Chemical wood pulp market in Indonesia

Earlier Report Observations

The chemical wood pulp market in Indonesia from 2018 to 2023 was characterized by robust production growth, rising from 7.9 million tons to 9.8 million tons. This expansion was initially driven by the commissioning of major new facilities, such as Pabrik Kertas Tjiwi Kimia's new plant with a 2.5 million-ton capacity in 2018 and the entry of PT Fajar Surya Wisesa with acquired paper mill assets, which collectively increased the industry's base capacity. Concurrently, the domestic market volume contracted from 4.9 million tons to 4.1 million tons, as a growing share of output was directed toward exports, which increased by over 50% over the period.

The industry demonstrated resilience during global challenges. Despite the worldwide economic and energy crises in 2020, production grew as companies focused on digitalization and sustainable raw material sourcing to maintain competitiveness. The upward trend continued, supported by rising global prices for kraft pulp in 2021, which improved margins for major producers. Furthermore, increased deforestation linked to new wood fiber plantation development for pulp mills helped secure the necessary feedstock for this output growth.

By 2022, the market was further shaped by the launch of a new 1.7 million-ton per year semi-chemical pulp plant and significant geopolitical shifts. The Russia-Ukraine conflict led to 'conflict wood' labeling for Russian and Belarusian products, creating new export opportunities for Indonesian pulp in the EU and UK markets. This external demand, alongside existing trade agreements like the Indonesia-Chile FTA, solidified the industry's export orientation. The need for technological modernization and adherence to sustainability standards like FSC emerged as key themes for maintaining this global position.

Production chemical wood pulp in Indonesia

In kind, 2018-2021, K t

From 2018 to 2021, Indonesia held the sixth position globally in chemical wood pulp production.

Top producers of chemical wood pulp, 2018-2021

World map of production of chemical wood pulp, 2018-2021

Indonesia's chemical wood pulp production grew for the second year in a row. In 2021, the country produced 8 598 K t, maintaining stability compared to the previous year. Over the 2018-2021 period, production rose by 9.5%, with an average annual growth rate of 3.1%. The lowest output was recorded in 2019 at 7 807 K t, which saw a slight decline of 0.6%. The most significant increase occurred in 2020, with a jump of 10.1%.

Annual dynamics of production in Indonesia in kind, 2018-2021, K t

In value, 2018-2021, M $ US

Following two years of decline, Indonesia's chemical wood pulp production value rebounded. In 2021, the output was valued at 4 633 M $ US, representing a substantial year-over-year increase of 23.0%. However, over the 2018-2021 span, production value decreased by 4.8%, translating to an average annual decline of 1.6%. The lowest value was in 2020 at 3 767 M $ US, which experienced a sharp drop of 15.8%.

Annual dynamics of production in Indonesia in value, 2018-2021, M $ US

Exports chemical wood pulp from Indonesia

Exports in kind, K t

Indonesia's chemical wood pulp exports expanded for the third consecutive year. In 2021, the country exported 6 013 K t, up 4.5% from the previous year. From 2018 to 2021, exports surged by 42.3%, with an average annual growth rate of 12.5%.

Annual dynamics of product's exports from Indonesia in kind, 2018-2021, K t

Between 2018 and 2021, China dominated Indonesia's chemical wood pulp exports in volume, accounting for 75.0% of the total. The remaining volume was distributed among numerous countries, each with smaller individual shares.

Structure of product's exports in kind by countries, 2018-2021

World map of product's exports from Indonesia in kind, 2018-2021

Exports in value, M $ US

In 2021, Indonesia exported chemical wood pulp valued at 3 241 M $ US, marking a sharp increase of 28.5% compared to 2020. Over the 2018-2021 period, export value grew by 23.7%, with an average annual rate of 7.3%. The lowest value was recorded in 2020 at 2 523 M $ US, which saw a decline of 9.1%.

Annual dynamics of product's exports from Indonesia in value, 2018-2021, M $ US

From 2018 to 2021, China consistently represented 76.5% of Indonesia's chemical wood pulp exports in value terms, highlighting a high reliance on this market. The remainder was spread across other countries.

Structure of product's exports in value by countries, 2018-2021

World map of product's exports from Indonesia in value, 2018-2021

Imports chemical wood pulp to Indonesia

Imports in kind, K t

After two years of decline, Indonesia's chemical wood pulp imports in volume increased. In 2021, imports reached 1 154 K t, up 1.9% from the previous year. Over the 2018-2021 period, import volume fell by 11.8%, with an average annual decrease of 4.1%. The lowest volume was in 2020 at 1 132 K t, which experienced a drop of 10.5%.

Annual dynamics of product's imports to Indonesia in kind, 2018-2021, K t

Throughout 2018-2021, the United States, Canada, and South Africa were the leading sources for Indonesia's chemical wood pulp imports in volume. The United States accounted for 37.0%, Canada for 26.5%, and South Africa for 8.2%, together making up 71.7% of total imports.

Structure of product's imports in kind by countries, 2018-2021

World map of product's imports to Indonesia in kind, 2018-2021

Imports in value, M $ US

Following two years of decline, Indonesia's chemical wood pulp import value rose. In 2021, imports amounted to 945 M $ US, showing a steep increase of 34.1% from the previous year. However, between 2018 and 2021, import value decreased by 16%, equating to an average annual decline of 5.7%. The lowest value was in 2020 at 704 M $ US, which saw a significant drop of 28.0%.

Annual dynamics of product's imports to Indonesia in value, 2018-2021, M $ US

From 2018 to 2021, the United States, Canada, and South Africa were the primary markets for Indonesia's chemical wood pulp imports in value terms. The United States held 37.0%, Canada 27.9%, and South Africa 8.6%, collectively accounting for 73.4% of total import value.

Structure of product's imports in value by countries, 2018-2021

World map of product's imports to Indonesia in value, 2018-2021