This paper analyzes how pulp and paper industry becomes one of the most contributors to deforestation in Indonesia. The core problem in pulp and paper industry is the uncertainty of wood supply and heavily reliant on natural forest. The uncertainty of wood supply can be explained by declining growth of Acacia and Eucalyptus. This trend can be more severe by pest and disease and forest fire factors. Compansating the declining trend by expanding new land area assumed relating to the deforestation activity in Indonesia over the years.