RUBBER WOOD MARKETING IN INDONESIA Anang Gunawan and Arief Rachmawan Indonesian Rubber Research Institute
I. INTRODUCTION
1. Demand for wood at international market continues to increase, but potential wood availability from forest is limited 2. Forest logging has been restricted in order to take care of sustainability of environment 3. The result of reforestation programs seems`not yet satisfied 4. The prospect of RW market develops positively in short and long term
5. The utilization of RW for wood industry is low, far behind compare to Thailand, Malaysia and India 6. RW potency from replanting old/ damage rubber is quite large and for anticipating of its possibility rubber clones producing wood and latex it is time has come to conduct study comprehensively the potency and economic of RW as raw material of wood industry
This article explains briefly the condition of rubber wood marketing in Indonesia as primary step to see the opportunity, obstacles, and also matters which require improving the role of rubber wood industry
II. DEMAND AND POTENCY OF RUBBER WOOD
Rubber Wood Demand World consumption was predomited by : USA : 92.400 m3/yr Europe : 30.200 m3/yr Taiwan : 27.400 m3/yr continues to increase (decreasing in forest wood supply) Demand of RW in country and at International market can not be detected (information is not available at DC&I and CS Bureau)
RW potency to be processed is big enough considered rubber smallholder replanting plan in Indonesia reaches 56,000 ha / year No. Province Rubber Smallholder (2003) 1 2 3 4 5 6 7 8 9 10 11 12 NAD N. Sumatra W. Sumatra Riau Jambi S. Sumatra Bangka Belitung Bengkulu W. Kalimantan C. Kalimantan S. Kalimantan E. Kalimantan Production (Ton) 45,307 189,598 61,845 189,922 176,633 266,212 14,305 32,288 166,585 132,680 52,121 14,062 Area (Ha) 70,475 285,059 98,389 363,090 418,952 626,540 31,169 59,271 356,774 250,612 111,908 36,481 Replanting Plan (ha) 2005 2006 2007 2008 2009 2010-2,500 6,000 7,500 6,000 12,500 500 500 7,000 5,000 7,000 1,500-2,500 3,000 12,500 5,000 19,000 500 1,000 3,000 5,000 3,000 1,500-2,000 4,000 15,000 4,000 16,5000 500 1,000 5,000 2,000 5,000 1,000-2,000 4,000 15,000 4,000 16,500 500 1,000 5,000 2,000 5,000 1,000-2,000 2,500 10,000 4,000 17,000 500 1,000 8,000 2,000 8,000 1,000-2,500 6,000 7,500 4,000 12,500 500 1,000 8,000 5,000 8,000 1,000 Indonesia 1,341,558 2,708,720 56,000 56,000 56,000 56,000 56,000 56,000
These opportunities is not yet utilized maximally main product exported is only furniture components (semi products not the finishing-goods-have high value) Finishing-goods marketing at domestic not yet develop well the supply of rubber wood products depends on its demand which is still limited by contract with some countries
III. DOMESTIC RUBBER WOOD MARKETING CHANNEL
Rubber Wood Marketing Channel Log Diameter > 14 cm Factory Moulding Smallholder Supplier Sawn Timber Consumers Log Diameter 10-14 cm Factory Particle Board RW diameter > 14 cm sold to Sawn Timber closest factory RW diameter 10-14 cm sold to particle board factory small size of RW sold as firewood to tile factory, brick, soybean cake (tahu), and fermented soybean cake (Tempe) or charcoal
obstacles Farmers get benefit from selling the rubber wood as raw material for wood industry and the revenue can be used for supporting replanting their rubber, but the margin received by them is still low Rubber wood marketing is not efficient yet
Other form of RW marketing is the cooperation through the farmers cooperative unit and factories could obtain remunerative price RW and rubber planting material for replanting Continued to be developed by government as one of the efforts in self-supporting smallholder rubber replanting
Estimation of rubber wood economic value received by farmer per ha Distance (km) Transport per truck a Cost/ha (Rp) Transport per ha b Others/h a c Total of rubber wood value Farmer s Net Return (Rp) Planting material d Cash < 20 100.000 1.200.000 900.000 6.000.000 900.000 3.000.000 20-50 150.000 1.800.000 900.000 6.000.000 900.000 2.400.000 50-100 200.000 2.400.000 900.000 6.000.000 900.000 1.800.000 100-150 300.000 3.600.000 900.000 6.000.000 900.000 600.000 >150 400.000 4.800.000 900.000 6.000.000 0 Not feasible Notes: a Volume of wood per ha: 60 m3 or 12 trucks. Asumption: clonal ex project, 300 trees/ha b Volume per truk: 5 m 3 c Cost of cutting, loading, unloading and others: Rp. 75 000/truck d Stump : 600 stump @ Rp 1500/stump
IV. CONSTRAINT IN RUBBER WOOD MARKETING A. Institution B. The Source of Raw Material C. The Quality and Product Delivery D. Product and Export Tax E. Domestic Market F. Marketing Channel G. Research and Development
