S-099 Industri Kimia Dasar Kecuali Pupuk. 2.13. 9. S-112 Industri Barang-Barang Hasil Kilang Minyak. 2.06. 10. S-063 Industri Penggilingan Padi Dan ...
The Economic Analysis of SVLK: Economic Impact and Furniture Export Doni Satria Joan Marta Mubariq Ahmad
Introduction • EU and Indonesia has already ratified FLEGT-VPA • The Indonesian SVLK will be recognized as FLEGT License for EU Timber Industry Product market. • Permendag 19 in October 2015 exclude Furniture Industry Product from implementing SVLK for export • Need an economic analysis for the impact of SVLK implementation on Indonesian Furniture Export.
Introduction • This study reveals the importance of Furniture Industry for Indonesian Economy. using input output model • This study informed the Indonesian furniture export position on international (EU and US) market and analyzed potential loss/gain from SVLK implementation to export of Indonesian Furniture industry. descriptive statistics analysis • This study analyzed the effect of change in raw material value on revenue of furniture producer in order to analyze the effect of raw material cost increase to producers revenue at micro and small scale producers. regression analysis using BPS survey data • This study conducted in depth interview with exporters in Sidoarjo, Gresik, Jogjakarta, Solo and Jepara, micro and small scale furniture producer in Jepara. • The continuously improved SVLK implementation would benefit all stakeholders in Indonesian timber product industry, especially in furniture industry.
Economic Impact of Furniture and Timber Product Industry: backward linkages Ranking
Sektor
Backward Linkage
S-056 Industri Pengolahan Dan Pengawetan Daging S-073 Industri Makanan Lainnya
1.40
S-057 Industri Makanan Dan Minuman Terbuat Dari Susu S-107 Industri Jamu
1.36
S-151 Industri Alat-Alat Musik S-155 Ketenagalistrikan
1.32
S-066 Industri Roti, Biskuit Dan Sejenisnya S-086 Industri Pengawetan Dan Penyamakan Kulit
1.30
S-109 Industri Barang-Barang Kosmetik S-062 Industri Minyak Hewani Dan Minyak Nabati
1.28
S-092 Industri Furnitur S-089 Industri Kayu Gergajian Dan Olahan
1.18 1.13
84
S-095 Industri Bubur Kertas S-090 Industri Kayu Lapis Dan Sejenisnya
170
S-034 Kayu
0.75
1 2 3 4 5 6 7 8 9 10 33 52 53
1.38 1.35 1.32 1.30 1.28
1.13 1.06
Economic Impact of Furniture and Timber Product Industry: Forward Linkages Ranking
Sektor
Forward Linkage
S-163 Perdagangan Besar Dan Eceran Selain Mobil Dan Motor S-155 Ketenagalistrikan
7.06
S-165 Reparasi Mobil Dan Motor S-043 Minyak Bumi
2.99
S-169 Angkutan Jalan Raya S-100 Industri Pupuk
2.72
S-001 Padi S-099 Industri Kimia Dasar Kecuali Pupuk
2.64
S-112 Industri Barang-Barang Hasil Kilang Minyak S-063 Industri Penggilingan Padi Dan Penyosohan Beras
2.06
S-034 Kayu S-089 Industri Kayu Gergajian Dan Olahan
1.11 0.98
90
S-095 Industri Bubur Kertas S-090 Industri Kayu Lapis Dan Sejenisnya
133
S-092 Industri Furnitur
0.69
1 2 3 4 5 6 7 8 9 10 49 60 62
3.24 2.85 2.64 2.13 2.06
1.00 0.80
Demand Structure of Timber Product Industry: Share (% of Total Output) Kode Sektor
SEKTOR
Permintaan Akhir Permintaan Permintaan Antara Ekspor Domestik
Total permintaan akhir
S-089 Industri Kayu Gergajian Dan Olahan S-090 Industri Kayu Lapis Dan Sejenisnya
99.93%
-0.17%
0.24%
0.07%
80.71%
0.14%
19.16%
19.29%
S-091 Industri Bahan Bangunan Dari Kayu S-092 Industri Furnitur
79.28%
-0.15%
20.86%
20.72%
10.63%
68.61%
20.75%
89.37%
S-093 Industri Barang-Barang Lainnya Terbuat Dari Kayu, Gabus, Bambu Dan Rotan S-095 Industri Bubur Kertas
43.27%
41.87%
14.86%
56.73%
54.58%
-0.05%
45.47%
45.42%
S-096 Industri Kertas Dan Karton S-097 Industri Barang-Barang Dari Kertas Dan Karton
47.78%
4.67%
47.54%
52.22%
47.90%
41.04%
11.06%
52.10%
53.94%
21.27%
24.79%
46.06%
Total
Economic Impact of Furniture and Timber Product Industry: Multiplier Effect Kode sektor
Nama Sektor
Output Income Multiplier Multiplier
S-089 Industri Kayu Gergajian Dan Olahan S-090 Industri Kayu Lapis Dan Sejenisnya
1.8509
0.2711
1.7253
0.2025
