Inside the executives' room of MHP, corporate officers use the latest technology, including satellite photos, to present the firm's profile. Outside are the newest models of Mercedes Benzes, waiting for their owners who work for the logging firm. Such are the fruits of wealth that running a forest concession has brought to MPH, underlining the bonanza that Indonesia reaps from its forest industry and forestry-related exports. The 300,000-hectare forest concession of MHP, part of the Barito Group owned by Indonesian timber baron Prajogo Pangestu, is located here in Muara Enim in southern Sumatra, an island northwest of the capital of Jakarta. Now, companies like MPH see even bigger potential returns in the forestry business, and are poised to step up production volumes.
Analysts say the export outlook is tempered somewhat by Asia's currency turmoil.
But industry experts say the APEC decision, while still in the preliminary stage, could provide a new opening for markets for Indonesian exports. For some time, the country's exports have had to deal with high import taxes and tariffs at their destinations. Forestry products rank third among Indonesia's foreign exchange earners, after textiles and gas and oil exports. In 1997, forestry products yielded some 6.25 million U.S. dollars of foreign exchange. But if timber tycoons see more earnings with the lifting of trade barriers, environmentalists worry it would hasten the pace of logging and further tax an environment already under pressure.