AN ASSIGNMENT ON EXPORT IN PERUM PERHUTANI KBM INK UNIT II EAST JAVA (part 3)

CHAPTER III


REPORT ON THE PROGRAM EXECUTION

3. 1 COMPANY PROFILE

3.1.1 Brief History

Perum Perhutani one of BUMN under supervisor of forestry minister and BUMN department, build on PP No. 15 year 1972 and renewed with PP No.2 year 1978. In 1999 it had been changed with PP No.36 year 1986 and PP No.53 year 1999. In 2001 Perum Perhutani had been changed become PT (Perseroan Terbatas) with PP No.14 year 2001. But in the year 2003 it turned back become Perum Perhutani.
Perum Perhutani has many branches spread in Indonesian land. One of it is Perum Perhutani Unit II KBM INK (Kelompok Bisnis Mandiri Industri Non Kayu) Jawa Timur which has work area in all state forest, spread in all regency in Jawa Timur, Madura, and some in Jawa tengah (Blora Regency). The forest area of Perum Perhutani Unit II Jawa Timur includes conservative nature area PKA ( Perlindungan Konservasi Alam) on wide 1.358.795,8 Ha or 29,3% of total forest in Jawa Timur province. The rest area should be protected because it has reached in the minimal rules of 30 % forest from the whole land.

Perum Perhutani activities concern in keeping the forest resources and paying attention to social prosperity. Some results of execution of forest activity are the food supply like rice, corn, bean, which is 446.620 ton per year in average and giving job for 167.484 people per year in average on total income Rp 46.704 billion per year.
3.1.2 Human resources
1. Name of Organization : Perum Perhutani Unit II KBM INK
(Kelompok Bisnis Mandiri Industri Non
Kayu)
2. Banner of Company

3. Address : Jalan Margomulyo No.1 Tandes PO BOX
1976 Surabaya 60186
Phone: 031-7492401/7492402
Fax: 031-7490190

4. Job Description
 Mr. Ir. Handoko Mulia is a person who responsibles to approve any documents in Perum Perhutani KBM INK Surabaya.
 Mr. Subiyanto, S.sos. is a person who responsibles to manage financial sector.
 Mr. Besari is a person who responsibles to manage every person who has importance with Perum Perhutani.
 Mr. Adi Winarno is a person who responsibles to manage the staff in marketing division he is also responsible in signing any documents during transaction.
 Mr. Suwarno is a person who responsibles to help Mr. Adi to manage product Supply fluency in Perum Perhutani.
 Mr. Habib Isa Anshori, SE is a person who responsibles to help Mr. Adi in marketing and controling the fluency of product selling at Perum Perhutani.
 Mr. Jaka Suwarno is a person who responsibles in managing Perum Perhutani Product in the factory.
 Mr. Ir. Nanang Sugiharto is a person who responsibles to process Pine rubber into Gumrosine and Turpentine Oil at PGT.
 Mr. Suwardi is a person who manages the export procedure in Perum Perhutani. There are six staff who helps Mr. Suwardi in DOC-PAL division.
 Mrs. Novi Rosalina, is a person who manages Domestic Sale Procedure in Perum Perhutani. there are fourth staffs who helps Mrs. Novi in marketing division

The Organization Structure of Perum Perhutani Unit II KBM INK
Jawa Timur

5. Vision and Mission of The Company
Vision: To be the best forest management organization in the world
Mission:
1. Carrying out the principle of tropical forest management with around society
2. Increasing productivity and quality of forest resources
3. Maximizing the benefit of forest products such as wood, non-wood, and other potential in a way to increase the income whether for the company or inhabitant around.
4. Building the human resource that clean and professional.
5. Playing role and supporting in building region and national economy.


