Pulp and Paper Industries in Japan and Indonesia
Total Page:16
File Type:pdf, Size:1020Kb
Visiting Research Fellow Monograph Series This series aim at disseminating the results of research done by Visiting Research Fellows at the Institute of Developing Economies. However, no part of this paper may be quoted without the permission of the author, since some of the results may be preliminary. Further, the findings, interpretations and conclusions expressed in this paper are entirely those of the author(s). Paper does not imply endorsement by the Institute of Developing Economies of any of the facts, figures, and views expressed. The Institute of Developing Economies does not guarantee the accuracy of the data included in this paper and accepts no responsibility whatsoever for any consequence of their use. ACKNOWLEDGEMENTS This research was made possible through valuable funding from IDE-JETRO. I am extremely grateful to IDE-JETRO for allowing me to carry out this research in the period August 2006-February 2007. This report has benefited substantially from inputs and insights from certain individuals and Research Institute Library Officers (IDE, OJI Museum, and FFPRI). I would like to thank Prof. FUJITA Masahisa and Dr. YOSHIDA Mikimasa, as President and Executive Vice President of the Institute of Developing Economies (IDE-JETRO), Dr. SATO Yuri (as host scientist), Prof. NAGATA Shin, Prof. INOUE Makoto (The University of Tokyo), Dr. TACHIBANA Satoshi and Dr. ZHANG Yufu (Forestry and Forest Products Research Institute/FFPRI), for their discussion and critical comments upon this paper. I am also grateful to and extend many thanks to all researchers from the Southeast Asian Studies Group 1 (Area Studies Center) and all the kind colleagues in the IDE institute such as SATO Hiroshi, ISHIDA Masami, KOJIMA Michikazu, TERAU Tadayoshi, MATSUI Kazuhisa, IMAI Ken, YOSHIDA Eiichi, HORII Nobohiro AOKI Maki, KITANO Koichi, OKADA Masahiro (Research-Editorial Office), TAKAHASHI Mune, TAKAHASHI Matsushi, HAMADA Miki, HIGASHIKATA Takayuki, Michida MAKINO Kumiko, MOCHIZUKI Katsuya, TAKAHASHI Kazushi and others too numerous to mention. Finally my thanks to Director of the International Exchange Division SANADA, HARADA Naomi and HOKINOUE Kayo (Deputy Director), Ms KANENARI Yoko and to Ms. EZAKI Raimi and Yoshinori of the Research Management Division, and YOKOYAMA Mitsunori (Director Budget and Planning) for their generous support. TABLE OF CONTENTS Chapter I 1.1. Introduction ················································································································ 1 1.2. Background ················································································································ 3 1.3. The Scope, Goals and Objectives ··············································································· 5 1.4. Methodology ·············································································································· 6 1.5. The Expected Results ································································································· 9 1.6. Method of Research ··································································································· 9 PART ONE: PULP AND PAPER IN JAPAN Chapter II JAPANESE INDUSTRIALIZATION Introduction ·················································································································· 10 2.1. The Role of Government ························································································ 10 2.2. Government and the Private Sector ········································································ 12 Chapter III DEVELOPMENT OF PULP AND PAPER INDUSTRY Introduction ·················································································································· 15 3.1. The Pioneer of Pulp and Paper ··············································································· 15 3.2. Raw Materials (Wood Trade) ················································································· 19 3.3. Wood Chips ·········································································································· 22 3.4. The Significance of the Pulp and Paper Industry ·················································· 23 3.5. A Brief History of Paper ························································································· 25 3.6. Impact on Environmental Conditions ····································································· 28 Chapter IV PROFILES OF TWO PULP AND PAPER COMPANIES Introduction ·················································································································· 30 4.1. The Oji Company ··································································································· 30 4.1.1. History of the Oji Company’s Development ·············································· 30 4.1.2. Wood Raw Material Policy ········································································ 34 4.1.3. Research and Development (R&D) ··························································· 37 4.1.4. Corporate Code of Conduct ······································································· 37 4.2. Nippon Paper Group ····························································································· 38 4.2.1. History of Nippon Paper Company’s Development ··································· 39 4.2.2. Wood Raw Material ··················································································· 43 4.2.3. Rrodoucts ···································································································· 43 -i- 4.2.4. Research and Development (R&D) ····························································· 45 4.2.5. Nippon Paper Group Makes an Acquisition in Hokuetsu Paper Mill ··········· 45 Chapter V ENVIRONMENTAL PROBLEMS Introduction ·················································································································· 48 5.1. High-Level Economic Development ···································································· 48 5.2. Pollution Issues ···································································································· 49 5.2.1. Edogawa River Pollution ··········································································· 51 5.2.2. Tagonoura Harbor Pollution ······································································ 54 5.3. Stakeholders’ Reaction Concerning Environmental Destruction ··························· 56 5.3.1. Analyst’s Comment ····················································································· 56 5.3.2. The Role of Non-Governmental Actors ······················································· 57 5.3.3. The Response from Central and Local Government ··································· 58 Finding Results ············································································································· 59 PART TWO: PULP AND PAPER INDUSTRIES IN INDONESIA Chapter VI DEVELOPMENT OF THE PULP AND PAPER INDUSTRY Introduction ·················································································································· 61 6.1. Background ············································································································ 61 6.2. Development of Pulp and Paper ············································································· 62 6.3. Comparative Advantages over Other Countries ······················································ 70 6.4. Raw Materials ········································································································ 70 6.5. The Role of Government ························································································ 73 6.5.1. Investment ··································································································· 73 6.5.2. Regulation for PMA Investments ································································· 75 6.5.3. Facilities for Investment ·············································································· 75 Chapter VII THE ROLE OF PRIVATE COMPANIES Introduction ·················································································································· 77 7.1. APP (Asia Pulp and Paper) ····················································································· 77 7.1.1. Development of APP ················································································· 78 7.1.2. Wood Raw Material ····················································································· 81 7.1.3. Research and Development ········································································· 82 7.1.4. Professional Management ············································································ 84 7.1.5. Community Development ············································································ 84 7.2. APRIL ·················································································································· 86 7.2.1. Development of APRIL ··············································································· 86 -ii- 7.2.2. Raw Material ······························································································· 89 7.2.3. Research and Development ········································································· 91 7.2.4. Professional Management ············································································ 92 Chapter