ITCI plan to build $500 million pulp mill

JAKARTA (JP): PT International Timber Corporation Indonesia (ITCI) is planning to construct a US$500 million pulp mill in Balikpapan, East Kalimantan, starting next year, an executive said yesterday..

ITCI president Abbas Adhar said the factory would take about three years to build and would be designed with a daily capacity of 1,200 tons.

Abbas said the mill would procure its raw materials from ITCI's 130,000-hectare pulp wood estate, of which 80,000 hectares had been established.

Abbas said Indonesian industrial timber estates had many advantages compared to those in temperate countries like Europe because the trees were quicker to harvest.

Timber estates in Indonesia can be harvested 10 years after planting but those in Europe need another 10 years before they can be used as raw material for industries.

ITCI is 51 percent owned by the Kartika Eka Paksi Foundation, 15 percent by PT Nusantara Ampera Bakti and 34 percent by the Bimantara Group.

Abbas said ITCI was currently handling the management of a forest concession previously held by a firm that the government considered incapable of conducting sound forest management.

The government normally assigns state-owned forestry firms to take over the management of private concessions in such cases.

The move made ITCI one of the first private concessionaires to be given the responsibility of taking over a badly managed concession.

ITCI currently manages about 325,000 hectares of forest concessions that previously belonged to PT Kayan River Timber Product.

Abbas said timber from this concession was now sold to PT Sumber Mas, which previously received its raw material supplies from Kayan River. ITCI sells timber to Sumber Mas at market prices.

Apart from managing the concession previously belonging to Kayan River, ITCI also has 450,000 hectares of other concessions, he said. (pwn)