Indonesia's plywood industry operating below capacity.
The country's plywood industry is operating only at 70% of its
installed capacity as a result of shortage in supply of log raw
material., producers said. Deputy chairman of the association of wood
panel companies (Apkindo) Abbas Adhar blamed the government policy of
reducing logging quota for the poor performance of the plywood industry.
The government, concerned with preserving the country's tropical
forests, reduced logging quota to 5.7 million cubic meters this year
from 6.89 million cubic meters in 2003. Adhar said some plywood
producers have to reduce their production capacity by 30%-50% because of
the decline in log supplying capacity from production forests. He said
plywood industry is the hardest hit by the policy as the industry
depends much on natural forests for logs. Other forest based industries
like pulp and paper industry could rely on plantation forests.