Korean firm builds mill in Irian Jaya
Korean firm builds mill in Irian Jaya
JAKARTA (JP): The Korea Development Co. Ltd. (Kodeco) has started work on a US$84 million plywood mill on Yapen island, north of Irian Jaya, which is scheduled to commence operations next March.
Kodeco, the oldest and largest Korean investor in Indonesia, announced yesterday that the plywood plant would have an annual production capacity of 120,000 cubic meters, including 30,000 cu.m of container floorings.
The project is being carried out by a joint venture company, PT Kodeco Mamberamo, which is 75 percent owned by Kodeco and 25 percent by PT Sansaporindo.
"We have secured US$54 million in investment loans from Mitsubishi Bank and the Long Term Credit Bank of Japan," the Korean company said.
It said the shareholders would put up $18 million in equity financing while a further $12 million in working capital loans would come from South Korean banks.
The joint venture company has secured a long-term supply of wood from nearby forest concessions.
"We will get our logs from PT Mamberamo Alas Mandiri which owns 700,000 hectares of concessions in the northern part of Irian Jaya," Kodeco added.
The mill will employ a total of 1,370 staff, including 35 expatriates. Marubeni, also of Japan, will supply most of the plant machinery and equipment.
Kodeco is the pioneer of Korean investment in Indonesia. The company began operating in the country's forestry industry in 1968, shortly after the enactment of the 1967 Foreign Investment Law.
Since then the company has diversified into a wide range of businesses, including containers, electronics, fisheries, oil and gas (in Madura) and cement.
The Kodeco cement project in South Kalimantan, with a planned annual capacity of 2.5 million tons, is a joint venture with several Indonesian firms, including the country's largest cement manufacturer, Indocement. The plant is scheduled to start commercial production in 1997, and will supply the eastern region and the international market.
Kodeco's KE-5 gas field has been feeding the power generation plant of the state electricity company in Gresik, East Java. (vin)