Indorayon hopes to resume operations
Indorayon hopes to resume operations
JAKARTA (JP): Shareholders of troubled pulp producer PT
Indorayon Utama named new directors on Wednesday and proposed a
new corporate name, PT Toba Pulp Lestari, in the hope of resuming
its operation in North Sumatra after a nearly two-year hiatus.
The proposed name change and the line up of the board of
directors were intended to show Indorayon's "commitment to the
aspirations of the local people," it said in a statement.
In the shareholders' general meeting of the publicly-listed
company in Jakarta, Bilman P. Butarbutar, formerly a member of
the board of directors, was appointed president replacing Herbun
Darlin, Indorayon said in a statement.
Other directors appointed to the board are new faces: Lennardi
P. Anggijono, Rosman, and Dedy Sutanto. The meeting confirmed
Julian C. Hill as chief commissioner in place of Palgunadi T.
Setyawan.
"The new management's chief task is to prepare the resumption
of operations at the Porsea plant," the statement said, referring
to the site that has been the target of violent attacks by locals
and environmentalist groups.
The company is developing a management concept which strives
to "rebuild its relations with the community," it said.
Indorayon was forced to shut its operation by the government
in 1998 amidst pressure from the local people and environmental
groups who claimed that its operation was destroying the
environment, including the famous Lake Toba.
Every attempt to reopen the plant since then has been widely
opposed, at times involving violent clashes between locals and
plant and security workers.
Acknowledging that there were still some opposition to
Indorayon resuming its operation, the company said that a series
of meetings through the good offices of the North Sumatra
governor yielded a number of commitments on Indorayon's part.
They include resuming the Porsea plant operation "with a new
paradigm to avoid negative impacts on the environment and the
health of the people."
The company pledged to prevent destruction of natural
resources and the ecosystem around Lake Toba and Indorayon's
nearby forestry concession.
It also underlined an appeal by North Sumatra Governor Tengku
Rizal Nurdin to the local people to accept the outcome of the
meeting and to allow the company to conduct tests of its pulp
plant in the near future.
State Minister of Environment Sonny Keraf recommended in
January that Indorayon be shut down completely but his proposal
was quickly opposed by economic ministers in the Cabinet who
feared that a closure would undermine foreign investor
confidence.
Indorayon is 86 percent owned by foreign investors. Apart from
trading on the Jakarta Stock Exchange, Indorayon has also floated
it shares in the United States through American depository
receipts.
The chief commissioner in his report to the shareholders
meeting said Indorayon's sales of pulp paper in 2000 reached only
5,353 tons, down from 51,590 tons in 1999 because of the
disruption to the plant.
The statement did not give the 1999 financial figures but said
the company switched to using U.S. dollars from rupiah because
the majority of its transactions were conducted in the American
greenback and because of the instability of the rupiah.
Indorayon holds rights to 269,060 hectares of pine forests in
the regencies of Dairi, Simalungun, North Tapanuli and South
Tapanuli in North Sumatra.
The company, which started commercial production in 1989, has
the capacity to produce 240,000 metric tons of pulp, in addition
to 60,000 tons of rayon fiber a year.
Indorayon shares were suspended in July after its 1999
financial report was submitted with a disclaimer from auditors.
They last traded at Rp 340 per share. (03)