Timber production in Indonesia
More than 65 percent of Indonesia's forests are productive forests, about 85 percent of which are owned by the country. However, most state productive forests are managed directly by private companies and organizations that are forest donors. Major timber producers in Indonesia cut down natural and artificial forests. Newspapers are still the raw material of these major industries.Private plantations in Indonesia mainly produce acacia wood, while state-owned plantations produce teak and pine wood. Plywood is the most exported, followed by roundwood and to a lesser extent veneer. In terms of production, Indonesia has long been known as one of the world's leading furniture manufacturers and its teak and rattan products are in high demand both domestically and internationally. Indonesia's wood industry sector also has the largest employment in the country.
Challenges facing Indonesia's forest industry
Indonesian timber supply chains and furniture manufacturers must provide documentation that timber supplies have been legally harvested and obtained in accordance with the Legal Timber Quality Assurance Standard (SVLK/TLAS) and FLEGT timber export licenses. They export their products mainly to the European Union, which is one of the largest export markets for wood products. However, these efforts are not enough to solve the problem of illegal logging in Indonesia, as logging, which is the mixing of legal wood with illegally harvested wood, is still widespread in Indonesia. Although the government has done a decent job promoting FLEGT licensed timber producers, there is still a need for stronger enforcement.Moreover, despite its vast natural resources, Indonesia ranks third in ASEAN in terms of export value of wooden furniture. Due to licensing restrictions and complicated procedures, many foreign furniture manufacturers have moved their business and operations to Vietnam. In 2021, Vietnam's wooden furniture exports will total $13.32 billion, surpassing nearly $2 billion earned by Indonesia's furniture sector in the same year. The relatively low wages of Indonesian forestry and industrial workers also make these industries attractive to the local population. Indonesia's forestry sector will benefit from improved technological know-how and the removal of inefficient regulatory barriers, which will boost the national economy while conserving biodiversity.
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