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Paper industry to benefit from govt's education allocation
The nation's paper and printed material industry, which generates top dollar from exports, is "strong enough" to weather the estimated global economic slowdown and may grow next year by 4
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The nation's paper and printed material industry, which generates top dollar from exports, is "strong enough" to weather the estimated global economic slowdown and may grow next year by 4.1 percent, up from this year's projected 3.9 percent.
"The paper industry will be able to grow positively next year as (the Education Ministry) has bought the licenses of numerous books from publishers, which is set to push down book prices," said Dedi Mulyadi, the Industry Ministry's research and development agency head, in an interview Monday.
"This will encourage people to spend money on books and eventually boost the paper industry."
The proposed higher allocation for the education sector in 2009 state budget will also bode well for the paper industry.
"A 20 percent allocation of the state budget means the government will spend more on programs pertaining to book aids," he said.
The government has proposed to the House of Representatives that Rp 244.44 trillion (US$24.93 billion) out of next year's Rp 1,222 trillion state budget be allocated to the education sector.
While the lion's share of the funds will go to benefit teachers, including higher salaries and allowances, allocation for books will also be raised.
H. M. Mansyur, chairman of the Indonesian Pulp and Paper Association, said pulp and paper industries were enjoying robust profits as prices of pulp -- raw material for paper production -- soared, pulling up paper prices with them.
He said short-fiber pulp prices in the global market rose by 12.5 percent in the first eight months of the year from $720 per ton to $810 per ton, while paper prices increased by 15 percent to $1,150 per ton from $1,000 per ton.
The trend is likely to continue in coming months as "global demand for paper will remain high".
In the first half of the year, exports of paper and paper-based products amounted to $1.9 billion up from $1.6 billion in the same period last year.
Exports totaled $3.14 billion in 2007.
The country's production of pulp and paper stood at 5.8 million tons and 8.2 million tons respectively last year, according to the Industry Ministry.
However, Mansyur said the main challenge for the pulp and paper sectors was a short supply in local wood -- raw material for pulp and paper productions.
Overall, Dedi estimated that the country's industrial output would grow by a moderate 5 percent next year, with the textile, leather and footwear industries set to post a contraction.
Among the sectors with the highest growth will be the transportation and machinery industries, which are expected to expand by 11.58 percent, relatively similar to this year's growth projection.
