Asian pulp giants to set up new mill

Asian pulp giants to set up new mill

SINGAPORE (AFP): Asia's leading pulp and paper producers,
Indonesia's APRIL Group and South Korea's Hansol Paper Co. Ltd.
agreed yesterday to jointly invest in a US$600 million-to-$650
million paper mill project.

The Asia Pacific Resources International Holdings Ltd. (APRIL)
will have a 70 percent interest while Hansol will take the
remaining equity in the so-called Riaupaper project in Sumatra,
Indonesia, officials said.

As APRIL is a leading pulp producer and Hansol a major paper
producer, the joint venture would give them a toehold in the
regional market, they said.

"This is an ideal joint venture maximizing the combined
strengths of both parties in technology, marketing, fiber supply
and low-cost production -- the four key elements in a successful
paper project," said Dong Kil Cho, executive vice-president of
Hansol.

A joint venture agreement on the paper mill project was signed
here yesterday between Dong and APRIL's deputy chairman Polar
Yanto Tanoto.

"Through this strategic alliance, we are well positioned to
fill the continuous growing demand for paper and paper products
because of buoyant economic growth in Asia," Tanoto said.

APRIL will supply Riaupaper with paper pulp from its adjacent
Riaupulp mill in Indonesia while Hansol will provide technical
and advisory support to APRIL in developing the paper mill.

Hansol, South Korea's largest paper producer and listed on the
Korean Stock Exchange, would take 30 percent of the production
from the "world class paper mill" to be marketed abroad, Dong
said.

He added that the project marked a major step in Hansol's
globalization strategy to double its current paper and board
production capacity of two million tons to over four million
tons a year by 2001.

"While some may view this goal as too ambitious, we have in
fact grown four times in last five years, from half a million
ton capacity in 1991 to two million tons capacity in 1996," Dong
said.

Initial work on the Indonesian plant, to produce 600,000 tons
of paper a year when completed at the end of 1997, has already
begun, officials said.

"Given the projected soaring demand for paper and paper
products in Asia, we are confident that the synergies between
APRIL and Hansol will enable us to capitalize on the enormous
market potential and enhance our market share in the region,"
APRIL's group finance director Berry Kwock said.

APRIL, whose corporate and administrative offices are in
Singapore, is a key Asian producer of pulp, paper and rayon
fiber.

It effectively controls two major companies in Indonesia: PT
Inti Indorayon Utama -- a special pulp and rayon fiber producer
listed on the Jakarta and Surabaya stock exchanges -- and PT Riau
Anadalan Pulp and Paper which operates a 750,000-ton a year pulp
mill.