Indorayon reiterates business strategy

Indorayon reiterates business strategy

JAKARTA (JP): PT Inti Indorayon Utama announced yesterday the
trial production of dissolving up, the main raw material for
rayon fiber, at its industrial complex at Porsea, North Sumatra.

"The establishment of the dissolving pulp mill is part of our
business development strategy which focuses on three core
businesses -- specialty pulp, rayon fiber and related chemical
products," noted Indorayon's Corporate Secretary P. Daritan.

Daritan said the new facility enabling Indorayon to produce
the material makes the company, which is listed on the Jakarta
Stock Exchange, the first integrated manufacturer of dissolving
pulp and rayon fiber in the country.

He added that the dissolving pulp mill, designed with a
capacity of 180,000 tons a year, will supply the company's rayon
fiber plant also at Porsea which will be expanded to an annual
capacity of 100,000 tons from 60,000 tons at present.

The dissolving pulp mill derives its wood input from timber
estates developed in previously logged timber concessions in the
areas surrounding the Indorayon industrial complex.

Daritan said Indorayon, a unit of the North Sumatra-based Raja
Garuda Mas Group, will further strengthen its chemical production
business by acquiring additional chemical facilities.

"We will sell our 80-megawatt power generation plant at Porsea
to another subsidiary of the Raja Garuda Mas Group as part of our
business strategy," he said, adding that the transaction will be
subject to shareholders' approval.

Daritan saw the strategy as crucial for improving the
efficiency and strengthening the competitiveness of Indorayon in
facing global market competition.

Peregrine securities company concluded in a credit research
review last month that Indorayon is one of the lowest-cost
producer of pulp and rayon fiber in the world. (vin)