Sihol Parulian Aritonang, the president director of PT Riau Andalan Pulp Paper (PT RAPP), a subsidiary of the Asia Pacific Resources International Limited (APRIL) Group, said that Indonesia’s pulp and paper products were more competitive overseas because their raw materials were cheaper, not because of dumping practices.

According to him, the production costs for Indonesian pulp and paper are lower because their raw materials are taken from a fast-growing tree, which can be ready for harvest after only five years, compared to 25 years in Europe and the United States.

“The reality is that our country has fertile [soil], all-year sunlight and high rainfall rates. If we are able to naturally produce abundant raw materials [for paper], then the production costs would be lower.”

“So why are we blamed [for dumping] then? I often get confused about it,” said Sihol,
who has been deliberating with the Trade Ministry to find a solution.

Sihol said that the company would nevertheless maintain its paper production this year at its usual capacity, which typically reached about 3.9 million tons of paper and pulp every year.

Yet, Sihol’s concerns probably echo Indonesia’s longtime qualms about dumping allegations from other countries toward its local paper producers, of which there are 84, according to the Trade Ministry data.

In 2017, the US imposed punitive levies of between 20 and 70 percent of the paper's initial value after investigators accused Indonesian paper producers of selling for less than Malaysia. In the same year, Australia also adopted a similar stance, claiming that Indonesia’s dumping margin ranges between 2.9 and 45.1 percent.

According to World Trade Organization rules, any country is allowed to charge antidumping duties on imported goods as long as it could prove that the products are sold for prices below their normal value.

Meanwhile, Indonesian Pulp and Paper Association (APKI) executive director Liana Bratasida said that such charges had inflicted wounds on the export value of paper and pulp. For instance, 2018 Trade Ministry data revealed that the export value of A4 paper had plummeted by 36.8 percent to US$9.47 million year-on-year between January and September.

In the first three months of 2019, the worth of pulp and paper exports had fallen by 15.26 percent yoy to $79.04 million in January and by 15.04 percent to $86.09 million yoy in February, according to recent Trade Ministry data. The two commodities started to crawl back up in March, when their export value rose by 5.9 percent yoy to $610.92 million.

Still, the APKI has repeatedly expressed hope of meeting its 5 percent target for pulp and paper industry growth as the association previously estimated 2 percent growth in 2019 of global paper demand. Their recent statistics had also revealed paper export volumes increased 0.92 percent year-on-year to 780.04 tons in the first quarter, indicating a bright outlook for the rest of the year.

“And we can always accuse them back [of dumping] if they ever try to haphazardly accuse us of dumping again, especially since their allegations could cause us financial loss for up to five years,” Liana said.

Some countries that imposed dumping tariffs have dropped their charges, such as Japan in 2013. Japan had once accused PT RAPP, along with 11 other paper producers, of committing unfair trade practices.

India followed in Japan’s footsteps last year by exempting Indonesia from its antidumping investigation after it lacked preliminary evidence of similar violations.

Indonesia is one of the biggest pulp and paper producers in the world. Currently, the country occupies the 10th spot for pulp manufacturing and sixth place for paper production.

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