155 211,559 0
 11 West Kalimantan 794,593 644,634 558,133
 12 Central Kalimantan 331,110 232,307 231,421
 13 East Kalimantan 1,600,745 933,447 1,357,314
 14 South Kalimantan 933,370 858,153 927,960
 15 North Sulawesi 0 0 5,406
 16 South Sulawesi 215,394 135,587 167,460
 17 Maluku 112,036 54,656 0
 18 North Maluku 158,917 102,605 101,684
 19 Papua 194,144 133,667 167,787
 20 West Irian Jaya 107,144 84,774 0
 21 Total 6,110,557 4,514,392 4,533,748

Note: *) provisional figure

Source: Forestry Production Directorate General, Data Consult/ICN

Table - 23
Sawn timber production, 2000-2005

 Sawn Wood
 Timber Working Moulding Dowels
Year (cu.m) (cu.m) (cu.m) (cu.m)

2000 2,789,543 299,412 160,336 2,640
2001 674,868 278,088 139,134 542
2002 623,495 71,681 161,833 0
2003 762,309 161,814 321,653 0
2004 432,967 387,503 238,743 0
2005 *) 1,471,614 131,297 272,668 3,680

Note: *) provisional figure

Source: Forestry Production Directorate General, Data Consult/ICN

Table - 24
Production of sawn timber in 5 past 5 years

 2001 2002 ** 2003 2004 2005
Provinces (cu.m) (cu.m) (cu.m) (cu.m) (cu.m)

Aceh (NAD) 29,015 0 0 0 21,288
North Sumatra 23,187 37,432 7,556 19,915 51,368
West Sumatra 5,098 0 16,450 19,631 743
Riau 2,420 0 102,010 19,222 25,212
Riau Islands 0 0 0
Jambi 141,543 0 80,412 48,704 101,225
South Sumatra 171,001 50,490 9,402 18,802 3,126
Bangka Belitung 0 0 0
Bengkulu 0 0 0 16,172 23,152
Lampung 0 0 8,025 2,658 178,006
Jakarta 0 0 295 24,102 0
West Java 0 0 0 0 0
Banten 0 0 0
Central Java 0 4,707 15,340 44,781 190,979
Yogyakarta 0 0 0 0 0
East Java 0 215,649 72,596 20,193 5,232
Bali 276 222 0 0 0
West Nusatenggara 8,986 3,964 10,612 5,758 0
East Nusatenggara 3,137 0 0 0 18,171
West Kalimantan 36,046 0 59,139 27,333 183,833
Central Kalimantan 54,210 3,898 36,804 31,708 91,188
East Kalimantan 129,298 206,097 198,279 20,193 276,668
South Kalimantan 37,492 55,607 38,276 43,730 167,270
North Sulawesi 0 279 0 995 0
Gorontalo 0 5,121 0 6,156 7,166
Central Sulawesi 0 21,877 2,410 7,643 10,924
Southeast Sulawesi 5,797 10 0 18,640 44,994
South Sulawesi 9,451 12,457 10,353 18,942 4,907
West Sulawesi 0 0 19,706
Maluku 888 0 23,394 3,078 0
North Maluku 47,204 1,579 17,429
West Irian Jaya 8,878 11,061 0
Papua 17,024 5,683 15,169 2,425 29,027
Total 674,868 623,495 762,601 433,419 1,471,614

Source: Forestry Production Directorate General, Data Consult/ICN

Table - 25
Exports of processed timber

(tons)
(US$ '000)

 Sawn
Year timber Plywood Chipwood Pulp

 (Ton/US$ 000) (Ton/US$ 000) (Ton/US$ 000) (Ton/US$ 000)

2001 194,246 3,898,332 320 1,780,602
 90,841 1,837,915 177 564,028
2002 358,710 3,584,237 288 2,245,180
 125,462 1,748,310 142 706,929
2003 204,053 3,306,448 264 0
 86,744 1,662,911 172 791,215
2004 66,567 2,603,043 668 1,676,962
 27,427 1,576,874 370 588,744
2005 10,650 2,168,422 139 2,552,966
 3,680 1,374,670 8 932,708

 Hard/Soft Particle
Year Veneer Board board

 (Ton/US$ 000) (Ton/US$ 000) (Ton/US$ 000)

2001 5,344 200,619 103,293
 2,049 42,243 19,533
2002 3,316 198,675 111,335
 1,652 44,142 24,118
2003 5,403 170,862 126,676
 2,944 34,552 25,837
2004 55,058 200,694 48,133
 33,099 47,223 11,630
2005 3,982 234,789 30,177
 9,317 55,093 5,376

Source: BPS, Forestry Ministry, Data Consult/ICN

Table - 26
Log requirement of timber processing industries

(cu. M)

 Sawn Timber
 and
Year Wood panel woodworking Pulp Total

2000 10,241,338 5,245,050 19,357,326 34,843,714
2001 5,237,444 1,762,310 22,088,465 29,088,219
2002 11,243,164 1,382,273 23,523,246 36,148,682
2003 12,581,467 2,009,316 24,589,864 39,180,647
2004 9,438,604 1,708,408 24,657,891 35,804,903
2005 11,043,422 3,031,063 25,894,980 39,969,465

Source: Data Consult/ICN

Table - 27
Log requirement and supply for timber processing industry

(cu.m)

 Supply from
Year Requirement official sources Deficit

2000 34,843,714 13,798,240 21,045,474
2001 29,088,219 10,051,480 19,036,739
2002 36,148,682 8,659,968 27,488,714
2003 39,180,647 11,423,501 27,757,146
2004 35,804,903 13,548,938 22,255,965
2005 39,969,465 24,192,173 15,777,292

Source: Data Consult/ICN
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Title Annotation:INDUSTRY PROFILE
Publication:Indonesian Commercial Newsletter
Article Type:Industry overview
Geographic Code:9INDO
Date:Aug 1, 2006
Words:14121
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