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.