Barito to start pulp production in 1997
Barito to start pulp production in 1997
JAKARTA (JP): The Barito Pacific Group announced over the
weekend that it will establish a medium density fiberboard (MDF)
factory and pulp plant, both of which are expected to start
production in 1997.
Johannes Hardian, the president of Barito Pacific's
subsidiary, PT Musi Hutan Persada, told members of the House of
Representatives' Budgetary Commission during their visit to
Palembang, South Sumatra, that both plants will be located in
that province.
Hardian was quoted by Antara as saying that the new pulp
plant, PT Tanjung Enim Lestari Pulp & Paper, will be built in
collaboration with Japan's Marubeni Corp. and Nippon Paper
Industries.
The MDF plant, he said, will be established solely by Musi
Hutan Persada, which has concessions for a total of 193,000
hectares for industrial timber plantation in South Sumatra.
Sixty percent of Musi Hutan Persada's shares are owned by
Barito Pacific and 40 percent by state-owned PT Inhutani II.
Although he declined to mention the sum of the investment
required for the projects, Hardian said that the pulp project
would have an initial capacity of 450,000 tons per year and the
MDF plant 240,000 tons a year.
The pulp factory will have a capacity of one million tons per
year.
Minister of Forestry Djamaludin Suryohadikusumo said last
month that plywood, which is one of Indonesia's major non-oil
export commodities, would be gradually replaced by MDF and
laminated vinyl lumber due to changing forest conditions and the
government's sustainable development policy.
Over the next 10 to 25 years, he said, the sizes of large-
timber forest areas will decrease and many of them will be used
mainly as protected forests and national parks.
Panel boards, he said, will no longer be made from large trees
but from smaller, faster-growing species cultivated by
concessionaires which must be made into pulp before being
processed into boards.
Export
Djamaludin is optimistic that annual exports of wood products
can net at least US$10 billion in the next 10 years without
having to rely on plywood.
Indonesia, which currently produces 10 million cubic meters of
plywood per year, supplies about 80 percent of the world plywood
market.
According to the Central Bureau of Statistics, exports of wood
products, which mostly consist of plywood, currently account for
13 percent of Indonesia's overall annual export earnings.
Hardian said that raw materials for the planned plants will be
supplied by Musi Hutan Persada's industrial timber estates,
160,000 hectares of which have already been planted mainly by
Acacia mangium.
He explained that for the first year, the pulp plant will need
about two million cubic meters of raw materials, which will be
obtained from 11,250 hectares of Musi Hutan Persada's
concessions.
Starting from the second year of production, the plant will
require 4.5 million cubic meters of raw materials to meet a
targeted production capacity of one million tons of pulp a year.
The raw material for this will be taken from 25,000 hectares
of Musi Hutan Persada's timber estates.
Hardian acknowledged that the future prospect of the MDF
industry was bright, as market demands were favorable and raw
materials in the country were abundant.
He also pointed out that only a few companies were currently
operating in the MDF industry in Indonesia.
Current pulp prices are $900 per ton while MDF prices are $300
per cubic meter. Other companies in the MDF industry in Indonesia
include PT Sumalindo Lestari Jaya.
Tanjung Enim Lestari's plans, however, were criticized by the
Indonesia Forum for Environment (Walhi), which said the
development of the plants will cause a "massive social problem".
The company has "seized the people's forests and farmland
without any prior consultation," said Walhi, a prominent non-
governmental organization.
The pulp and paper mill, Walhi continued, will also be
constructed on virgin forests, thereby endangering forest
sustainability. (pwn)