S-091 Industri Bahan Bangunan Dari Kayu S-092 Industri Furnitur
1.8741
0.2575
1.9235
0.2534
S-093 Industri Barang-Barang Lainnya Terbuat Dari Kayu, Gabus, Bambu Dan Rotan S-095 Industri Bubur Kertas
1.8565
0.2960
1.8485
0.2006
S-096 Industri Kertas Dan Karton S-097 Industri Barang-Barang Dari Kertas Dan Karton
1.7209
0.1951
1.9566 1.8271
0.2553 0.2312
Aggregate Seluruh Sektor
Economic Impact: Result Interpretation • Base on demand decomposition of total output from timber product industry, furniture sector exports 20.75 percent of its total output, and 89.37 percent of total output is the final demand. – Intermediate demand of furniture sector is small, domestic furniture industry is not interconnected in a value chain system. – Final demand play an important role in furniture industry development.
• Furniture industry backward linkages index is 1.18, the change in furniture output would generate demand for other sector output from this sector. This sector relatively important in Indonesian economy (rank 33 out of 192). • Since furniture sector final demand composition is very large, the forward linkages index is small (0.69). Furniture sector is not raw materials for other sector
Economic Impact: Result Interpretation • Furniture sector output Multiplier is 1.93, one unit increase in final demand of furniture industry could cause total national output 1.93 unit. Furniture export increased total national output, hence economic growth. • Aggregate timber industry output multiplier 1.83, and 24.79 percent of demand in timber industry exported. Increasing timber industry product export could foster economic growth. • Income multiplier of furniture sector is relatively low compared to the other sectors in Indonesian economy and so is aggregate timber product sector. The capability for increasing income is not as high as capability of the sectors capability to increase output as the final demand increased. the issues needs to be addressed. • In general the final demand of aggregate timber product industry and furniture industry (domestic and exports market) plays an important roles in Indonesian economic growth.
The Furniture Industry Export Trend 1. Rapid growth of total export in the aftermath of Asian Crisis in 1998. 2. Sharp downturn in 2009 due to Global Financial and Economic Crisis hits the developed economies, the main world market and Indonesian furniture market 3. Furniture export during 2012-2014 experiencing high growth in US, EU and non EU+US+Japan 4. Since 2011 Share of EU export market fall while US and non US+EU+Japan market increased rapidly. 5. By 2013 EU export market share increase, but not yet recovered to pre crisis period. This is the indication SVLK implementation could recover the EU export market loss. 6. EU and US export share is more than 60 percent in 2014 and SVLK is an important tools for export penetration and recovering market loss.
US and EU Furniture Import Millions
Import EU28 30,000
•
25,000 20,000
•
44
15,000
94 10,000 5,000
• 2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
-
•
60,000 50,000 40,000 30,000
44
20,000
94
10,000 -
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Millions
Impor USA
•
Wood working product (HS 44) and Furniture Product (HS 94) market demand in EU and US is more than 100 billion USD Both region experiencing high import growth since year 2000 but in global economic crisis import falls and recovered since 2010. In 2011 Indonesian furniture export fall but the EU and US import increased. Indonesia lost EU furniture export market in 2011. many issues involved for this downturn and still debatable. EU import falls in 2012 to 2013 period and back to positive growth in 2014, on the contrary Indonesian exports increased since 2012. SVLK implementation recovered Indonesian market lost and increasing export to EU. We can not argue that the increased in furniture export to US during 2012-2014 period due to SVLK implementation, since US imports increase steadily in that period.
