Day 2 Newsletter, 25th October 2013
The Paper Mart team recently interviewed Mr. Misbahul Huda, Chairman, Indonesian Pulp and Paper Association (APKI) to get an idea of the current trends in the Indonesian pulp and paper industry. Given below are a few excerpts from this fact-studded interview.
Paper Mart Team: Tell us about the history and achievements of APKI.
Misbahul Huda: APKI was established on April 5, 1969, and in December 2011 was reformed with a new structure and personnel. It has 61 members: 50 of them are from paper industry, 3 from pulp industry, 4 from integrated industry and the rest are non-active members. Restructuration is done with the aim to develop and achieve sustainable pulp and paper industry in Indonesia. It sets its 2012-to-2016 targets at creating good corporate governance, synergy, collaboration and coordination between all stakeholders by serving as meditation to solve problems and conflicts, creating comparative excellence and global competitive edge in the Indonesian pulp and paper industry. It also serves as a link between industry players, government and consumers. APKI facilitates the various challenges faced by our members either as a result of legislation that was not conducive or due to NGO pressure that leads to a black campaign by providing accurate information. In the ASEAN region, we will also take the lead in joint programmes.
PMT: Do you think local production of pulp and paper machinery could be advantageous for the Indonesian pulp and paper industry as a whole?
MH: Yes of course. The local production of pulp and paper machinery certainly would be able to reduce production cost and provide a lot of advantages in this industry, as long as the machine has good precision, is powerful, and is available at a competitive price. Some industries are able to produce the supporting machine by themselves, such as ball breaker, floatator and cleaner.
PMT: What steps is your government taking to further boost pulp and paper exports?
MH: The concept of a green industry in pulp and paper industry can improve the competitiveness of local products. Manufacturers in pulp and paper industry are expected to improve the concept of green and maximise the role of research and development. The pulp and paper industry in Indonesia can apply the concept of green industry to improve its export performance. However, Indonesia continues to face problems with NGOs that say that Indonesian paper is taken from forests that are not environment friendly, which is not true. Paper is produced from plantation forest and has certified the legality of timber. Indonesia has also developed a range of mandatory national standards, such as Sustainable Forest Management (SFM) and Timber Legality Assurance System (TLAS-SVLK) as well as voluntary certification such as LEI and BSN (SNI Ecolabel). EU has recognised FLEGT-VPA and signed it on 30 September 2013.
PMT: What are the main factors in the growth of the Indonesian pulp and paper industry?
MH: For your record, Indonesia is the 9th and 7th world’s largest pulp and paper industry respectively in 2012. Indonesia is one of the most populous nations in the world, and that’s a big factor. Besides, Indonesia’s strategic geographic location has contributed a lot towards the growth of its pulp and paper industry.
PMT: The centre of gravity and competition in pulp and paper industry has shifted to Asia. What have you to say for this new development?
MH: Asia will be the centre of economic, cultural and population growth. The current world population has reached over 7 billion and will be 9 billion by 2050, and more than 60 per cent of the population will be concentrated in Asia. Demand for paper, such as tissue paper, security paper and packaging paper, will keep increasing. Therefore, the growth of the pulp and paper industry in Indonesia will remain elevated.
PMT: Is the Indonesian pulp and paper industry sharing global concerns for climate change and deforestation? What steps has it taken in the recent past to reduce its carbon footprint?
MH: The government of Indonesia is very concerned with climate change and deforestation. Indonesia also continues its efforts and actions towards the implementation of the commitments to the United Nations Framework Convention on Climate Change (UNFCCC). Indonesia has taken a number of significant steps in mainstreaming climate change issues with other national development priorities, such as the issuance of the National Action Plan on Climate Change by ministry of environment, which describes appropriate actions to reduce GHG emissions and adaption activities in Indonesia. The government of Indonesia has also issued Presidential Regulation No. 61/2011 regarding National Action Plan on GHG Emission Reduction to give the targets for reducing emissions in forestry and peat land agriculture, energy and transportation and Presidential Regulation No. 71/2011 regarding National GHG Inventory System to provide periodic information on Indonesia’s GHG emission status including reductions in GHG emissions and associated activities. Indonesia’s ministry of forestry has a programme for overcoming deforestation, i.e., REDD+, and there are many demonstration projects in various regions of Indonesia. This means that Indonesia takes the lead in ASEAN on REDD+ programme. There is also another programme against deforestation, such as the one-billion-tree-planting programme to absorb CO2.
PMT: Can the pulp and paper industries in Indonesia and India work together for mutual benefit? Explain.
MH: Of course! India has advanced technology, and Indonesia has a large potential for production for pulp and paper industry, as the cycle of harvesting tree – for pulp production – in Indonesia is much faster than in other countries…and it is supported by competent human resources. Therefore, there will be huge benefits for both countries if they work together.