APRIL sees brigth future in RI pulp, paper industry

APRIL sees brigth future in RI pulp, paper industry

Dadan Wijaksana, Singapore

Indonesia's pulp and paper industry still has plenty of room for
improvement if it wants to be internationally competitive,
according to a major player.

The Asia Pacific Resources International Holdings Ltd.
(APRIL), which owns a 98.5 percent stake in PT Riau Pulp & Paper,
or Riaupulp, said that Indonesia had advantages over many of its
global rivals.

While it has been deemed a sunset industry by most of the
world's traditional players, such as Scandinavian and North
American nations, the industry is relatively new in Indonesia and
has much to offer, APRIL's vice president Ibrahim Hasan said.

"With only 1.5 million hectares of forest allocated so far for
the industry, the potential for its development is enormous,"
Ibrahim, also the vice president of Riaupulp, said last week in
Singapore during the launch of the company's sustainability
report.

The allocated land is relatively small compared to that of
Brazil, for instance, which has been grouped with Indonesia as
among the fastest growing newcomers to the industry. Brazil has
over 5 million hectares of forest, which are allocated for pulp
plantations, he added.

Indonesia boasts a yearly pulp production of around 6 million
tons. Riaupulp, which operates a pulp mill on a 1,750-hectare
site in Kerinci, Riau province, has an installed capacity of 2
million tons per year.

These figures are expected to increase to meet the rising
global demand. In Asia alone, demand for pulp -- the main raw
material for paper and other paper-related products -- is rising
by 3 to 4 million tons each year.

Another advantage Indonesia has over other established
competitors is its location and climate. "The manufacturing cost
here is much lower, as our tropical forests can be harvested
within six to seven years, compared to around 40 years for sub-
tropical forests," said Ibrahim.

"So, the government should provide more support for the
industry, because countries like Indonesia currently have the
competitive edge," he added.

Asked whether such a support should be transformed into
additional forest concession in Riau, A.J. Devanesan, president
of both APRIL and Riaupulp, replied: "We have yet to negotiate
that particular issue with the government, but we'd welcome any
efforts, which could lead us in that direction."

APRIL has a forest concession of around 350,000 hectares,
which supplies some 95 percent of Riaupulp's fiber -- mostly
Acacia -- supply. The other 5 percent comes from two projects
developed by the company involving the local community in the
form of joint ventures and partnership.

A press statement said that APRIL also owns a 100 percent
stake in Riau Andalan Kertas, or Riaupaper, through its
subsidiary APRIL Fine Paper. It operates a 350,000-tons-per-year
uncoated wood-free paper machine.