Indonesian Wooden Furniture Export Share in EU Market (appendix 1B permendag)
22.07% china
vietnam 3.19% 3.35% 5.16%
Indonesia 55.55%
turkey Malaysia Other
10.68%
• •
•
China dominates 55 percent out of 7.5 Billion USD of EU wooden furniture imports in 2014. Indonesia in 3rd position with 5.16 percent market share, after Vietnam with 10.68 percent. Indonesia main competitors in EU wooden furniture market is Vietnam, Malaysia and China.
China and Vietnam domination of EU wooden furniture market was due to production base relocation of big furniture company from EU countries to this China and Vietnam since early 2000. Both became interconnected with the furniture global value chain. Low labor cost and access to raw materials is the motivation of these company for relocating their production base to China and Vietnam China and Vietnam have advantage of cheap illegal wood from Indonesia and other Asian Countries. Indonesian SVLK will be recognized as FLEGT license in near future no due diligence cost applied to Indonesian export to EU. FLEGT license requirement from EU importers could potentially trigger production base relocation from Vietnam and China to Indonesia, the relocation is in search for legal woods. Indonesia (and EU government) have to exploit this potentials as SVLK recognized as FLEGT license. This would promote the importance of FLEGT license to other VPA countries.
Indonesian Wooden Furniture Export Share in US Market (appendix 1B permendag) • USA Import Share by Country 15%
China Viet Nam
3% 4%
canada
47%
6%
mexico Malaysia
9%
indonesia 16%
•
•
Other
• 84.6 percent of 17.4 billion USD import from USA are from 6 countries, namely China, Vietnam, Canada, Mexico, Malaysia and Indonesia. • China and Vietnam dominated US market above Canada and Mexico. Indonesia share in US Import is lower than Malaysia
•
•
•
US import is three times bigger than EU import, but EU per capita furniture is 10 percent higher than North America and fourth times bigger than other market (CEPS, 2014) US import from China and Vietnam increased significantly since end of nineties due to production base relocation from US and Canada company. Lacey Act amendments in 2008 SVLK V-legal document as FLEGT license is a marketing tools for Indonesian market penetration and competition in US market. In 2004 US Company relocate their production of bedroom furniture from China to Vietnam. China bedroom furniture export was banned to US market due to anti dumping penalty on China bedroom furniture export. If Indonesia is the first FLEGT license country, production base relocation by US company to Indonesia from Vietnam and China is highly possible. Indonesia should prepare for FDI from furniture industry. A comprehensive strategy is needed, input from connected industry, furniture industry location etc.
EU Imports By Country 2014 No 1 2 3 4 5 6 7 8 9 10
No 1 2 3 4 5 6 7 8 9 10
940161 (seats, wooden frames) 940169 (seats, wooden frames combined) 940330 (Office Wooden Furniture) Country Trade Value (US$) Share Country Trade Value (US$) Share Country Trade Value (US$) Share China 1,316,958,476 69.49 China 199,610,465 38.98 China 53,385,191 48.80 Viet Nam 113,244,566 5.97 Viet Nam 130,712,585 25.52 Turkey 8,758,087 8.01 Norway 106,386,850 5.61 Indonesia 62,823,213 12.27 Indonesia 8,462,403 7.74 Bosnia H 72,099,001 3.80 Thailand 30,997,605 6.05 Switzerland 6,171,816 5.64 Malaysia 61,218,951 3.23 Malaysia 21,416,791 4.18 Viet Nam 4,999,481 4.57 Turkey 51,870,943 2.74 Norway 13,440,503 2.62 USA 4,903,781 4.48 Serbia 40,245,289 2.12 India 11,437,203 2.23 Malaysia 4,077,080 3.73 Thailand 22,891,321 1.21 Turkey 6,917,299 1.35 Brazil 3,359,169 3.07 Indonesia 21,893,166 1.16 Bosnia Herzegovina 5,612,125 1.10 Serbia 2,440,011 2.23 USA 14,744,708 0.78 TFYR of Macedonia 5,261,972 1.03 Canada 1,671,220 1.53 Total Impor EU28 1,895,311,985 96.11 Total Impor EU28 512,137,282 95.33 Total Impor EU28 109,385,143 89.80
