Govt permits joint venture in timber, pulp industry<\/p>\n
JAKARTA (JP): The Ministry of Forestry has licensed a joint
\nventure between the Bumi Raya Utama Group and the state-owned PT
\nInhutani II to establish an industrial timber estate for the pulp
\nindustry.<\/p>\n
The license is the first to be issued since the government
\nreopened the pulp-centered timber estate sector to investors,
\naccording to Bisnis Indonesia daily.<\/p>\n
The planned 150,000-hectare timber estate will be established
\nin Sanggau, West Kalimantan, with an investment of up to Rp 2.2
\ntrillion (US$964.9 million).<\/p>\n
Inhutani II and Bumi Raya have reportedly signed a memorandum
\nof understanding for the establishment of the joint venture,
\nwhich will operate both the forest concessionaire and the
\ncompany's future wood-based plant.<\/p>\n
Under the agreement, Bumi Raya will own 60 percent of the new
\ncompany's shares and Inhutani the remaining 40 percent.<\/p>\n
Funds for the venture would be obtained from bank loan
\nsyndication.<\/p>\n
This is the first time a state-owned forestry firm has had
\nshares in a wood-based joint venture with a private company.<\/p>\n
The Ministry of Forestry had previously closed the timber-
\nestate sector to new investors after licensing 13 projects for
\nenvironmental reasons.<\/p>\n
However, it opened up the sector again to new investors in a
\nbid to boost pulp production -- the raw material in the paper
\nindustry -- and to bring down prices of paper which had soared
\nearlier this year.<\/p>\n
So far seven investors have reportedly expressed interest.<\/p>\n
Many investors interested in establishing pulp and paper
\nplants had been denied licenses because the ministry has
\nstipulated that wood supply must come from timber estates grown
\nby concessionaires on normally unproductive, flat and empty land
\nwith an area of at least 300,000 hectares or more.<\/p>\n
Industries are not allowed to fell trees from existing natural
\nforests.<\/p>\n
Minister of Forestry Djamaludin Suryohadikusumo said in June
\nhe was doubtful that investors would be able to meet the
\nstipulation because there are very few areas in the country which
\nmeet the government's requirements.<\/p>\n
He said, however, that to ease investments, prospective
\ninvestors would be allowed to establish timber estates for pulp
\nproduction in areas of about 150,000 hectares.<\/p>\n
He also stipulated that private investors should involve state
\nfirms in the ownership of the new timber estates and pulp and
\npaper plants. (pwn)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-permits-joint-venture-in-timber-pulp-industry-1447893297",
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"sponsor": "Okusi Associates",
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