Finnish company enters Indonesia's pulp industry
JAKARTA (JP): Enso Gutzeit of Finland will team up with PT Inhutani III, the state-owned forestry company, and a subsidiary of PT Gudang Garam to build a pulp mill in West Kalimantan.
Forestry Minister Djamaloedin Suryohadikoesoemo said yesterday that the construction of the pulp plant, which will have a production capacity of around 400,000 tons per annum, will cost about US$600 million.
Speaking to newsmen following his meeting with President Soeharto, the minister said that the subsidiary of Gudang Garam, a major clove-blended cigarette producer, and the state-owned Inhutani III will also develop a 130,000 hectare industrial forest in West Kalimantan to support the operation of the planned pulp plant.
The forestry minister met with the President to report the outcome of his official visit to Denmark, Sweden and Finland earlier this month to promote bilateral cooperation in the management of industrial forests.
During his Finnish trip, the minister also witnessed the signing of a memorandum of understanding agreement between Enso Gutzett, Gudang Garam and Inhutani III on the construction of the pulp plant.
"Enso and its two Indonesian partners will jointly own the planned pulp plant. But with the industrial forests, the Finnish firm will only provide technical assistance," he said.
Djamaloedin said the government has allocated around 130,000 hectares of land for the development of the industrial forest, but around 80,000 hectares of the designated area is being claimed by local residents.
The 130,000 hectares of barren land, mostly overgrown with coarse grass, is owned by the government under the management of Inhutani III.
Djamaloedin said his ministry and the local administration will cooperate in the appropriation of the land for the joint venture company.
Optima
Speaking about the delay of the initial public offering of the timber division of the widely diversified Djajanti Group, the minister said that he still awaited further confirmation from the governor of Maluku before giving a green light to the company's "go-public plan."
Artika Optima Inti, Djayanti Group's timber division, announced its plan to sell a portion of its shares to the public late last year but the plan has since been delayed as the company has yet to receive an approval from the forestry ministry.
The forestry minister refused to issue a letter of recommendation as the company, which operates a number of forest concessions in eastern Indonesia, operates no processing plant in Irian Jaya to support its timber production in the province. The ministry also charges that the company has carried out illegal felling of trees to support its timber processing plant in Maluku.
"We are waiting for a confirmation from the local administration that the company has not been involved in illegal felling of trees to support its pulp plant in Maluku," he said.
The minister also said yesterday that he needed confirmation from the governor of Irian Jaya whether his administration allows the processing of timber harvested from the province carried out in other provinces, namely Maluku. (hen)