3.1.3 Commodity and Service
A. Service
Perum Perhutani KBM INK is active in noon wood forest product, as they called KBM INK (Kelompok Bisnis Mandiri Industri Non Kayu). They trade their commodities both in domestic and foreign country (export). In the goal to serve their customers well, the management of Perum Perhutani KBM INK takes many efforts on raising first rate service. They use one door and one day finishing service. Perum Perhutani KBM INK in customer service always follows the marketing procedures which has made by the directorate of Perum Perhutani, that’s export service and domestic service.

Export Service:
1. Making the notification about product and price
2. Importer proposes the request of purchasing to marketing division included type of product, volume, quality, price, time of shipping.
3. Approval by marketing division of the request of purchasing.
4. Exporter and importer make a deal of sale contract with COS (Confirmation of Sale)
5. Importer pays through bank
6. Exporter and importer publish Letter of Credit (L/C) or money transfer bill through telegraphic transfer (T/T)
7. Supplying and shipping commodity (Free of Board-FOB) by exporter.

Domestic service:
1. Making the notification about product and price
2. Customer proposes the request of purchasing to marketing division included type of product, volume, quality, price, time of shipping.
3. Approval by marketing division of the request of purchasing.
4. Publishing Selling License , SIP (Surat Izin Penjualan) for customer
5. Confirmation of supply of product in warehouse
6. Payment through bank
7. Customer shows proof of payment direct or through fax
8. Publishing Bill of Selling
9. Carrying out of the product

B. Commodity
Perum Perhutani Unit II KBM INK has many commodities which are carried on shoulder both in domestic area or foreign country. Particularly on export trading, Perum Perhutani KBM INK’s products are:
1. GUM ROSINE
Special Properties of Gum Rosin is natural organic compound, mainly composed of resins, possesses chemical activity when dissolved in many organic solvents. Since rosin is easily softened and oxidized, in the oil paint industry, the carboxylation reaction of resin acid is usually employed to produce resinate for further use. Uses of Gum Rosin are paint, most rosin product is used for the manufacturing of paper, soap and printing ink. While in producing of synthetic rubber and printing ink, polymerized rosin, resin acid is changed into disproportionate rosin, hydrogenated rosin, etc for further use by its double bond reaction. (www.perhutaniproducts.com)
Quality of Gum Rosine can be divided into three major prices. They are: X (the best), WW (good), WG (medium), N (enough). But X type is the only product exported. Most this product is exported to India and Japan.

Grade Code Color
Best X (Rex) Pure
Good WW (White Water) Clear Water
Medium WG (Window Glass) Clear
Enough N (Nancy) Yellow-brown

2. TURPENTINE OIL
Turpentine oil is a product from Pine Gum which has distillated. The color of turpentine oil is white transparent, turpentine oil is a strong dissolver. In Indonesia the most Pine species is Pine Merkusii. Most of this product is exported to India, Bangladesh, Pakistan, Taiwan, Unites States, Canada, and Europe. The utilities are Paint dissolver, Perfume raw material, Disinfectants etc. (www.perhutani products.com)

3. COPAL
Copal is a resin that have extracted from Agatahis Lorantifolia trees. It’s has protected area with the size of 188.500 hectares. Copal is exported to Germany, Pakistan and United State. The utilities are rosin added in small quantities to traditional linseed oil/sand gap fillers, used in building work, paper sizing. Product capacity is 423 ton/year.
(www.perhutani products.com)


4. SEEDLACK

Lack is a substance that comes from insect (genus Laccifer) secretion. There are 3 insect that could produce lack, those are Laccifer lacca, Kerr; Laccifer javanus, Chomb; and Tachardia aurantiaca, Ck LL.Those insects living as parasit in kesambi (Schleichera oleosa), ploso (Butea sp), widoro( Zizyphus jujuka), dan akasia (Accacia vilosa). Perhutani’s seedlac factory use Laccifer lacca, Kerr to produce lack. Product capacity is 220 ton/year. Product Stock is 37 tons. Most of this product is exported to Pakistan and Bangladesh. The utilities are paint industries, cosmetic, and medicine industries.
(www.perhutani products.com)