940340 (Kitchen wooden furniture) 940350 (Bed room wooden furniture) 940360 (Other wooden furniture) Country Trade Value (US$) Share Country Trade Value (US$) Share Country Trade Value (US$) Share China 33,290,544 47.09 China 423,478,471 44.29 China 1,637,389,600 53.88 Serbia 10,156,026 14.37 Viet Nam 130,260,860 13.62 Viet Nam 407,069,426 13.40 Turkey 5,088,577 7.20 Brazil 79,425,186 8.31 Indonesia 267,420,402 8.80 Switzerland 4,037,894 5.71 Turkey 68,193,216 7.13 India 145,146,008 4.78 Ukraine 2,719,205 3.85 Malaysia 57,441,861 6.01 Malaysia 79,068,110 2.60 Bosnia Herzegovina 2,595,334 3.67 Switzerland 43,927,875 4.59 Switzerland 66,844,284 2.20 Viet Nam 2,061,276 2.92 Bosnia Herzegovina 38,200,025 4.00 Bosnia Herzegovina 55,329,453 1.82 Rep. of Moldova 1,837,718 2.60 Indonesia 24,732,893 2.59 Turkey 53,882,774 1.77 USA 1,348,720 1.91 Serbia 15,554,320 1.63 Brazil 51,230,899 1.69 Malaysia 1,094,932 1.55 Belarus 13,011,593 1.36 Thailand 38,843,590 1.28 Total Impor EU28 70,694,286 90.86 Total Impor EU28 956,121,039 93.53 Total Impor EU28 3,038,953,314 92.21 *Indonesia #11
US Imports By Country 2014 No 1 2 3 4 5 6 7 8 9 10
940161 (seats, wooden frames) 940169 (seats, wooden frames combined) 940330 (Office Wooden Furniture) Negara Trade Value (US$) Share Negara Trade Value (US$) Share Negara Trade Value (US$) Share China 2,952,857,510 73.50 China 164,693,174 29.47 Canada 374,099,396 44.05 Viet Nam 284,204,738 7.07 Viet Nam 131,029,711 23.45 China 239,804,096 28.24 Mexico 232,490,336 5.79 Indonesia 83,007,190 14.85 Mexico 44,295,582 5.22 Canada 151,799,940 3.78 Malaysia 49,501,224 8.86 Viet Nam 26,704,593 3.14 Italy 118,987,545 2.96 Thailand 24,446,835 4.37 Malaysia 22,423,336 2.64 Malaysia 64,638,002 1.61 Canada 22,014,266 3.94 Poland 20,291,396 2.39 Indonesia 44,779,834 1.11 Italy 10,539,812 1.89 Portugal 19,184,264 2.26 Poland 29,880,512 0.74 India 9,900,221 1.77 Germany 15,206,796 1.79 France 16,139,075 0.40 Mexico 6,518,189 1.17 Italy 15,081,422 1.78 Romania 12,957,964 0.32 Czech Rep. 5,741,825 1.03 Other Asia, nes 12,601,795 1.48 Total Impor USA 4,017,757,634 97.29 Total Impor USA 558,794,390 90.80 Total Impor USA 849,205,873 92.99 *Indonesia #13
No 1 2 3 4 5 6 7 8 9 10
940340 (Kitchen wooden furniture) 940350 (Bed room wooden furniture) 940360 (Other wooden furniture) Negara Trade Value (US$) Share Negara Trade Value (US$) Share Negara Trade Value (US$) Share China 699,276,999 61.93 Viet Nam 1,318,783,656 42.87 China 2,516,100,230 50.08 Canada 199,876,229 17.70 China 414,380,074 13.47 Viet Nam 719,909,522 14.33 Italy 66,083,599 5.85 Malaysia 347,714,787 11.30 Canada 315,065,148 6.27 Viet Nam 39,096,519 3.46 Indonesia 200,945,255 6.53 Mexico 271,831,286 5.41 Germany 37,410,352 3.31 Canada 134,413,316 4.37 Indonesia 216,288,525 4.30 Mexico 27,333,685 2.42 Poland 125,036,712 4.06 Italy 173,250,176 3.45 Malaysia 10,508,801 0.93 Italy 110,359,425 3.59 India 128,381,421 2.56 Thailand 8,898,580 0.79 Brazil 88,435,058 2.87 Malaysia 113,167,108 2.25 India 6,606,401 0.59 Mexico 82,011,378 2.67 Poland 79,173,119 1.58 Indonesia 5,803,033 0.51 Lithuania 45,453,004 1.48 Thailand 60,777,048 1.21 Total Impor USA 1,129,107,948 97.50 Total Impor USA 3,076,507,265 93.21 Total Impor USA 5,024,361,341 91.43
EU and US Market • •
• • • •
EU and US market are dominated by China and Vietnam in all wooden furniture market segment Kitchen and office furniture imported less than other furniture segment, due to the customized features of this segment. The high value import from US and EU are from Seats, Bedroom and other Furniture which are dining room and outdoor furniture and small value of bath room furniture. In EU market Indonesia export is less than Malaysia and Thailand for seats segment (HS 940161) and in the bedroom segment is less than Malaysia (HS 940350). Both are highly potential market segment for Indonesian furniture export. In US market Malaysia export performance is better than Indonesia in seats and bedroom furniture segment. China dominated all segments in EU and US except for bedroom furniture in US market. This segment dominated by Vietnam due to the implementation of anti dumping regulation by US government to China export in 2004.
