Sengon wood, whose price has quadrupled to Rp 800,000 (US$79) per cubic meter in the last four years, has become the main alternative raw material for Java wood-based companies.
Djojo Boentoro, the president director of PT. Dharma Satya Nusantara (DSN), a firm that produces mainly plywood, blockboard and wood panels for doors and floors, said that as log production from natural forests decreased as a result of forest degradation, wood-based industries had turned to lesser-used alternatives to supply their plants.
"Given the limited supply *of wood* originating from production forests, which mostly grow other kinds of trees such as the teak and mahogany, Java wood-based companies have been increasingly buying the fast-growing sengon tree," he told The Jakarta Post in Temanggung, Central Java, where one of the company's four plants is based.
Like most wood-based firms, DSN initially used light-red meranti, ulin or iron wood as raw materials for its wood products.
"The price of sengon has already reached up to Rp 800,000 per cubic meter. Sometimes it is even 1 million *per cubic meter* if the sengon is top quality," Djojo said, compared to teak that cost an average of Rp 1.5 million per cubic meter.
Djojo said sengon represented 85 percent of the total raw materials used in his plant.
Competition for sengon among local players is also getting tougher. Other big companies, such as PT Daya Sempurna Cellulosatama, PT Bina Inti Lestari, PT Binatama Kayone Lestari, PT Kutai Timber Indonesia and PT Sumber Graha Sejahtera, have been also using sengon as raw material.
PT Sumber Graha Sejahtera's plant in Balaraja, Banten, which produces wood panels, uses 350,000 cubic meter of sengon per year, but recently reported difficulties in securing sengon supplies to meet increasing demand for its products.
PT Daya Sempurna Cellulosatama, a pulp and paper producer based in Bekasi, West Java, said it had to compete with other wood industries when sourcing sengon, as more and more firms relied on it for raw material.
Many of the wood-based companies have started buying lesser-used species, such as the rubber tree, the coconut tree or palm oil trees, but they still rely mainly on sengon as their main source of raw material.
Wood-based companies in Java alone have used about 4 million cubic meter of sengon per year in the last three years.
With many of them wanting to increase production to meet rising demand from overseas markets, especially from North Africa and the Middle East, the demand for sengon will continue to grow.
Hadi Daryanto, the director general in charge of forest production development at the Forestry Ministry, said the rising demand for sengon also partly resulted from the government's campaign to limit logging in natural forests while promoting the use wood derived from other kinds of tree species grown in production and community forests.
The sengon tree is believed to have become the favorite specie to be grown because of its economic and ecological benefits. Unlike teak and ulin, sengon is a kind of softwood that can meet the needs of many wood companies.
"Sengon trees are easily grown in any kind of soil and weather across Indonesia and grow faster than other species. They can be harvested within five to 10 years of planting, much faster than teak, which takes between 25 and 30 years," he said.