PULP AND PAPER INDUSTRY

PRELIMINARY

Indonesia is an agriculture country. It has plenty of natural resources. It also stretches in the wide range of islands that contain many tribes, races, culture, and variety of plants. People live from utilizing plants and other natural resources. Besides, it has been forest that plays important role in the country as land for living.

1In the period of the year 1960 Indonesia was still being a country standing behind in the development (least developing country) with Gross Domestic Product (GDP) per capita that belongs to lower income country. Indonesia may then be categorized as the biggest of least developing country whose manufacture stood behind the other countries. Manufacture sector output was less than other Asia countries like Philippine and Hong Kong. Oil boom that occurred in the period of 1973 – 1981 remarked by industry development even it was not efficient yet. The impact of oil boom against Indonesia economic was arising speed economic growth level and it stimulated the increasing demand of manufacture goods.

Industry era of Indonesia was beginning in the year 1966 and in the decade of 1980 Indonesia emerged as being important industrial power among the less developing countries. Economic growth had drastically increased in the period of 1968 – 1981 with the average growth rate was 7% yearly. This transformation process was plotted by increasing revenue per capita from USD 75 in the year 1967 shifted towards USD 1,023 in the year 1997 or equal to purchasing power parity of USD 3,690.

2The composition of Product Domestic Brute (PDB) sectors in the period of 1960 – 1998 was covering 1) agriculture, forest and fish, 2) mining, 3) manufacture, 4) electric, gas and water, 5) building, 6) trade, 7) transportation and communication, 8) finance, and 9) service. This paper will try to describe pulp and paper industry that relates to the limitation of organic natural resources.

PULP AND PAPER INDUSTRY

Indonesia is one of the tropical rain forest resources. Forest is such important natural source to keep water resources in the environment balance amount. Forest also functions to stabilize the climate. Human beings are luck to have enough forest. Forest will protect them from attacking the flood, bad climate, food shortage, water shortage and wild animal anger. There are many benefit of forest and it will be quite difficult to count one by one of its benefit. In short, forest is one of the most valuable assets that need to maintain forever life.

Figuring out the high importance of the forest it is necessary to maintain forest properly and adequately. We must keep forest away from destructions either done by human being or other disturbers. Excessive exploitation of the forest will threat and endanger nature of life. However, economically it is worthless to let the forest be and not to utilize for the sake of human being welfare. That is why there has been existed the industry of utilizing forest resources.

Pulp and paper industry was born of responding human need of paper. In the daily life, human being utilizes and consumes paper product for their daily supporting activities. In the work life and beyond human being always need paper as well as their other stuff of supporting facilities. For the industry itself there has been more paper needed to support their activities. Media industry needs paper to print newspaper and magazines. Food manufacture needs paper to inner and outer packages. Other industries need paper to facilitate their administration and much other supporting stuff. This opportunity of producing paper stimulates industry to operate the pulp and paper manufacture.

In the market there have been some listing companies of pulp and paper that involve in the stock market trading. 3There are Fajar Surya Wisesa Tbk, Indah Kiat Pulp & Paper Tbk, Surabaya Agung Industry P. Tbk, Suparma Tbk, and Pabrik Kertas Tjiwi Kimia Tbk. Some listing companies in the stock market prove and show us how important pulp and paper industry existence. They need the input material to transform into output of finished goods. We are familiar that one of the inputs will be wood that taken from trees in forest. Trees in the forest that we all agree its function of balancing the ecology of life are threatened to destroy.

The utilization of the forest to support pulp and paper industry is not apart from government authority. Government facilitates forest either for industry or none industry purpose by considering cost and benefit and the balance of ecosystems. Government is obliged to stress the society welfare as well as environment balance much higher than just such business oriented. Government policy, industry need, society life and nature life should proportionally be shared and be treated in the balance weight. If not then disaster may even come to destroy the life.