EU and US market • EU import value lower than US market but EU import are growing with domestic production sharp contraction during 2003 to 2012. Currently domestic furniture consumption from import only very small portion of total consumption (CEPS, 2014). Domestic production in EU and intra EU trade is much higher than EU imports. • Furniture company from EU countries are on their relocation process to Asia and East Europe. China and Vietnam is the main destination in search for low labor and material cost. China and Vietnam already have an integrated furniture industry. • Decreasing illegal log export from Indonesia would substantially decrease the availability of raw material in China and Vietnam, Indonesia could become relocation destination in search for raw material availability. connecting Indonesia to global value chain in furniture Industry • For the current export, FLEGT license is a marketing tools for EU and US market, Indonesia highly potential to enhance the market share in EU and US.
Global Value Chain Connectivity 940390 Negara Trade Value (US$) China 870,463,445 Canada 367,867,662 Mexico 279,875,184 Viet Nam 196,865,003 Italy 107,768,540 Other Asia, nes 102,033,636 Malaysia 63,414,303 Germany 58,392,243 Poland 55,196,150 Sweden 42,550,754 Total Impor USA 2,442,992,181 *Indonesia #15
Share 35.63 15.06 11.46 8.06 4.41 4.18 2.60 2.39 2.26 1.74 87.78
940390 Negara Trade Value (US$) China 487,629,674 Switzerland 109,905,741 Other Asia, nes 76,345,357 Turkey 55,534,248 USA 32,262,690 Malaysia 14,313,818 Russian Federation 13,879,313 Bosnia Herzegovina 13,183,194 Viet Nam 10,008,821 Ukraine 9,629,183 Total Impor EU28 891,133,104
Share 54.72 12.33 8.57 6.23 3.62 1.61 1.56 1.48 1.12 1.08 92.32
*Indonesia #12
• HS 940390 is wooden furniture parts segment. Data show Indonesia is not connected to global value chain in furniture production. Indonesia is exporting final product from small and medium enterprise in Central Java. • This product segment is growing fastest in furniture international trade, especially import from EU 28 countries. • Global value chain connectivity is very important factor for increasing Indonesian furniture export.
Estimated Model: Micro and Small Scale Enterprises
Estimated Model: Medium and Large Scale Enterprises
Estimated Model Interpretation • •
•
• •
The model estimated in natural logarithm scale, resulting the elasticity of dependent variable (revenue) on the percentage change of independent variables. The raw material coefficient is statistically significant in both model, this means that change in raw material value could significantly change the revenue of producers. The micro and small enterprises model the raw material coefficient is 0.43. One percentage increase in raw material value will increase revenue by 0.43 percent. The raw material (wood) share in production process usually fixed and the price could change. We can interpreted the change in price of raw material (increasing cost) could increase revenue only by 0.43. Assuming 70 percent of input is the raw material, it should 1 percent increased in raw material value will increase 0.7 percent of total revenue. SVLK implementation raise the raw material cost of furniture industry (wood prices). This is due to the lack of certified wood supply this is a temporary condition if the SVLK implementation improved continuously.
Production Cost and SVLK: Jepara Case • •
Only 14 SVLK certified Sawn Mill in Jepara, causing lack of supply of certified wood for the micro and small scale furniture producer higher input prices. Only a small number of SVLK Certified Sawn Mill: – Indicating a lot of non legal wood distributed in the market, the sawn wood producer will lost a substantial numbers of potential customer in they are SVLK certified, since the certified sawn mill can not receive non legal wood. – No supporting local regulation for the implementation of SVLK and/or no law enforcement for implementation of SVLK in sawn wood producers.
