Indonesia is welcoming Chinese investors to support the revitalization of wood processing machinery in the industry.
Acting Director General of Sustainable Forest Management at the Ministry of Environment and Forestry, Agus Justianto, stated that the revitalization of industrial machinery would optimize the potential and enhance the added value of forest products.
“We are open if Chinese investors are willing to support the revitalization of Indonesia’s wood processing industry,” he said during an audience with the Indonesian Furniture and Craft Industry Association (HIMKI) and the China National Machinery Association (CNFMA) at the Indonesia International Furniture Expo (IFEX) 2024, held at the Jakarta International Expo on Friday, March 1, 2024.
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According to data from the Ministry of Environment and Forestry, the sawmill and woodworking industries are comprised of 3,485 units, including 391 large-scale units (with a capacity of more than 6,000 m3/year) and 3,094 small and medium-scale units (with a capacity of less than 6,000 m3/year).
The total installed capacity of sawmill and woodworking industries reaches 9.5 million m3/year for large-scale operations and 10.5 million m3/year for small and medium-scale operations.
Agus mentioned that the industry’s utilization rate is currently very low, mainly due to the lingering effects of the Covid-19 pandemic and aging machinery. “Most of the sawmill and woodworking industrial machinery needs revitalization,” Agus said.
24% of the industry still uses machinery installed before the year 2000, while only 37% of the industry utilizes machinery installed after 2010.
According to Agus, investor support, including from China, is crucial for revitalizing wood processing machinery. Further efforts are needed to secure financing support for the implementation of machinery revitalization.
During the meeting, Agus also emphasized Indonesia’s commitment to using certified legal and sustainable wood under the Timber Legality Verification System (SVLK), ensuring traceability.
In relation to this, Agus stated that Indonesia invites China to follow up on the “Mutual Recognition of Wood Product Legality” initiative established by both countries before the Covid-19 pandemic, to further promote the use of legal and sustainable wood in global trade.
Secretary General of CNMFA, Wei Jian, explained that the wood processing industry in China is rapidly developing, thanks to reliable machinery support, from upstream to downstream.
According to Wei, the forestry industry in China can generate 9 trillion RMB and contribute up to 8% of China’s total GDP.
“The forestry industry in China employs up to 60 million workers,” he said.
Several Chinese wood processing companies also attended the meeting, expressing readiness to invest in Indonesia.
Meanwhile, Chairman of HIMKI, Abdul Sobur, hopes that if the revitalization of wood processing machinery can be implemented, the furniture and craft industry will become more vibrant. ***
