IFC-PENSA    
Rahajeng Pratiwi
Phone :+ (0361) 265 350
Email: rpratiwi@ifc.org    

Jakarta, May 15, 2006 —The International Finance Corporation’s Program for Eastern Indonesia SME Assistance (IFC-PENSA) has successfully assisted Inhutani II, the Kalimantan-based state-owned enterprise, in gaining membership in  the World Wildlife Fund’s Global Forest and Trade Network, marking an endorsement of Inhutani’s Acacia Mangium plantation on Pulau Laut, South Kalimantan, and a step forward for Indonesia’s furniture industry. Recognition by the Global Forest and Trade Network (GFTN) is a major milestone for plantation forestry in Indonesia, increasingly seen as a future source of eco-friendly timber supplies as the country’s natural forests continue to be lost through illegal logging and poor management. “This is great news for the forest sector and the furniture industry. The international market is skeptical about Indonesia’s ability to supply products made from sustainable timber. This proves that it can be done,” said Moray McLeish, manager of IFC-PENSA’s Sustainable Wood Program. “Indonesia needs more endorsements like this to retain market share and keep its furniture industry alive.” The 50,000 hectare plantation owned by PT Inhutani II is the first acacia plantation in Indonesia to join the GFTN. The network endorses responsible forestry enterprises and links them with international buyers seeking sustainable timber products. Nusa Hijau is the local name for the Indonesian arm of the GFTN. “We gladly welcome PT Inhutani II as the first acacia plantation to join Nusa Hijau. We hope that this cooperation will be beneficial for both parties and also encourage other producer companies to join and experience the advantages offered. Nusa Hijau provides the opportunity to work closely with an extensive network of market groups all over the world,” said Executive Director for WWF Indonesia Mubariq Ahmad. “We would also like to acknowledge IFC-PENSA for its determination to make this membership happen. It is time for all stakeholders to come together to support the positive efforts of companies that have a strong commitment to managing their forests in a responsible way,” he added. Increased supplies of sustainably grown timber such as acacia will also help create jobs in Indonesia’s ailing furniture industry, which is overdependent on teak wood and natural forest species. The quantity and quality of teak available in Indonesia are declining, and the species takes 25 years to reach a size suitable for use in furniture. Acacia grows across the country and can reach furniture size in 8–10 years. Because of its faster growing cycle, it is much cheaper to produce and is more price competitive than teak. However, acacia’svisual and physical properties are similar to teak, and the wood is an ideal substitute for making indoor furniture, in particular. “Through membership in GFTN, we hope to improve our management, overcome market barriers, and have a wider market for our products,” said Ir. Arifin Trihastoyo, managing director of PT Inhutani II. ”We will also be supporting the government in empowering small and medium businesses in furniture manufacturing.” The Inhutani II plantation has been preparing for membership for two years. With advice from IFC, several field appraisals have been completed and plans established to bring management up to international standards. The World Wildlife Fund requires that minimum standards be met before membership. Members must show a commitment to achieving Forest Stewardship Council sustainable forestry certification within five years. IFC has been assisting smaller furniture manufacturers in capitalizing on this opportunity through training them to dry acacia timber properly, stain the wood, and create products for the international market. Sponsored by IFC, ten manufacturers displayed their acacia furniture designs at the International Furniture Fair in Singapore in March; prominent among them was KWaS Furniture, an acacia furniture producer from Yogyakarta. “We believe that for the furniture industry to survive, we need a sustainable and eco-friendly timber supply in adequate quantity. By sourcing from sustainable timber plantations, we hope we have contributed a little to saving the environment and fulfilling our responsibility to our consumers,”  commented Robertus Agung, managing director of KWaS Furniture. Benoit Torrent of French furniture importers Antipode, buyers from KWaS, said, “Today, when we talk about Indonesia, it reminds us of the problem of deforestation. By proposing eco-friendly acacia to my client, I offer them an alternative to that. It has good physical characteristics and adequate density allowing us to produce good-quality furniture. In addition, the GFTN endorsement and the Chain of Custody system provide an excellent commercial argument.” In line with local manufacturers, furniture retailing giants such as IKEA are interested in buying from Inhutani II, further demonstrating international demand for new and sustainable wood species. The World Wildlife Fund and IFC both encourage international trade in timber products using wood from sustainable forests. The organizations work in partnership in several countries, assisting forests managers in sustainable production methods, in promoting the use of sustainable wood products to manufacturers, and in encouraging markets to demand and pay for sustainable products. About IFC-PENSA The mission of IFC (www.ifc.org) is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives. IFC-PENSA is IFC’s technical assistance facility supporting small and medium enterprise development in eastern Indonesia. IFC-PENSA’s Sustainable Wood Program creates business opportunities in the forestry/furniture sector by improving environmental management and encouraging sustainability, especially through sourcing good wood and making links to markets seeking environmentally friendly products. The IFC-PENSA facility has a five-year mandate and has been cofunded by IFC, the Australian, Canadian, Japanese, Netherlands, and Swiss governments, and the Asian Development Bank with funding commitments of almost $25 million. About WWF GFTN Nusa Hijau Nusa Hijau—the Indonesia Forest and Trade Network— is part of the Global Forest and Trade Network, the World Wildlife Fund’s worldwide partnership among leading nongovernmental organizations, companies, and communities aimed at eliminating illegal logging and improving the management of valuable and threatened forests. By facilitating market links between companies committed to achieving and supporting responsible forestry, the network creates market conditions that help conserve forests and biodiversity, while providing economic and social benefits for the businesses and people who depend on them. Working in parallel with 30 other country Forest and Trade Networks that represent nearly 300 companies trading in $18.1 billion dollars of wood products per year, Nusa Hijau gives its members market access to a vast global network of similarly minded businesses. In addition, member companies can enjoy benefits such as information and training on certification, support for small-scale and community forest enterprises, policy advocacy with governments, and local and global publicity.