Ministry warns RI's biggest pulp maker<\/p>\n
JAKARTA (JP): Minister of Forestry Djamaludin Suryohadikusumo
\nsaid on Tuesday his office has sent a warning to the listed PT
\nIndah Kiat Pulp and Paper, Indonesia's biggest pulp manufacturer,
\nregarding the company's management of its forest concessions.<\/p>\n
\"A letter of warning, signed by the Director General of Forest
\nDevelopment, has been sent to Indah Kiat, so that the company
\nwill improve its planning,\" Djamaludin told reporters after
\nopening a meeting with the Association of Indonesia's Forestry
\nConsultants on Tuesday.<\/p>\n
Indah Kiat is part of Asia Pulp and Paper (APP), which also
\nincludes PT Pabrik Kertas Tjiwi Kimia of the Sinar Mas Group. APP
\nwas listed on the New York Stock Exchange last month.<\/p>\n
Djamaludin declined to cite when the letter was sent, or which
\nforestry regulations Indah Kiat has supposedly violated.<\/p>\n
\"Indah Kiat's logging program is a bit dubious right now,\" the
\nminister said.<\/p>\n
He added, that if the company did not respond within the two-
\nmonth deadline, his office might \"take serious considerations\"
\nbefore deciding to approve Indah Kiat's annual logging plans or
\nextend its concession rights.<\/p>\n
Indah Kiat, a subsidiary of the Sinar Mas Group, controls a
\ntimber estate of approximately 223,650 hectares in Riau, Sumatra
\nthrough an affiliate called PT Arara Abadi, whose current
\nconcession was granted in October 1991 and expires (if not
\nrenewed) in October 2034.<\/p>\n
In 1993, the Ministry of Forestry fined Indah Kiat close to
\none billion rupiah (almost US$500 million) for failures to pay
\nreforestation and royalty fees.<\/p>\n
A reliable source at Indah Kiat, who requested anonymity, told
\nThe Jakarta Post by phone on Tuesday that, \"We have not received
\nany letter from the ministry recently.\"<\/p>\n
However, the source confirmed the report that Minister
\nDjamaludin had criticized Indah Kiat's logging plans during a
\nvisit to the company's concessions in March.<\/p>\n
Concerns<\/p>\n
\"It is true that at that time Minister Djamaludin had
\nexpressed his concerns about our logging plans,\" the source said.<\/p>\n
The source also denied recent reports that Indah Kiat has been
\nfacing a severe shortage of wood.<\/p>\n
\"The Indah Kiat mill in Riau needs about 3.5 million cubic
\nmeters of wood every year, instead of the reported four million
\ncubic meters,\" the source said.<\/p>\n
\"To fulfill that annual need for wood, we always rely on our
\nharvest and land clearing from within our concessions, as well as
\nwood coming from outside our concessions,\" he said.<\/p>\n
\"In short, we are still producing at full installed capacity,\"
\nthe source said.<\/p>\n
The source also confirmed that Indah Kiat is receiving some
\nwood from a palm-oil estate owned by the Salim Group in Riau.<\/p>\n
The source declined to elaborate on the details of the
\ncooperation between the two groups.<\/p>\n
According to data from Indah Kiat, the company's mill in Riau
\nis capable to produce 790,000 tons of pulp and 254,000 tons of
\nprinting and writing paper annually.<\/p>\n
Indah Kiat's latest consolidated financial report stated that
\nthe firm reported a 36 percent rise in profits last year to Rp
\n146.9 billion from 1993.<\/p>\n
The report also cited that the company's total assets grew to
\nRp 4.05 trillion last year from Rp 3.56 trillion in 1993. (hdj)<\/p>",
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