“We have good wood security” is a refreshing quote from an Indonesian flooring producer, committed to sustainable and legal wood supply, and is a message that the world needs to hear if the country is to take its rightful place in the global market. That’s important, given the long term increasing demand for flooring developing within the Asian domestic markets, especially in China and within Indonesia itself. SF Resources runs a plant of 2,500 people in Java and has recently been appointed as agent within Asia for Perum Perhutani, by far the largest plantation operator on the islands of Java and Madura. Michael Buckley recently met the President Director of Perhutani in Jakarta and visited operations in Java.
SF Resources represents the life-long work of its Chairman Goh Ah Tee. “Discover beauty, discover wood, discover us” is their slogan, subtitled with the offer of a ‘legal and reliable source of quality hardwood flooring and decking, stairways and rails’. The reference to decking reflects the company’s past strength in the Australian market, but its future clearly rests with its growing business of flooring in other markets. The claim of being legal and reliable reflects the company’s FSC CoC certification by The Rainforest Alliance, its SVLK (TLAS) export licence by the government, its Legal Verification System by CertiSource, as well as certification by Singapore’s Green Label and the CE Marking for EU standards.
The company is also a member of the National Wood Flooring Association of the USA. SF Resources Group headquartered in Singapore, which began in the 1970s as a timber trading enterprise by three Singaporeans, now operates in Jombang, Indonesia as PT Seng Fong Moulding Perkasa.
In 2012 the group became the appointed agent of the state-owned forest enterprise Perhutani, with whom Mr Goh has maintained a long and close relationship. The significance of this move is rooted in Goh’s determination to rely upon and develop markets solely for Indonesian hardwood species in all its products. The flooring plant does not use imported species and the company is confident in its ability to satisfy international demands for legal and sustainable hardwood products. It actively denounces the destruction of the environment and seeks recognition for its corporate governance and social responsibility. Most importantly, Perhutani, as a major employer among the local community with 24,000 employees, also seeks to improve and satisfy the social criteria required to maintain its forest certification.
It is entirely coincidental that during the writing of this report, on a company aiming to grow its business in the domestic Chinese market, the Britishbased Environmental Investigation Agency (EIA) published its report “An appetite for destruction” – criticising Chinese wood product sourcing. SF Resources offers a solution to that emerging problem.
Hardwood material is not only sourced from Perhutani’s plantations but also from many local Javanese private and community plantations as well as other parts of Indonesia. Merbau logs for example, verified legal by CertiSource, are shipped from Indonesian Papua to Java for conversion to flooring and decking. However for the longer term, SF Resources is trialling new, more sustainable and faster growing species such as Sonokeling, Mahoni and Acacia and is now majoring on plantation Teak.
The Javanese plantation Teak differs slightly in character from that naturally grown in Burma and Thailand although they are identical species. Java has the ideal climate with a distinct dry season that Teak demands and much of the soil is suitable for it. The colour of Javanese grown Teak, being somewhat darker, also differs in grain pattern as it can do with many other species depending on their growing localities. But all Teak (Tectona grandis) with its natural characteristics is highly suitable for fl ooring, decking, furniture and a range of other specialised uses.
Perhutani has 24,000 employees and manages 2.4 million ha of forest areas in Java and Madura under government controlled principles of Sustainable Forest Management and Government Regulation #72 implemented in 2010. It has 57 Forest Management Units (FMU) with Teak as the major species, accounting for 50% of revenue but, over the last few years, production of other species has exceeded it.
The plantations also produce by-products such as gum rosin, turpentine, non timber forest products such as mineral water, honey bee and ecotourism attraction at 122 destinations. It is clear that Perhutani, established in 1897, now understands exactly what it has to do for the future. Its published mission statement explains that Perhutani holds a very important role in guaranteeing the existence of forest areas to support the capacity of communities’ social environment and economy: “In line with the mandate, Perhutani is required to be a company with healthy forest resources, operational performance, and financial performance. Efforts to maintain the continuous balance of forest resources’ function are constantly undertaken, be it from the ecological, social, and economic aspects. Perhutani holds an optimistic view for a bright future based on the vastness of the existing natural resources, its strong and visionary management, and its consistency in fulfilling international standards to achieve bright business prospects in the future. Perhutani is fully capable of reaching its Vision, Missions, and Values to reach the interests of the State, the shareholders, and the company itself in a sustainable manner focusing on performance strategy, performance effectively and efficiency….” (www.perumperhutani.com)
Recently appointed President Director Bambang Sukmananto emphasises the need for transparency, and compliance for legislation such as EUTR in all Perhutani’s dealings. He anticipates a Voluntary Partnership Agreement (VPA) being signed soon with the EU on which the government’s SVLK export licence system really depends. The President Director is insistent that the company operates without government interference but does set and monitor resource regulations. However of all issues that concern him personally and Perhutani as a responsible forest operator it is the social issues that exist in overcrowded Java that demand most attention. More than 60% of all Indonesians live in Java, an area the same size as New York State, which accounts for only 6% of the total land area of Indonesia! Population density is over 2,000 per sq mile or five times higher than NY State. Perhutani lost its FSC certification some years ago due to the social conflicts created between needs of forest plantations and other land uses such as farming and vegetable production by local communities. In recent years Perhutani has made strides to resolve such conflicts and Mr Sukmananto seems determined to see these to fruition. So far five FMUs have been re-certified by FSC with two more expected to be confirmed shortly.
PT Seng Fong’s integrated flooring facility in Java, commissioned in 1990, includes a log yard, sawmill, kiln drying, moulding and laminating machines, two Finished Products warehouses, eight sawn timber warehouses and a shipping capacity of about 120 containers per month on an 11 ha site. Average monthly production varies between 1,600m3 to 2,400m3 per month of flooring and decking. The plant operates a two-shift six day week and is considering a third shift to be introduced shortly.
Solid flooring and decking are major items as well as 2-layer and 3-layer 15mm and 20mm engineered flooring – all in 100% Indonesian hardwood throughout. Sizes range from 19mm x 90mm to 19mm x 140mm for solid decking and 90mm to 120mm lengths for solid fl ooring in 15mm and 18mm thickness. Engineered flooring is available up to 185mm maximum length and is produced mainly T&G 2 or 4-side, although recently an L2C ‘Clic’ locking system has been added as an additional option. Profiles are numerous with over 2,000 cutters in stock. The company projects an increase in engineered flooring although solid still represents 50% of production. Finishing is UV and UV scratch resistant oil, supplied by Klumpp. In addition to quarter and fl at sawn Teak, faces include local species Linngua (Pterocarpus macrocarpus), Komea (Manilkara Kauki), Mahoni (Swietania spp), Acacia (Acacia Mangium), Merbau (Intsia palembanica), Torem (Manilkara kanosiensis) and Sonokeling (Dalbergia latifolia).
Project references can be seen locally at Bukit Golf in Surabaya, at the Maya Ubud Hotel in Bali and the Hotel Sudirman in Jakarta as well as installations in forty overseas markets. Currently the Australian and Chinese markets are running neck and neck as number one destination and the EU third. But China is seen as a real growth market and expected to take priority. “For the future,” says Goh Ah Tee, “we intend to fly the flag for Indonesian wood in a range of sustainable and legally grown species, secure in the knowledge that we have good wood security”.