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)