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The Ministry of Forestry (MoF) is reviewing the provision of incentives for the domestic wood processing industry in order to boost its competitiveness against imported products.
Industry must start thinking how they can boost their competitiveness against similar products from abroad, such as China, said Director General of Forestry Production Development, Hadi S Pasaribu, in Jakarta, Monday (10/11).
The problem, said Hadi, is that Indonesia's export-oriented wood processing industries are now in a bad market, so they have to 'swerve' to work on local markets with lower purchasing power.
During this time, the wood processing industry has intensively worked on the new domestic market of furniture, while wood panels and plywood more export-oriented.
For that, according to him, the production efficiency with revitalization of machinery to make production cheaper and the smaller raw material remaining can be done.
We can think of the possibility of helping through incentive schemes in the form of reduction of import duty (BM) and assistance seeking capital, he said.
It's the only way because it is no longer possible to raise imported products BM. ASEAN free market will start in 2011, so it is difficult to raise the BM.
Meanwhile, Managing Director of PT Albizzia Sinar Lestari Indah (ASLI), F Abdullah, said the local market demand is declining. The condition is exacerbated by the increase in production costs derived from raw materials of wood and glue because of the weakening of the rupiah against the US dollar.
This makes production for the local market difficult to market because the price is more expensive, while the purchasing power of local consumers is getting weaker.
The combination of various problems that make plywood entrepreneurs have to reduce the selling price of their products in the local market. It's burdensome to the company. If you can survive it is good, he said.
According to Chairman of the Forestry Industry Revitalization Board (BRIK), Soewarni, some time ago, exports for this year are still running to fulfill contracts that have been signed earlier.However, he said, export demand for next year is still a big question because the market for traditional export destinations in the United States, Europe and Japan is also weakening. (kpl / meg)