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Table of Contents
III. Baseline Results: 1994/1995
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C. Raw material shortfall of timber groups
Table 3.7: Ranking of groups by net raw material supply, 1994/1995
Group
Capacity (m3)
Balance (m3)
Percentage of capacity met by groups own HPHs
_________________________________________________________________
Poleko
201,000
-187,638
7
Hartati
304,000
-275,901
9
Kodeco
1,036,000
-907,984
12
Siak Raya
316,000
-259,101
18
Surya Satria Timur
162,000
-129,415
20
Rimba Karya Indah
440,000
-347,383
21
Sola Gratia
407,000
-315,153
23
Tanjung Johor
307,800
-237,353
23
Rimba Ramin
216,000
-166,335
23
Sari Hutan Permai
60,000
-46,164
23
Loka Rahayu
278,800
-214,378
23
Salim
1,227,600
-931,625
24
Uni Seraya
873,400
-650,020
26
Hendratna
352,800
-255,717
28
Bumi Raya Utama
1,266,200
-901,094
29
Gulat
88,000
-60,935
31
Raja Garuda Mas
1,574,800
-1,074,035
32
Hutrindo
1,264,800
-849,861
33
KLI
2,481,000
-1,629,770
34
Alas Kusuma
2,148,880
-1,351823
37
Jatirin
80,000
-49,751
38
Kahayan
306,000
-188,024
39
Army
829,900
-506,536
39
Kayu Mas
742,000
-438,167
41
Mutiara
520,000
-303,933
42
Surya Dumai
759,000
-433,543
43
Giat
144,000
-80,529
44
Tanjung Raya
1,161,800
-639,320
45
Roda Mas
393,000
-209,580
47
Kayon
96,000
-51,176
47
Barito Pacific
3,402,800
-1,776,898
48
Dayak Besar
339,200
-175,344
48
Djajanti
2,030,800
-1,049,268
48
Gunung Raya Utama
710,800
-352,506
50
Daya Sakti
504,000
-248,445
51
Dwima Manunggal
286,400
-139,736
51
Sinar Mas
177,000
-86,031
51
Pakarti Yoga
517,800
-241,437
53
Korindo
1,128,200
-508,519
55
Sumber Kayon
71,400
-29,586
59
Benua Indah
257,200
-103,252
60
Batasan
128,000
-50,673
60
Satya Djaya Raya
645,000
-243,123
62
Bob Hasan Group
1,014,200
-322,235
68
Andatu
143,400
-44,897
69
Katingan Timber
173,200
-50,871
71
Antang
342,000
-96,365
72
Yusmin Trading
276,000
-72,544
74
Iradat Puri
174,000
-665
100
Sumalindo
202,800
32,236
116
Medang Kerang
24,000
4,762
120
Hanurata
136,000
29,030
121
Subago
72,000
32,928
146
Sulwood
120,000
68,829
157
Mujur
185,600
125,313
168
Police
60,000
47,896
180
Wijaya Kusuma
38,400
34,554
190
Brata Jaya Utama
40,000
42,008
205
Inhutani I
-
718,258
-
Inhutani II
-
154,379
-
Inhutani III
-
259,979
-
Kaboli
-
74,408
-
Segara Timber
-
34,994
-
Sentosa Jaya
-
45,442
-
Not in a group
8,212,200
-5,543,866
32
_________________________________________________________________
Total
41,450,180
-23,123,493
44
At mid-decade, assuming Indonesia's HPH-linked plymills and sawmills
were running at full capacity, and assuming that the entire output of
the country's HPHs were being diverted toward those mills, only a
fraction of the roundwood consumed by these companies' mills was
supplied from their own HPHs. Even though the distribution of timber
concessions was at a high point, and the issuing of mill licenses had
not yet peaked, a third of the country's timber conglomerates were
already operating with less than half of their timber supply coming
from their own concessions.
The largest timber deficit was run by the Poleko group, the family
company of senior Golkar politician A.A. Baramuli (CISI 1991:
542-543). Only 7 percent of Poleko's licensed output was met by its
own timber concessions. Baramuli now heads the "Black" Golkar faction
which is trying to purge the leaders of the more reformist "White"
faction from the party.
