Based on data on the development of exports of forestry industry products as stated in the V-legal document from the Ministry of Environment and Forestry (KLHK), the export value of wood products totaled USD 6.05 billion in 2013 and slightly increased to USD 6.5 billion in 2014. In 2015, the export value increased significantly to USD 9.8 billion. In 2016, however, it dropped to USD 9.2 billion, before increasing again in 2017 to USD 10.9 billion. In 2018, the export value increased higher to USD 12.3 billion. As of November 18, 2019, the export value of Indonesian wood products already reached USD 10.2 billion. Due to the instability of the global economy, however, the price of Indonesian wood products decreased by 30% in 2019. Based on data from Asosiasi Pengusaha Hutan Indonesia (APHI), the export value of Indonesian wood products in 2019 also fell by some 4%, if compared to 2018.
Performance Trend – 2018
A benchmarking toward 4 wood processing and derivative products companies (among 4 public forestry companies listed at Indonesia Stock Exchange) shows that their sales trend in 2018 was increasing by 28%. It is because these all 4 companies could post an increase in the sales prices and volume of their products for the export market.
Performance Trend – 2019
A benchmarking toward 4 wood processing and derivative products companies (among 4 public forestry companies listed at Indonesia Stock Exchange) shows that in general, the sales trend in 2019 was decreasing by 15%. It is because nearly all of the companies (3 of the 4 companies) experienced a decrease in sales prices and volume of demand for their products in the export market. Meanwhile, one company was able to book an increase in sales trends by more than 100% by changing the focus on its marketing segmentation to Japan.
Performance Trend – 2020 Q1 (YoY)
A benchmarking toward 3 wood processing and derivative products companies (because QI/2020 data from 1 company among 4 public forestry companies listed at Indonesia Stock Exchange is not available) shows that the sales trend in QI/2020 was decreasing by 27%. The decrease is mostly related to the declining demand in the export market (one company decided to stop operation).
In addition, A benchmarking toward 4 wood processing and derivative products companies (among 4 public forestry companies listed at Indonesia Stock Exchange) shows a delay in account receivable (AR) for 1-60 days from the agreed schedule (30 days on average). In fact, the account payables (AP) could take longer than 180 days from the agreed schedule (30 -90 days on average).
Obstacle – 2020
- Declining demand in export destination countries during the pandemic
- Implementation of Lockdown policy in several major export destination countries
- According to APHI, the Covid-19 Pandemic has severely affected the forestry sector. It is because the major export destination countries for Indonesian wood-processed products, namely China, Japan, the United States, European Union, and Korea, had been badly affected by the pandemic.
- Based on data from APHI, the export of Indonesian wood-processed products per April 2020 was decreasing by 10%, followed by a declining performance of the suppliers of natural logs by 20%.
- Due to the Covid-19 pandemic, European countries could fall into a deeper economic recession in 2020, unlike previously estimated. The European Commission has predicted that economic recovery in 2021 will only run slower than expected.
Opportunity – 2020
- The relaxation policy by the government could be a basis for recovering the performance of the forestry sector after the Covid-19 pandemic.