Indonesia may produce 11m tons pulp by 2010
Indonesia may produce 11m tons pulp by 2010
RIO DE JANEIRO (Reuter): Indonesian pulp production capacity
could reach 11.1 million tons by the year 2010, the chairman of
RGM International Corp told an international pulp and paper
conference here.
No less than 23 pulp production projects are currently on the
drawing board and if the majority are completed, capacity could
exceed 11 million tons by 2010, Sukanto Tanoto said in a speech
to the two-day seminar which ended on Tuesday.
Indonesian pulp production capacity was 3.1 million tons in
1996 and should grow to 4.4 million tons this year, 5.2 million
in 1998 and 5.7 million in 1999 and the year 2000.
"The time when Asia had to depend solely on pulp and paper
produced from slow-growth trees with expensive labor and
transported half-way round the world is coming to an end," Tanoto
said.
Annual production at the Riaupulp factory belonging to RGM's
pulp and rayon fiber divisions, Asia Pacific Resources
International Holdings Ltd should almost triple to two million
tons by the year 2000 from 750,000 tons currently.
The anticipated rise in total Indonesian production would
represent an increase of 40 percent between last year and the
next century, Tanoto said.
Internal demand, plotted at 2.5 million tons in 1996, is
expected to grow to 2.9 million tons this year, 3.2 million
tons in 1998, 3.6 million in 1999 and four million tons by the
year 2000.
This would mean a 60 percent rise from 1996 levels, driven by
an expected annual economic growth rate of eight percent which
should boost demand for paper and packaging.
Export potential for pulp should rise from one million tons in
1996 to 2.8 million tons in 2000, and for paper and cupboard from
1.7 million tons last year to 2.9 million tons in the year 2000.
In the next four years there should be no threat of a wave of
cheap Indonesian pulp flooding the world market, Tanoto said.
Most of these potential exports will be destined for Asia due
to more advantageous freight costs and moreover they will be
insignificant given an anticipated surge in demand in Asian
countries where GDPs are expected to grow 10 percent annually.
But as the new projects come on stream, this situation will
change, Tanoto said.
"I believe exports of Indonesian pulp...could eventually
became the standard with which other producers will have to
compete in terms of cost efficiency and quality," Tanoto said.
"Indonesian producers will become price-makers not price-
takers, that is, they will establish the market price and not
have to accept the price offered to them," he added.