Finnish UPM and Indonesia's RGM set up alliance
Finnish UPM and Indonesia's RGM set up alliance
HELSINKI (Reuter): Finnish UPM-Kymmene said yesterday it was
creating a strategic alliance with Singapore-based APRIL Fine
Paper, a subsidiary of Indonesia's RGM International, for fine
paper production in Europe and Asia.
It said in a statement the two were swapping 30 percent of
fine paper operations in a non-cash deal.
"Under this alliance, UPM-Kymmene and APRIL (Asia Pacific
Resources International Holdings Ltd) will swap 30 percent of
their respective fine paper operations in a non-cash
transaction," UPM said in a statement.
The alliance agreement was signed by APRIL's Chairman Sukanto
Tanoto and UPM-Kymmene's President Juha Niemela.
APRIL, whose corporate and administrative offices are
headquartered in Singapore, is a key Asian producer of pulp,
paper and rayon fiber with plants in Indonesia's North Sumatra
and Riau provinces.
It is a subsidiary of RGM International which is majority
owned by the Sukanto family.
APRIL controls two major companies -- PT Inti Indorayon Utama,
a pulp and rayon fiber producer in North Sumatra which is listed
both in the Jakarta and Surabaya stock exchanges and PT Riau
Andalan Pulp and Paper which operates a 750,000- ton pulp mill in
Riau.
"The agreement will enable UPM-Kymmene to gain immediate
access to the rapidly expanding Asian fine paper market, where
fine paper consumption is forecast to increase by three million
tonnes by the turn of the century," UPM said.
UPM would hold 70 percent of the European part of the alliance
and APRIL 70 percent of the Asian part, it said.
APRIL will gain access to UPM's fine paper research,
production know-how and marketing expertise, ensuring the
successful start-up and future performance of its Asian fine
paper operations, it said.
"In Europe, UPM-Kymmene would hold 70 percent and APRIL 30
percent of a new company, UPM-Kymmene Fine Paper, which will
comprise UPM-Kymmene's fine paper units, Nordland Papier in
Germany and Kymi in Finland," it said.
"The new company is the largest fine paper producer in Europe
with a combined annual capacity of 1.7 million tons of paper and
460,000 tons of related pulp," it said.
"Similarly, in Asia, APRIL will hold 70 percent and UPM-
Kymmene 30 percent of a new company, APRIL Fine Paper, which will
comprise APRIL's paper mills under construction in Sumatra,
Indonesia and Changshu, near Shanghai, China," it said.
These would come on stream in 1997 and 1998 with a combined
capacity of over one million tons of fine paper year, it said.
"The parties intend to implement the proposed alliance by
year-end, after regulatory and other approvals have been
received," it said.
APRIL and Hansol Paper Co. Ltd. of South Korea also set up a
joint venture paper company in May, 1996 to build a US$650
million paper industry in Riau.
The joint venture company, called Riaupaper, is 70 percent
owned by APRIL and 30 percent by Hansol.