From Indonesia pulp and paper association, the capacity of producers in the 1997 respectively as follows Indah Kiat as of 1,254 thousand ton per year, Fajar Surya as of 500 thousand ton per year, Surabaya Agung as of 337 thousand ton per year, Suparma as of 150 thousand ton per year and Tjiwi Kimia as of 651 thousand ton per year. These capacities are still added by some manufacturers beyond the listing company in stock market that their production achieved into other million ton per year. From five listing companies above we then gathering the number of 2.892 million ton yearly. This huge of pulp and paper production will consequently require huge amount of wood as well. The more pulp and paper will produce, the more trees in the forest will be cut down. So the figure of production will impact the wide of forest to destroy.

Government should carefully manage and regulate the forest resources. Of course, there has been such agreement among the industry player, government and board of people representative to share and accommodate their interests. This agreement should be implemented wisely and appropriately to deny the failure of nature balance.

From the point of the industry player’s view, there has been business focus and orientation. They tend to justify business that need forest resources like usual business as to maximizing profit while keeping cost down. They are not really aware of how to utilize forest resources and its high value content proportionally while maintaining forest’s going on survival. They focus more on business target and capacity to achieve demand fulfillment. The more demand rise in the market, the more capacity they will supply. As their business running faster, while contrary natural resources suffer of its damaged. 4By indicator of business growing, as stock price of Fajar Surya and Indag Kiat announce IDR 775 and IDR650 respectively from one day before of pricing IDR725 and IDR625 that mean they achieve the increase of 50 and 25 point respectively. Contrast to this fast growing business, recently on the television was broadcasted widely the disaster of flood attacking, erosion of land and the suffering of many homeless people.

Business player sometimes do not realize that every natural resource has its limitation. They may be entrapped in short terms interest, narrow landscape view while disobeying the more important long terms life. So, what they are doing that they keep on exploiting the forest to achieve their own business. They sometimes forget that forest takes longer time to recover than they harvest it. As nowadays condition, the number and width of the forest is getting narrower in every time. The nature of life often remind by some disasters coming into human being and society. Flood, hot climate and animal anger occur and attack the environment and human being. The disasters destroy almost all of environment and threaten even human being survival.

For further illustration there were some cities in Sumatra are suffered of flood recently. The roads and streets that link and connect cities are in a very bad condition, facing society to hard situation of doing their activities. Some people lose their home of flood covering. They really suffer of food shortage and homeless. Children suffer of illness and unhealthy environment. This disaster of flood further happens in some part land of Java, part of Kalimantan and other parts of country. Society must handle burden of high social cost instead they get more welfare of forest resources occupations. This kind of disaster often occurs in wet season.

How kind of disaster has attacked under dry season. Firing happens everywhere in the forest and its environment. Society and human being are threat of dead as being victims of forest firing. Again they lose their home and their life resources due to the mismanagement of forest. Society is forced to facing hard phase of their life to struggle their welfare.

CONCLUSION

Business and ecology have their reciprocal relationship. Business has its benefit over supporting human being needs. In the long term, business will contribute to society welfare. Business also contributes value added of input to transform into output of finished goods. Pulp and paper industry was born to respond the need of paper. This industry processes the wood of trees that derived from forest into paper product. Paper is important commodity that widely used to support the activity of other industries, personal and society. From the industry cycle, the industry player will collect profit, government get its taxes while society may supply the labor and rewarded by payment. Some parts that involving in the industry have shared and got their own contribution.

Forest is important part of ecology systems. While business exploiting its content, natural resources conservation need to implement. Business player together with government must allocate its profit to reserve the forest recovery. The existence of forest must be maintained and be cared. Forest contributes high role against human being and society life. Forest that is not treated properly will produce high risk of disaster. Flood and firing are consequent of forest damaged. In the long term, the damaged of forest will more seriously attack against environment life.

Forest as natural resources should be managed and controlled properly. Exploitation that does not care natural resources limitation may effect destruction and damaged. It is important for the players that involved in pulp and paper industry consider very carefully the ecology systems. Forest is quite important part of ecology existence. Many victims indeed fell as consequent of forest damaged. It is better to prevent more victims of people by pushing immediate recovery of the forest. Government together with business player must hand in hand to plant more trees to replace the cutting down trees. The scheme of recovery is already set up. Acting now and it is better late than never.