Indonesia is Ready to Increase Wood Product Exports to the US

Indonesia's wood product exports were recorded at US$14.51 billion.

The government and Indonesian business players are ready to work together to increase exports of wood products and their derivatives to the United States (US) which are considered still wide open.

The General Director of America and the Ministry of Foreign Affairs of Europe, Umar Hadi, in his statement here on Saturday, said that various challenges would be solved together so that the market share of Indonesian wood products in the US could continue to increase.

“We must be optimistic about expanding the market in the United States because there is ample room for further growth and expansion,” he said at a Webinar entitled Unlocking Wood Product Business Opportunities in the US Market: Why Indonesian Wood Products are Your Ideal Choice, at the Indonesian Embassy in Washington DC on February 16, 2023.

Meanwhile, the Indonesian Ambassador of the US, Rosan P. Roeslani, revealed that Indonesian wood product producers must seriously work on the US market, because 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, demand for furniture products is projected to continue to increase in line with changing tastes in products that are in line with environmentally friendly lifestyles,” he said.

According to the General Director of Sustainable Forest Management of the Ministry of Environment and Forestry (KLHK), Indonesia has added indicators relating to sustainability aspects so that LSVS is now transformed into a Legality and Sustainability Verification System (LSVS) which guarantees the legality as well as the sustainability of wood products exported to foreign countries.

Based on LSVS, Indonesia’s wood product exports were recorded at 14.51 billion US dollars, the highest in history and up 7 percent year on year (yoy) where in 2021 exports were recorded at 13.5 billion US dollars, the US is the second largest export destination behind China with a value of US$2.23 billion. Products of interest to the US consumers are wooden furniture, plywood (wood panels), and paper.

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 making caravans.

Chairman of the Indonesian Forestry Community Communication Forum (FKMPI) Indroyono Soesilo said Indonesia has the opportunity to continue to increase exports.

One of the reasons is that the US imposes high import duties on products from China, which is the largest exporter of wood products to the country.

In addition, Indonesia also receives Generalized System of Preferences (GSP) facilities from the US so that some wood products are duty-free.

“If our market share can be increased by 100 percent from the current around two billion US dollars, it will only be around 4 billion US dollars. It is comparably small to the potential of 63 billion US dollars,” said Indroyono who is also Chairman of the Indonesian Forest Entrepreneurs Association (IFEA).

He said intensive 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 exhibition center in the US as proposed by HIMKI and prepare a warehouse.

Chairman of the Presidium of the Indonesian Furniture and Handicraft Industry Association HIMKI Abdul Sobur, stated that the US market needs to be taken 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,” he said at the event attended by 100 participants consisting of wood industry entrepreneurs both in Indonesia and in various regions in the United States.

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