Market overview of the Indonesia paper industry, including four application types producers and supply & demand projection.

1. THE INDONESIA PULP AND PAPER INDUSTRY, 2020
Market overview
Hans Mohammad & Bright Consulting
1
In 2020, Indonesia’s paper production reached 13.3 million tons, a decrease of 2% or 0.3
million tons from the previous year due to consumption slowdown notably in writing and
printing, attributed to the on-going Covid-19 pandemic. Export is approximately 24.7% with
other Asian countries such as Malaysia, Japan and South Korea as the majority export
destination. According to the Food and Agriculture Organisation (FAO) 2019 report,
Indonesia’s paper consumption is considered low per capita at 29 kg, compared to Malaysia at
95 kg, Singapore at 70 kg and the average ASEAN countries at 35 kg.
Based on applications, packaging paper and paperboard accounted for 49% of total
production, while writing and printing paper, hygiene paper, and specialty & security paper
accounted for 41%, 9% and 1% respectively.
Packaging and Paperboard
In 2020, the production of packaging paper and paperboard reached 6.6 million tons with 8.3
million tons capacity from 38 paper producers operating in Indonesia. The production
reflected a growth of 1.5% from the previous year, higher than the total industry growth
average of -2%. The types of packaging paper most commonly produced are carton box,
corrugating medium liner, Kraft, sack and wrapping paper. The growth for packaging and
paperboard paper is expected to be positive along with the uptrend of e-commerce in
Indonesia.
Writing and Printing Paper
This type of application suffered a negative growth of 7% from last year, with a total
production of 5.2 million tons in 2020 and a capacity of 6.4 million tons. The negative growth
is attributed to the decreasing trend of reading offline newspapers and the current Covid-19
pandemic which forces workers and students to do most activities at home, resulting in
reduced usage of writing and printing paper. For this year, the Association predicted writing
and printing paper to have a stagnant growth of 0%.
Hygiene Paper
Similar to packaging and paperboard, in 2020, hygiene paper enjoyed growth. The production
stood at 1.1 million tons from 14 producers, an increase of 1.4% from 1.3 million tons in
2019. The growth came from the rise of tissue consumption due to the change in people’s
behaviour which became more aware of hygiene since the pandemic. Instead of using fabric
base material to clean or wipe hands, consumers now use a paper-based material that can be
immediately disposed of after usage. The growth is expected to continue this year due to the
aforementioned reasons.
Security and Special Paper
Like writing and printing paper, security and speciality paper experienced negative growth in
2020, from 0.18 million tons to 0.17 which translates to a -5.4% from the previous year. The
change in consumers' habit of doing more online activities and cashless payments have
contributed to the negative growth. E-payment, E-wallet and E-certificates have gained
popularity and have started to replace the need for paper-based documents. This paper type
application is predicted to have stagnant growth in 2021 and in the coming years.

2. 2
Indonesia Paper Supply & Demand 2014 – 2023
Various sources
Indonesia's paper market is considered an oligopoly with only a few players dominating the
market. Based on installed capacity, the largest producers in the market are the Asian Pulp &
Paper Group (APP Group) followed by Fajar Surya Wisesa, APRIL Group and PT Pabrik
Kertas Indonesia. Graph 2 outlines the market share of key players in the industry.
Key Players in the Paper Industry
Various sources
Indonesia's paper market is considered an oligopoly with only a few players dominating the
market. Based on installed capacity, the largest producers in the market are the Asian Pulp &
Paper Group (APP Group) followed by Fajar Surya Wisesa, APRIL Group and PT Pabrik
Kertas Indonesia. Graph 2 outlines the market share of key players in the industry.
A total of 66 paper producers currently operate in Indonesia with a total installed capacity of
17.5 million tons in 2019. Mills are mainly located in Java and Sumatra Island to be closer to
main raw material locations. Another reason for placing mills in these two islands is the more
established infrastructures such as road and seaport present there. Most paper producers have

3. 3
more than one paper business line. Hence, the breakdown by applications will show a bigger
number of producers shown in the Table 1 below.
Number of Paper Producers by Product Applications
Paper Applications
Number of
Companies
Paper Applications
Number of
Companies
Writing and Printing paper 21 Hygiene Paper 14
Packaging Paper 38 Security & Special Paper 15
TOTAL 88
Various sources
Conclusion
With low paper consumption per capita, Indonesia still has plenty of room to grow. From the
four application types, packaging and hygiene papers are predicted to enjoy robust growth due
to changes in consumers' lifestyle. The effort to reduce the use of plastic material for
packaging has made paper packaging gained popularity, which increases the application’s
production.