Illegal logging is seriously affecting Indonesia’s plywood sector, with many companies already forced out of business, according to the industry association.
The Indonesian Plywood Association (Apkindo) says illegal logs are being smuggled out to China and Malaysia, where companies can produce cheaper plywood without the burden of forestry-related charges and then export the products back to Indonesia.
Apkindo says about one third of 115 local plywood factories have closed as imported products take up about 60% of the domestic market.
One estimate puts illegal logs sold to Malaysia and China at about 300,000m3 per year. The Indonesian government is planning to impose a permanent ban on log exports to protect forest resources.
The country’s plywood industry has also been hit by the global economic slowdown and lack of funding to replace old machinery, says Apkindo.