3.1.4 Facilities

Perum perhutani KBM INK unit II is located in Margomulyo street which well-known as industry and warehouse area. As the other offices, Perum Perhutani KBM INK has many facilities which are used to dispose many company activities. There are two types of facilities, common facilities and particular facilities.
1. Common Facilities
• Parking Place
Parking place in Perum Perhutani KBM INK is not too large. Car and motorcycle are not divided because Perum Perhutani KBM INK has no many employees as in Central Perum Perhutani.
• Mosque
Perum Perhutani KBM INK has a large mosque located beside of the office. The mosque is very comfortable. In Friday many employees and people around have Friday praying in this mosque.
• Canteen
Perum Perhutani KBM INK also has a clean and comfortable canteen for the employees.
• Warehouse
Perum Perhutani KBM INK has a large warehouse located on right backside from the office. It is used to keep the commodities which has been boxed and ready to be carried.
• Security office
Perum Perhutani KBM INK has a security office. The security system is very strict and discipline both in and out goods from and to warehouse.
• Cooperative
Perum Perhutani KBM INK has a cooperative located on backside of security office. It provides staff need and photocopy machine.
• Field
Perum Perhutani KBM INK has a field for many activities such as ceremony, gymnastic, or exercise together on Friday morning.

2. Particular Facilities
• Multipurpose room
Perum Perhutani KBM INK has a multipurpose room which is used to take a rest and put important equipment such as extinguisher.
• Doc-pal office
This room belongs to export division. The staffs do their job in fulfilling and finishing the documentation of export in this room. It is completed by computers, internet link, scanner, fax, telephone, etc.


3.2 THE APPRENTICESHIP EXECUTION

At the first time, Mr. Suwardi and Mr. Haroen as the head of export gave the writer explanation about the company in general view. The writer was given the further explanation while we observed directly to the commodities in warehouse. The writer observed directly the acceptance of product from many producer areas in Jawa Timur such a Probolinggo, Situbondo, Jember, Trenggalek.
In the next chance, the writer was shown stuffing product which is exported to Japan, India, China, France, Dutch, Germany, Bangladesh, etc. The writer also observed stuffing process to container for next brought to Tanjung Perak Surabaya harbor.
The writer was also taught about the type of quality of product, the expired date, and feasibility study of product. The most important point of this apprenticeship is information about marketing. The writer was shown about procedures of marketing both in domestic and export term. Particularly, the writer observed about the export term and its documents needed. But the writer had no chance to fulfill any documents. The writer just observed and was given explanation about L/C and how to check it.
In the whole apprenticeship, the writer made a documentation of the program. The writer asked some examples of documents as shown above. The writer took some picture and got some chart, tables and other documents to fulfill the material to arrange this report.


The result of the observation could be explained below:
1. Export
General Procedures of Export in Perum Perhutani KBM INK were:
a. Exporter and impoerter make negotiation about the product, quality, quantity, etc. After approval has done, the importer has to fulfill COS (confirmation of sale) first before the contract of sale be made. To get the COS the importer should pay 15% DP (down payment).
b. Importer requests in opening bank to opened L/C
c. Opening bank in abroad give L/C to exporter through correspondent/ receiving bank in Indonesia
d. Correspondent/receiving bank give L/C
e. Exporter have to do production and prepare export
f. Exporter calls shipping to do consignment goods export
g. After ready to export and there are shipping schedule, exporters begin to register PEB in Directorate General Custom and exercise will checking PEB to carriage in ship
h. Activity of carriage goods export in ship.
If obliged by importer, the export product has to be accompanied with SKA (Certificate of origin ). So the exporter has to take care of the document of SKA to the institution that publishes SKA with enclosing the following documents : the photo copy of PEB that has been approved by the custom and the photo copy of B/L. Instance publishing of SKA is:
1. Department TKT.I Depperindag
2. Department TKT.II Depperindag
i. Exporter has done negotiation L/C to correspondent/ receiving Bank and bringt B/L Negotiable, PEB that agree by Directorate General Custom and Exercise and all documents in L/C.
j. Correspondent/Receiving Bank send documents to the opening bank abroad.
k. Opening Bank give document B/L to importer for management in harbor to out of goods and finishing payments by importer.
l. The importer carries out of goods from harbor.