• • •
The price of certified wood are raising and unstable PT. PERHUTANI is the price setter of teak wood and could play as the price stabilizer. The scarcity of certified (sawn) wood supply in Jepara causing the price of certified wood is high the reason for challenge on SVLK implementation The small and medium scale enterprises who already exported to EU and US market implement SVLK and produce their own sawn wood there is no rejection from exporters to SVLK implementation
Production Cost and SVLK: Jepara Case • Importer (buyer) from Malaysia, Korea, India stay in Jepara and conducting “ijon” to “perajin (the)”. They buy (prepaid payment or ijon) with low price in Thursday from perajin. “Pengerajin” (small scalle furniture trader and usually only doing finishing process) do the same ijon practice to perajin. Pengerajin and Asian buyer exports furniture to Asian market. Exports process organized by container service provider company using special purposes company. This practice could reduce/eliminate if SVLK implementation is mandatory for all furniture export. • Mandatory SVLK could eliminate the above practice and as consequences the demand of lower quality product from local pengerajin and “Local Asian” buyer will contracted and so is total furniture market demand to perajin. • Need further assessment and analysis on the impact of lower demand to perajin by understanding and estimating the domestic market demand for Jepara furniture product. how big is the impact of change in demand to perajin revenue and welfare in Jepara region.
Conclusion • Economic Impact and The Importance of Furniture Industry Export – Timber product industry exports play an important role for Indonesian economy. The structure of output from this sector informed that the final demand from this sector is high, the multiplier of furniture Industry and other timber product is high. SVLK is needed for export document – Without a credible SVLK and SVLK as FLEGT license, in the worst case scenario, Indonesia could lose 60 percent of furniture export since there will be due diligence cost per export shipment. Indonesian export shipment usually in low volume and high frequency of shipment. This is a substantial additional cost for exporters and decreasing the price competitiveness in EU and US market. – Indonesian furniture industry is not connected in a value chain in domestic production process (base on the industry structure), and Indonesia also not connected to international global value chain in international furniture market (base on share of imports of furniture wooden parts from Indonesia). – SVLK as FLEGT license could trigger relocation from Vietnam and China to Indonesia. (base on relocation from China to Vietnam for Bedroom furniture, conditional on the support of EU in implementation of FLEGT license due diligence scheme)
Conclusion • SVLK and Production Cost – The implementation of SVLK causing the lack of certified (sawn) wood, causing the price to increase. This effects more to micro and small scale enterprises (perajin). – The limited availability of certified sawn wood is due to the lack of certified sawn mill in Jepara (and other location in Indonesia). – Base on estimation result, indicate that price increase would decrease profit margin of producer. – Base on the result of in depth interviews with the producer, in the case of increasing wood price the small and medium scale producer still have a good margin, but at the perajin level, the ijon system causing them to receive low margin and hence low wages. the furniture export in Jepara only benefited the rent seekers economic agent and not significantly improved the welfare of producer (perajin), this is the explanation of low income multiplier of furniture industry relative to the output multiplier of this industry from the input-output analysis.
Recommendation • Indonesian SVLK should concerned as the FLEGT license immediately. The FLEGT license potentially improve Indonesian furniture exports performance and production base relocation from China and Vietnam to Indonesia. • SVLK and V-legal document should be mandatory for furniture export since the implementation could reduce the “ijon” practice in production process. • It is necessary to conduct an assessment on the impact of lower demand from ijon system on the sustainability of micro scale (perajin) enterprises business.
Recommendation • The importance of stable and rational wood price and availability of certified (sawn) wood. – Certified sawn mill availability should be prioritized for continuously improved SVLK. The need for local and/or national regulation and law enforcement for the regulation Is it possible to address this issue by design a system that could increase the supply of certified sawn wood as soon as possible? – Perhutani can play an important role for wood price stabilization to support the certified wood supply in Jepara.
• SVLK is not only environmental issues but also international trade issues, the competition with Vietnam and China in EU and US furniture market and about losing market share, (the Indonesian traditional export market) is probably a politically more effective issues. • The indication of low welfare effect of furniture industry exports should be carefully considered for promoting SVLK.