A. Institution Supervision and exploitation system of RW do not have the clear institute structure DOA is less effort to develop RW business DOF is not taking in hand this RW industry (RW not wood from forest area) DOIC in development of RW industry was not effective ( not have a clear concept) Indonesian Saw millers and Woodworking Association, do not able to play role optimally
B. The Source of Raw Material mainly from smallholder rubber plantation, the risk in: the case of supply continuity price stability administration management variation in quality : wild seedling less maintenance bad tapping (lower log quality) RW Industry tends to make partnership with the big plantation
C. The Quality and Product Delivery Other constraint faced importers : inconsistency in the case of quality and time of product delivery Same product type but vary in quality RW Industry tends to orient at the cheap technology Labors do not realize the important of the consistency in quality products Time accuracy in term of product delivery producer ambition which often accept the order more than its production ability
D. Product and Export Tax Product exported : component furniture Each buyer determines different standard quality no information : buyer countries and the price of RW products export tax at product : 150 US$ / m3 To obtain the better margin and lessen the competition between factories : develop finished products diversification should be supported strongly design, quality control and product innovation.
E. Domestic Market Domestic market potency is not yet exploited but there is a lot of imported furniture Less impression & appreciation to RW products export orientation, sell locally only if they have excess and rejected products design quality, is not more interest than the conventional wood products Limiting in diversification products, the penetrating and substitution ability are weak all who involved in rubber plantation and RW production should use the RW products
F. Marketing Channel Constraints faced in RW marketing : 1. Farmer not yet known where should sell their RW 2. Rubber area can not be reached by truck to transport RW 3. Distance (rubber area to factory) is quite far 4. Price accepted by farmer is still very low
5. Quality of RW wood is generally lower and varies since different crop age difficulties in estimating price and volume RW, even tend to RW volume able to be processed to become lower 6. Operating expenses still more beneficial to do other business. There are ilegal charges which griped by many factories, supplier and sawn timber
7. Many officers which not yet known regulation concerning RW marketing which is no need letter of license like forest wood, so that in transportation often happened problem and will slow down to factory as a result many damage wood (blue stain) 8. Until now not many factories are capable to process rubber woods become particle board, MDF, pulp 9. At international market, each buyers determine high quality, so that many rubber wood was rejected
G. Research and Development No one research institute getting specialized task to take in hand the problems and action of perfecting the quality of RW products National RW industry grows itself through adoption the technology from other countries, it makes become the follower in RW technology RW industry can not conduct R & D by himself They have been occupied routinely with them production target R & D need the budget, labour and special facility
IV. CONCLUSION
Prospect of RW for wood industry would continue positively in the short and long term Indonesia does not yet take this opportunity better compared to other countries although having big enough RW potency, especially coming from smallholder rubber
The developmnent of RW in Indonesia 1. RW marketing could be efficient by : Improving immediately the supporting of elements marketing system Accelerating replanting old/damage program Developing RW marketing through the cooperation a group offarmers ( farmers cooperative unit) and RW factories Increasing role of RW factory in term more active in supporting replanting program
2. The government should facilitate immediately, intensively and systemically development of RW products Supervision and exploitation system of RW Should have the clear institute structure Availability of raw material of RW Arranging quality consistency Availability market information Development of diversification products Deregulation export tax of the RW Improve the condition of domestic market
3. Need the existence and strong commitment of the government through the certain Department work along with the Local Government and private sector Built an effective and consistence network on development of national RW industry Carry out a forum RW business meeting involving RW industries & institutions in order to facilitate the establishment national RW assoc supported by a research institute which work together with private sector in development of RW products