Wood processing industry for export markets began to be developed by the company in Indonesia in 1986. This is in accordance with government policy that prohibits the export of logs and sawn timber export permit only and other processed wood, such as "furniture, laminating board, wood panels" and so forth. The development of the furniture industry can be seen from the export value of finished goods timber in 1986 amounted to U.S. $ 99 million and in each following year both to U.S. $ 527 million in 1997.
Overseas demand for household furniture and goods of wood components, and increased fairly steadily from year to year. In periods of economic crisis that hit Indonesia today, the increase in exports of goods with high added value is one step to overcome the crisis. Wood processing industry is labor intensive to create job opportunities and may also hold the purchasing power (consumption) in areas where export company is located. Wood processing industry sub-sectors that produce wooden furniture and components for export markets have a very good business prospects, because the raw materials, labor and most of the other production factors of domestic origin. Almost the entire production of export goods from the timber industry is sent to the overseas buyers of pelabuan-ports in major cities of the island of Java, from Jakarta, Cirebon, Semarang and Surabaya. The main target of the domestic market of processed wood products are households and firms and institutions on the island of Java.
Most of the companies engaged in wood processing sub-sector is small and medium scale enterprises. Approximately 80% of these companies are located in the northern part of Java island, because labor is available with a large amount and cost of adequate wages. Because of limited production capacity and market opportunities is greater than its production capacity, manufacturers of finished goods processed wood scale UM / UB which exports its production, has long been working with wood pengarajin groups.
Since the government launched a partnership program between medium or large business with small businesses, the opportunity to create an integrated partnership project between the two parties would be the focus of government agencies and the business world wood processing industry .. A constraint, the timber industry in Indonesia still relies on imported machines from various countries, especially Japan, Taiwan, China, Malaysia, Germany, and Italy, because the wood processing machinery industry in Indonesia is still weak. Thus, Indonesia should manage their forests well with the principles of environmental sustainability and continuity, given the country's export destinations such as the European Union and the United States, consumers really pay attention to sustainable forest management.
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