The Indonesian government and business actors are ambitious to boost exports of wood products and derivatives to the United States (US). Various existing challenges will be sought solutions together so that the market share of wood products in Indonesia in the US can continue to increase.
Indonesian Ambassador to the U.S., Rosan P. Roeslani revealed that Indonesian wood product producers must work seriously on the US market, because the demand for Indonesian wood products in the US continues to grow supported by furniture products for residential and office needs.
"In the next few years, the demand for furniture products is projected to continue to increase along with changes in tastes for products that suit an environmentally friendly lifestyle," Rosan said in a press release, Friday (17/2).
Director General of Sustainable Forest Management of the Ministry of Environment and Forestry (KLHK) Agus Justianto revealed, Indonesia has added indicators related to sustainability aspects so that SVLK is now transformed into a Legality and Sustainability Verification System (SVLK) which guarantees the legality and sustainability of wood products exported abroad.
"Based on SVLK, exports of Indonesian wood products were recorded at US $ 14.51 billion, the highest in history and rose 7% year on year (YoY) where in 2021 exports were recorded at US $ 13.5 billion," said Agus.
Agus added, the US became the second largest export destination under China with a value of 2.23 billion US dollars. Products that U.S. consumers are interested in are wood furniture, plywood (wood paneling), and paper.
Chairman of Apkindo Bambang Soepijanto revealed, one of the products that the US market is interested in is thin plywood with a thickness of 2.7 mm which is used for the manufacture of caravan cars.
Chairman of FKMPI, who is also Chairman of the Indonesian Forest Entrepreneurs Association (APHI) Indroyono Soesilo stated that Indonesia has the opportunity to continue to increase exports. One reason is that the U.S. imposes high duties on products from the PRC, which is the largest exporter of wood products there.
In addition, Indonesia also received a Generalized System of Preferences (GSP) facility from the US so that some wood products are duty-free. "If our market share can be increased by 100% from the current around 2 billion U.S. dollars, only about 4 billion U.S. dollars. It is still small compared to its potential of reaching 63 billion US dollars," said Indroyono.
He said, vigorous and joint promotion needs to be done so that consumers in the US can increasingly accept Indonesian wood products. Indroyono also agreed on the need to build a permanent display center in the US as proposed by HIMKI and prepare a warehouse.
Abdul Sobur, Chairman of the Presidium of HIMKI, stated that the US market needs to be worked on seriously because of the export of Indonesian forest products, furniture ranks the largest. This is also in line with the direction of President Joko Widodo (Jokowi) who targets furniture exports to reach 5 billion US dollars by 2024.
"The competitive value of furniture products needs to be improved, among others in terms of design and logistical support, considering that most of HIMKI's members come from SMEs," said Sobur.
Sobur stated that the experience and success of the Indonesian diaspora from Be-Hu Line LLC in cooperating with SMEs to enter the US furniture market can be a reference and learning.
Halim Rusli, President Director of Integra Group, an integrated wood products producer that routinely exports to the U.S., agreed on the need to take advantage of the current U.S. fiscal U.S. policy of imposing high import duties on products from China.
"Support and regulation are needed from the Indonesian government so that Indonesian wood products can be stronger in the US market, including related to favourable import duties for Indonesian entrepreneurs, as well as strengthening the wider diaspora network of Indonesian entrepreneurs," Halim said.
Executive Director of the American Indonesian Chamber of Commerce Wayne Forrest reminded about the importance of understanding the provisions for importing wood products in the US regulated through the Lacey Act. The provision requires that imported products are not only legal but must also be sustainable. Forrest also agreed on the need for more massive promotion, design improvements for Indonesian wood products and education to consumers on the source of raw materials for wood products.
