ITCI plan to build $500 million pulp mill

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)