Indah Kiat's self-sufficiency in raw materials 'in 2005'

JAKARTA (JP): Publicly listed pulp and paper producer PT Indah Kiat Pulp & Paper will reach self-sufficiency in the production of raw materials for its plants by the year 2005, the company's senior executive said on Tuesday,

The executive director of the company, Njauw Kwet Meen, said the company expected its two sister industrial timber estates, PT Arara Abadi and PT Riau Abadi Lestari, to supply at least 75 percent of the raw materials needed by Indah Kiat by the year 2001.

"After 2001, we expect that we will be able to gradually increase the supply from our timber estates in order to become self-sufficient by the year 2005," he said during a hearing with the House of Representatives Commission III for agriculture, forestry and plantations, transmigration and food affairs.

Njauw said PT Arara Abadi and PT Riau Abadi operated 299,975 hectares and 12,000 hectares of timber estates respectively.

He said that the two companies produced 898,813 tons of acacia wood and 1.44 million tons of wood chips used for pulp and paper products last year, or about 50 percent of the raw materials required by Indah Kiat.

Njauw said that Indah Kiat produced 1.2 million metric tons of paper in 1998, a drop of some 8 percent from the 1.3 million tons produced in 1997.

He also said that local consumption of paper in 1998 was 1.6 million tons, down sharply from the 3.6 million tons in 1997.

He said the country's paper production for the year rose to 8.2 million tons, up from 7.2 million tons in 1997.

He attributed the decrease in the country's paper consumption to the ongoing economic crisis which has weakened the purchasing power of Indonesians.

"The surplus from paper production last year was sold overseas," Njauw said.

He said last year Indah Kiat exported 558,059 tons of paper, down 36 percent from 876,682 tons in 1997. Also in 1998, the company exported 353,911 tons of pulp, down 16 percent from 422,721 tons the previous year.

The company also sold 422,721 tons of pulp and 353,911 tons of paper locally last year, compared to 282,930 tons of pulp and 505,663 tons of paper in 1997.

Njauw, however, refused to disclose the value of the company's sales in 1998.

The company exported its products in 1997 to Southeast Asian countries, South Korea, Japan, Taiwan, China, Hong Kong, India, the Middle East, the United States, Australia, European countries and New Zealand, generating US$601.59 billion in export revenue. (gis)