D. National raw material shortfall
Table 3.8 Implications for national supply of timber, 1994/1995
Province
Total
Total area
Total estimated
Total prodn
Total number of
Total licensed
Estimated prod'n of
Total number
Total licensed
Estimated prod'n of
Balance
no. of HPHs
of HPHs (ha)
production from HPHs (m3)
from land clearing (m3)
HPH-linked mills
capacity of HPH-linked mills (m3)
HPH-linked mills (m3)
non-HPH-linked mills
capacity of non- HPH linked mills (m3)
non-HPH-linked mills (m3)
Aceh
14
1,336,500
561,571
210,816
12
1,422,600
1,066,950
131
327,000
196,200
-490,763
North Sumatra
17
1,285,000
1,630,706
138,889
15
2,150,600
1,612,950
274
1,287,000
772,200
-615,555
West
Sumatra
7
587,000
188,724
19,668
8
753,800
565,350
39
171,000
102,600
-459,558
Riau
66
6,080,200
1,051,539
950,588
48
4,817,600
3,613,200
129
784,000
470,400
-2,081,473
Jambi
29
2,686,300
544,415
823,191
22
2,136,000
1,602,000
103
1,580,000
948,000
-1,182,394
Bengkulu
6
491,000
138,543
97,421
2
120,000
90,000
63
400,000
240,000
-94,036
South Sumatra
21
2,129,000
476,584
259,122
19
1,589,600
1,192,200
471
2,409,000
1,445,400
-1,901,894
Lampung
2
138,000
-
22,995
3
239,400
179,550
74
277,000
166,200
-322,755
West Java
-
-
-
-
4
883,000
662,250
138
1,231,000
738,600
-1,400,850
Jakarta
-
-
-
-
-
-
-
49
548,000
328,800
-328,800
Central Java
-
-
-
-
6
1,932,400
1,449,300
57
648,000
388,800
-1,838,100
East Java
-
-
-
-
4
964,000
723,000
70
1,815,000
1,089,000
-1,812,000
West Nusa Tenggara
2
90,500
89,611
16,842
3
106,000
79,500
28
34,000
20,400
6,553
East
Timor
-
-
-
374
-
-
-
10
90,000
54,000
-53,626
West Kalimantan
61
5,991,800
1,412,586
163,585
48
4,591,400
3,443,550
26
1,757,000
1,054,200
-2,921,579
Central Kalimantan
130
12,592,370
4,515,512
681,601
50
3,331,800
2,498,850
121
1,030,000
618,000
2,080,263
South Kalimantan
16
1,551,000
403,692
38,294
39
3,891,400
2,918,550
433
1,977,000
1,186,200
-3,662,764
East Kalimantan
109
12,745,400
3,779,723
913,029
51
6,158,180
4,618,635
84
1,666,000
999,600
-925,483
North Sulawesi
5
505,000
144,374
565
2
162,000
121,500
5
127,000
76,200
-52,761
Central Sulawesi
15
1,432,500
331,377
149,283
10
562,800
422,100
32
207,000
124,200
-65,640
South Sulawesi
10
690,000
589,557
65,636
6
419,200
314,400
54
301,000
180,600
160,193
Southeast Sulawesi
4
615,000
146,797
32,134
-
-
-
41
136,000
81,600
97,331
Maluku
37
3,376,800
893,496
43,160
19
2,216,000
1,662,000
69
472,000
283,200
-1,008,544
West Irian
33
8,211,000
1,427,881
81,493
14
3,002,400
2,251,800
4
18,000
10,800
-753,226
Total Indonesia
585
62,534,370
18,326,687
4,708,686
385
41,450,180
31,087,635
2,505
19,292,000
11,575,200
-19,627,462
Notes regarding the foregoing table:
Total number of HPHs, total area of HPHs, and total estimated
production of HPHs are a major subject of this study, and the means of
calculating these figures are discussed at length in the methodology
section of this report. The figure for total area of HPHs in this
table differs from that given in Table 2.2 due to the fact that the
figure in this table was independently derived, while the figure in
Table 2.2 is a Department of Forestry figure.
Figures for total production from land clearing come from Departemen
Kehutanan, Direktorat Jenderal Pengusahaan Hutan, Direktorat Bina
Pengusahaan Hutan, 1995.
Figures for total number of HPH-linked mills and total licensed
capacity of HPH-linked mills are a major subject of this study, and
the means of calculating these figures are discussed at length in the
methodology section of this report.
