Kampar builds $630m paper mill

Kampar builds $630m paper mill

JAKARTA (JP): PT Kampar Andalan Kencana, a subsidiary of PT Riau Andalan Pulp and Paper owned by the Raja Garuda Mas Group, has started the construction of its US$630 million paper plant, in Kampar, Riau.

The company said in a statement yesterday that the plant, to be called Riaupaper, will have an installed capacity of 600,000 tons of cultural paper per annum.

Riaupaper, located near a pulp plant also owned by the Raja Garuda Mas Group, will start its commercial production late next year with an initial capacity of 300,000 tons per annum.

Kampar's president Polar Yanto Tanoto said that his company will become an integrated pulp and paper company after the construction of Riaupaper.

"This paper project, which will employ 2,500 workers, implements our long-term investment program in Riau province," Polar noted.

The company now owns a pulp plant, Riaupulp, which came on stream last year. It has an installed annual capacity of 750,000 tons with an output of 600,000 tons last year.

He said that Riaupulp will supply 500,000 tons pulp to Riaupaper per annum.

"We expect to export 70 percent of our total production. And exports from Riaupaper alone are estimated at $500 million per annum," he said.

He expressed great optimism about the bright prospects of the cultural paper market due to the steadily rising demand within the country and overseas.

Polar added that the new plant is being financed with Rp 1.4 trillion ($608.7 million) in loans from international financial institutions with the remainder funded by equity capital. (08)