Inti Indorayon's acquisition plan approved

Inti Indorayon's acquisition plan approved

JAKARTA (JP): Shareholders have approved PT Inti Indorayon
Utama's plan to acquire the Kerinci Chemical Assets of PT Riau
Andalan Pulp & Paper (RAPP) for US$141.56 million.

During the extraordinary meeting in Medan Thursday, they also
approved the appointment of Sukanto Tanoto as the Indorayon chief
commissioner. He replaces his late brother, Polar Yanto Tanoto,
who died in a plane crash near Medan last September.

Corporate secretary P. Daritan said following the meeting that
shareholders also gave the go-ahead for concluding agreements on
sales of chemicals to PT RAPP, and energy purchases with PT Riau
Prima Energi (RPE).

He said the U.S. dollar would be used in all transactions.

The acquisition plan is part of a company strategy for
developing the chemicals division as the third core business
along with pulp and viscose rayon fiber, according to Daritan.

He said the move would add an estimated $28 million to
Indorayon's projected net income for 1998. The company is listed
on the Jakarta and Surabaya stock exchanges.

"In the future, the added profit contribution should increase,
as plant capacity utilization improves as a consequence of
Riaupulp planned increase in pulp production," he said.

Indorayon's strategy, he added, was to benefit from the
growing demand for chemicals for internal requirements in the
Raja Garuda Mas Group, and for domestic and other Asian markets.

Indorayon specifically plans to supply chemical requirements
for the Asia Pacific Resources International Holding Ltd. (APRIL)
Group, he said.

"Indorayon has also planned to produce other chemicals, such
as paper chemicals needed by APRIL Group, which will start to
produce papers by 1998," he added. "Paper production of APRIL
Group is expected to increase from 200,000 tons in 1998 to
600,000 tons annually by 2001."

Daritan said the acquisition would also allow for development
of the trading of chemicals, through selling of excessive
production and that exceeding the requirements of APRIL.

"Part of the Indorayon strategy in this acquisition is also to
focus itself long-term in chemicals," he said. "This is mainly
those with higher added value, with big potential in the
Indonesian market and surrounding regions." (hen)