/High-end of Wood Products In Indonesia

High-end of Wood Products In Indonesia

Indonesia imported a total of $107 million worth of wood products. Over a third of the imports were from the United States. Indonesia exported more than $1 billion in furniture ($742 million), wooden floors ($201 million) and musical instruments ($100 million).

After U.S. exports of wood products to Indonesia peaked at $47.5 million, sales fell off to $39.4 million. Because of a strong re-export trend, imports of woods were largely unaffected by Southeast Asian economic crisis that buffeted other U.S. exports. However, the furniture export industry in Indonesia was impacted by the global slowdown, as its biggest customers are the United States, Europe, Japan and Australia.

Accordingly, U.S. wood product exports to Indonesia dropped; however, a rebound in U.S. sales is expected as the economic recovery comes for primary customers.

The best selling U.S. wood entering the Indonesian market was hardwood logs, valued at $14.2 million, This same year, U.S. hardwood lumber ($8.4 million) and hardwood veneer ($3.3 million) exports lost the most ground. Best selling veneers include oak, maple and softwood pine.

Other U.S. high-grade products enter Indonesia via European countries, adding maple, cherry, walnut and ash to the mix. European countries are able to offer high quality, precision thickness with competitive prices.

Two major importer/distributor firms import U.S. wood products for Indonesia’s furniture manufacturers. Most U.S. products enter via Java Island, which has the infrastructure to handle the imports. Distribution to other islands has proven less reliable.

A major flooring company imports saw lumber directly from the United States, mostly white oak, beech, red oak and cherry but also some maple, walnut, pecan and pine. Several smaller flooring companies import mostly oak logs.

U.S. maple is used in necks of guitars made locally. Piano manufacturers use U.S. cherry. U.S. birch plywood is turned into drum parts.

Competition Is Worldwide

As with other markets, price and credit terms can be the determining factors for Indonesian wood product importers. Developing personal relationships with Indonesian importers and promoting products are also important in making sales.

U.S. exporters usually require 30-day cash terms upon delivery, compared to more lenient terms from other countries. They also require a minimum order large enough to fill a 40-foot container. European countries often consolidate products for Indonesian importers.

China provides the most competition for U.S. hardwood lumber products. The United States is third in supplying hardwood veneer products, after Japan and China.

As technology for veneer production develops, local industries do expect to import more U.S. solid wood directly and process their own veneers, a development that may limit U.S. wood products imported through Europe.

Other products with opportunity in this market include medium-density fiberboard and surplus cuts from U.S. processing.

This article was prepared by a contractor for the FAS Agricultural Trade Office in Jakarta, Indonesia.

To find it on the Web start at www.fas.usda.gov, select Attache Reports and follow the prompts.