In addition to those general procedures, there are two type of export term. They are:
1. Export with L/C ( Letter of Credits)
Every buyer that buys Perum Perhutani’s products in a large number, they should make COS (Confirmation of Sale). They bring this COS to the Perum Perhutani to be approved. Then, they should come to Perum Perhutani Unit II KBM INK to confirm the product. Perum Perhutani KBM INK will make some required documents such as: OP (shipping order) for booking place in the sip, DO (Delivery Order) for taking container, PE, PEB, etc. every documents that required based on L/C.


2. Export non L/C
Every buyer that buys Perum Perhutani’s product in a small number, they should not make COS (confirmation of Sales). They only need to make Shipping Instruction based on L/C. They do not need to come to Perum Perhutani center. They only need to bring this shipping instruction to Perum Perhutani KBM INK unit II to confirm the product, then Perum Perhutani KBM INK will make some required documents such as: OP (shipping order) for booking place in the ship, DO (delivery Order) for taking container, PE, PEB,etc. Every document that required based on shipping instruction.
According to what the writer got from the adviser of Perum Perhutani KBM INK, the general procedure of export could be explained below:
Source: Dok-Pal Perum Perhutani Unit II KBM INK Jawa Timur
2 Documents of Export
According to the procedures of export which had explained above, the writer can conclude the documents which are needed in export term. They are:
1. COS ( Confirmation of Sales)
Confirmation of sales is a document which is filled by importer to order products to the company. This document is commonly provided by the company particularly central office.
2. Letter of Credit (L/C)
Letter of credit is a document issued by a bank at buyer's request in favor of a seller, promising to pay an agreed amount of money upon receipt by the bank of certain documents within a specified time. Including in letter of credits are:
a. Invoice
Invoice is a bill for the goods from the seller to the buyer. These invoices are often used by governments to determine the true value of goods when assessing customs duties. Governments that use the commercial invoice to control imports will often specify its form, content, number of copy, language to be used, and other characteristics.
b. Packing List and Weight List
Packing List is a list which shows number and kinds of packages being shipped, totals of gross, legal, and net weights of the packages, and marks and numbers on the packages. The list may be requested by an importer or may be required by an importing country to facilitate the clearance of goods through custom sacking List.
c. Certificate of Inspection
Certificate of inspection is a document in which certification is made as to the good condition of the merchandise immediately prior to shipment. The buyer usually designates the inspecting organization, usually an independent inspection firm or government body.
d. Certificate of Origin
Certificate of origin is a document in which certification is made as to the country of origin of the merchandise. .F.R. (Cost and Freight) and C.I.F. (Cost, Insurance, and Freight)—indicate that the seller will deliver the goods onto a vessel and pay all the normal charges to get the cargo to the named seaport. The buyer assumes all risks from the time the cargo is placed onto the vessel at the seaport of loading. C.I.F. also indicates that the seller arranges for insurance as an automatic condition of the contract.
e. Beneficiary certificate
Beneficiary certificate is a statement by a producer, sometimes notarized, which certifies that manufacture has been completed and that the goods are at the disposal of the buyer.
f. Shipment detail
Shipment detail is a document which shows the general identity of the export and the commodity. It includes detail of invoice, beneficiary, L/C, etc.
g. Certificate of Analysis
Certificate of analysis is a certificate about the product which has been tasted and included the description.
h. Letter of Indemnity
Letter of indemnity is an insurance letter in relation with the drawn of letter of credit by the exporter.