Estimated production of HPH-linked mills is derived by taking the
licensed capacity of HPH-linked mills and multiplying that figure by
0.75. This multiplier, in turn, is derived by averaging two other
numbers, ITFMP's in-house rule of thumb for the minimum capacity at
which plymills here can operate while still maintaining profitability
(90 percent, or 0.9), and the minimum capacity at which sawmills can
operate and still maintain profitability (60 percent, or 0.6).
Total number of non-HPH-linked mills and total licensed capacity of
non-HPH-linked mills comes from "Industri Pengolahan Kayu Hulu Tidak
Terkait HPH," on pages 131-178 of Departemen Kehutanan, Direktorat
Jenderal Pengusahaan Hutan, Direktorat Pemanfaatan dan Peredaran Hasil
Hutan 1997, or the data underpinning ITFMP 1999, whichever was higher.
Total estimated production of non-HPH-linked mills is derived by
taking the licensed capacity of non-HPH-linked mills and multiplying
that figure by 0.6, or 60 percent, the minimum capacity at which ITFMP
believes a sawmill can operate and still maintain profitability.
Nearly all of the non-HPH linked mills are sawmills, not plywood
mills. Hence, no plywood multiplier is used.
Balance is obtained by taking the sum of total estimated production of
HPHs and total production from land clearing and subtracting from that
number the sum of the total estimated production of HPH-linked mills
and total estimated production of non-HPH-linked mills.
Table 3.8 presents an even more nuanced view of the supply and demand
situation in Indonesia's plymill and sawmill industries in 1995,
taking into consideration all land clearing. Furthermore, the table
assumes that all the wood obtained through land clearing is used by
plymills and sawmills, and not by the fast-growing pulpmill sector. In
fact, this is an assumption that is quite generous to the plywood and
sawmill sector, given that much of the forests cleared through IPKs do
in fact go to the pulp and paper sector, which has a strong price
preference for low-cost mixed tropical hardwoods obtained through
forest clearing. Data provided to ITFMP from a province it considers
to be representative for the country one neither too close to, nor too
far from, the majority of the country's pulp mills shows that over the
three year period between 1996-1999, only 53 percent of the wood from
that state's IPKs went to the plywood sector, while 47 percent went to
the pulp and paper sector. But again, the reason that this study uses
an assumption that is so generous to the sawn timber and plywood
sector namely, that wood from land clearing is used by plymills and
sawmills, and not by pulpmills - is so that every effort is made to
extend the benefit of the doubt to the country's plywood mills and
sawmills in evaluating their raw material status.
Second, the demand side of the equation is made more realistic by
introducing licensed but non-HPH linked plymills and sawmills:
Indonesia has a large number of mills licensed by the Department of
Industry and Trade but not connected in any formal way to HPHs.
Third, this report now relaxes the assumption that mills are operating
at full licensed capacity, and instead assumes that they are operating
at the minimum possible level at which they can remain profitable.
This report assumes that the minimum level at which HPH-linked
plymills and sawmills can remain profitable is 75 percent of licensed
capacity; non-HPH linked plymills and sawmills, 60 percent. Another
ITFMP study takes what is probably a more realistic position, namely,
that plymills and sawmills operate at 80 percent of licensed capacity
(ITFMP 1999). However, this report, in order to extend every possible
benefit of the doubt to the owners of HPH-liked and non-HPH-linked
plymills and sawmills when evaluating their consumption of legal vs.
illegal timber, assumes that these mills operate at slightly lower
levels than they probably do.
As a result of this new set of assumptions, we are left with a
realistic estimate of the bare minimum amount of illegal logging that
was necessary at mid-decade to keep the country's plymill and sawmill
sector alive. To summarize:
1. By the end of 1994, 25 percent of Indonesia's legal log supply was
coming from clear-cutting.
2. If we make the further simplifying assumption that all legally
harvested timber in the country (23 million m3) was used solely to
feed HPH-connected plymills and sawmills, the country's legal
supply would still fall short, even if the mills were running at
the minimum possible capacity (31 million m3). Using the same
simplifying assumption, the entire non-HPH connected saw and
plymill sector (which consumes a minimum of 11 million m3 of
roundwood) was left dependent upon illegal logging for its wood
supply.
3. The bare minimum possible log consumption of Indonesia's plymill
and sawmill sector vastly exceeds the country's legal log supply.
The shortfall is made up by illegal logging. The minimum amount of
illegal logging possible in Indonesia was 19 million cubic meters,
or nearly the size of the officially-sanctioned and recognized
timber production of the time.
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September 7, 1999
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