Indonesia, one of the world’s top exporters of wood products to initiate joint promotions with a number of stakeholders as part of an effort to improve market share of wood products in Germany, the biggest economy in the European Union.
The joint promotion efforts is expected, not only to deepen penetrations into the German markets, but also to create more benefits.
Indonesia is the country that has been recognized under the EU Forest Law Enforcement, Governance, and Trade (FLEGT), which means that wood-related products from Indonesia has met the high expectations for both sustainability and legality.
“It is very important to carry out a joint campaign to stimulate the German market for Indonesian FLEGT-licensed products,” said Ambassador of The Republic of Indonesia to The Federal Republic of Germany Arif Havas Oegroseno when opening a dialogue between Indonesian-German wood product business players facilitated by the Embassy on Wednesday 9 March 2022.
Ambassador Havas explained that Indonesia–EU Voluntary Partnership Agreement (VPA) is a legally binding trade agreement, which is the key component of the EU FLEGT.
In addition, joint promotion is part of important steps in penetrating the European market successfully.
Ambassador Havas also explained about the cooperation program between Indonesia and the University of Freiburg in Germany to study the potential of the market of forest industrial products in Europe and how Indonesia forest-related products can help fulfill the market demand.
“Currently, the study is still ongoing,” said Ambassador Havas.
As the biggest economy in the bloc, Germany offers a potential market for Indonesian wood-products.
Based on the data from Indonesia’s Ministry of Environment and Forestry in 2021, it showed the export value of Indonesian wood products to Germany reached $171.1 million, an increase of 23.3 percent from 2020, which stood at $138.7 million.
Furniture products exported to Germany in 2021 dominated Indonesia’s wood product exports, generating $73.9 million in forex revenue, followed by wood panels ($37.9 million).
A 2021 data from the Association of Indonesian Sawmill and Carpentry Producers (ISWA) shows that Germany sits in the 11th rank of the export destination on woodworking products. It has reached with a value of $60.5 million with an average product value of $1,096 per metric ton.
The woodworking product has a wide range of product from molding, housing components, door jams, S4S, to wood laminating.
Wood products exported to Germany increasingly showed a positive trend in February 2022. Exports were recorded at $29.7 million in February 2022, an increase of 9.83 percent on year-on-year (YoY) basis.
Nils Olaf Petersen, Head of the Foreign Trade Department at GD Holz explained his association would support any activities to promote Indonesian wood products.
GD Holz, The German Timber Trade Federation, is the cross cooperative and representative industry association of the German Timber Trade with more than 800 members.
Petersen said that German market is very potential.
“The market is very good and there is an increasing demand for wood products in German,” he stated.
Some of the products such as flooring, woodworking and furniture are in a high demand in German.
Petersen also explained that the market opportunities are widely open along with the cessation of timber supplies from Belarus and Russia due to the conflict between the two countries and Ukraine.
“Belarus and Russia are sources of softwood products, while Ukraine is a source of hardwoods such as Oakwood,” said Petersen.
Currently around 14 percent of Germany’s softwood imported from Russia, while another 14 percent from Belarus and 3 percent from Ukraine.
Meanwhile Belarus and Ukraine, each of them contributed around 14 percent of the total imports of hard wood products to German.
Petersen also promised to help Indonesian wood product producers finding strategic partners in the German market.
Chairman of the Communication Forum of Indonesia Forestry Community (FKMPI) Indroyono Soesilo stated that its forum appreciated the efforts made by the Indonesian Embassy in German to promote Indonesian wood products.
Indroyono, who is also the Chairman of the Association of the Indonesia Forest Concessionaries (APHI) emphasized his readiness to strengthen cooperation and promotion with business players in German to increase exports of Indonesian wood products to the country.
“Cooperation with partners in German is expected to increase German consumer acceptance of Indonesian wood products, so that it will increase exports,” he said.
To strengthening the penetration of the German market, a comprehensive discussion will soon be held between Indonesian plywood producers and the members of GD Holz German.
The online meeting attended by the representatives of associations which are the members of FKMPI, namely APHI, ISWA, Indonesian Pulp and Paper Association (APKI), Indonesian Wood Panel Manufacturers Association (APKINDO), Indonesian Light Wood Producers Association (ILWA), Furniture and Craft Industry Association. Indonesia (HIMKI), and the Indonesian Furniture and Handicraft Industry Association (ASMINDO). ***