3. Shipping Instruction (non-L/C only)
Whether L/C or Shipping Instruction, both of them contain similar documents explained above such as invoice, packing list, certificate of origin, etc. the difference is just L/C involve bank as mediator and shipping do not involve bank and use special shipping instruction document.
4. OP (order pengapalan/shipping order)
Op is a document made by the exporter to the harbor officer that they want to export product.
5. DO (delivery order)
DO is the next document after OP. commonly, it is notification about stuffing product in the harbor
6. List of Container’s load
List of Container’s load is an additional document which is used in shipping process to give information about the container and its contain.
7. PEB (pemberitahuan ekspor barang/good export notification)
PEB is a notification document which gives information to the directorate of custom that the exporter wants to export their product.
8. PE (persetujuan ekspor/ export approval)
Export approval is a document which is made by the directorate of custom to allow the exporters to carry away their product in harbor.
9. Bill of Lading (B/L)
Bill of Lading is a document which provides the terms of the contract between the shipper and the transportation company to move freight between stated points at a specified charge

3. Obstacles found
According to what the writer found during the apprenticeship. There were some discrepancies of export documents in Perum Perhutani KBM INK. Although the writer had no chance to fulfill document, but the writer had given explanation about what L/C is and how to check it. The writer also asked about the obstacle faced by the staff in fulfilling document. Most of the discrepancy was incorrect or inadequate documents due to carelessness.

3.3 THE WRITER INVOLVEMENT IN THE PROGRAM

3.3.1 Job Description
During the apprenticeship the writer was placed in doc-pal (dokumen pengapalan) or shipping division which was conducted by Mr. Suwardi. He is also the advisor of the writer. He gave explanation and direction what to do for the writer during the apprenticeship. That was:
1. The advisor would give explanation about procedures of export
2. The advisor would give explanation about all the documents needed in export term
3. The advisor would give explanation how to understand L/C and shipping instruction
4. The writer would be given chance to observe the load of product in warehouse
5. The writer would be given chance help the staff in fulfilling the documents of export.
3.3.2 Actual Job
Perum Perhutani KBM INK unit II Jawa Timur was a big company which had many branch and field job such as had explained in point human resources above. Instead, there were other job fields such as in the warehouse. But in this apprenticeship, the writer was involved in the office job with documents although the writer was also guided to understand those documents first.
In the first week, the writer was introduced by the advisor to all of the staff in export division. Then the advisor gave explanation and direction about what to do during the apprenticeship. He also lent the writer some books about export to be studied. Thus in the next day the writer was given explanation about those book. In the next chance the advisor explained about general procedures of marketing in Perum Perhutani KBM INK. During those activities the writer also observed surroundings and other divisions in Perum Perhutani KBM INK.
In the second week, the advisor started to explain about L/C Letter of Credit documents. The writer was given some examples of L/C and allowed to make it own. Then the writer tried to study and understanding all documents of L/C. the writer also asked some questions about L/C. the writer also had a chance to watch and observe process of stuffing product to Chennai in warehouse owned Perum Perhutani KBM INK.
In the third week, similar as what the writer did in the second week the advisor started to explain about shipping instruction documents. The writer was given some examples of shipping instruction and allowed to make it own. Then the writer tried to study and understanding all documents of shipping instruction. The writer also asked some questions about shipping instruction. The writer also had a chance to watch and observe process of stuffing product to Kerachi in warehouse owned Perum Perhutani KBM INK.
In the last week, after all of the theory had been explained by the advisor, the writer was aware. Unfortunately, the next activity which the writer did just observed and watched how the staff in doc-pal division work, how they fulfill the shipping instruction and L/C. The writer just had chance to help the staff copying and typing some documents. The writer had no chance to fulfill any export documents.
However, the writer found some discrepancies. Although, the writer had no chance to fulfill any document, at least the writer was taught how to read and check L/C document. Commonly, the discrepancy was about incorrect or inadequate of document due to carelessness.