The Bamboo and Rattan Sectors in Asia: an Analysis of ... - INBAR

aw material, trading of raw material and manufacturing of finished products are all
merged into one enterprise, mostly belonging to medium or large manufacturers.
These larger firms expressed no concern about the availability of raw material. They
feel that there is plenty available in the wild, and that they can access it if they are
willing to pay a price. However, there is a frequently voiced complaint about the lack
of access to uniform quality raw material. Bundles of rattan purchased contain a
range of sizes, and it is difficult to get preferred sizes. Medium and large canes often
end up being cored because it does not suit particular designs as main frame material.
Government policies directed at the rattan sector have had strong and highly
differentiated impacts throughout Indonesia. The rattan processing industry in East
Java has been the main beneficiary of the various policy interventions. The restrictions
on the export of raw and semi-processed rattan from the country effectively subsidized
raw material for the processing industry that was already concentrated in East Java.
Investment credits and other assistance were also offered to help start up rattan
manufacturing enterprises.
Manufacturers were encouraged to export by a 1987 Ministry of Trade Decree
that simplified export requirements and allowed any firm or individual to export. As
a result most of the 52 members of ASMINDO in Surabaya are rattan finished products
manufacturers as well as exporters. Similarly, in Cirebon, of the 76-92 units that
export, 30 are also manufacturers.
The rattan processing industry grew at the rate of about 8% from 1988 to 1993
(Anonymous 1996). This small figure masks much larger changes in different locations
in the country. During this period when major policy changes took effect, Java was
the only region to experience positive growth of 30%. Each of the other main regions
saw a decline: Sumatra - 5%, Sulawesi - 122.7% and Kalimantan - 46.6% (Anonymous
1996).
The type of product has also shifted dramatically from raw and semi-processed
rattan to finished products (furniture, handicrafts, lampit), with much better access to
the higher-end of the market. However, some furniture manufacturers confessed that
they find it difficult to compete with Philippine manufacturers on quality, and with
Chinese manufacturers on price (though both these countries use large amounts of
smuggled Indonesian rattan at much higher prices than in Indonesia).
The concentration of furniture manufacturers in East Java has naturally given
the access to skilled labor, transportation infrastructure, communications and all the
amenities of urban life.
Constraints and opportunities
Rattan cultivation within the timber plantations in Java appears to offer many
potential benefits. It is a source of employment for local people (and therefore helps
satisfy one of the official objectives of Perum Perhutani), it increases revenues from
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