Private firm, government to jointly set up pulp plant

Private firm, government to jointly set up pulp plant

JAKARTA (JP): The widely diversified Mercu Buana Group and the
state-owned forestry company Inhutani II will establish a new
pulp plant in South Kalimantan which is expected to go into
operation in 1998.

"Hopefully, we can start constructing the plant this year and
expect to begin production in 1998 with a capacity of 2,000 tons
per day," the chief commissioner of PT Menara Hutan Buana, a
subsidiary of Mercu Buana Group, Wartono Kadri, told The Jakarta
Post here yesterday.

Mercu Buana's line of business includes mining, manufacturing,
construction, animal husbandry, plantation and trading services.

Wartono said that the planned plant will involve an investment
of US$1 billion and will be 60 percent owned by Mercu Buana and
40 percent by Inhutani II.

He pointed out that the pulp mill will be supported by 250,000
hectares of industrial timber estates to be developed around the
South Kalimantan city of Batulicin.

"We have thus far planted an area of more than 30,000
hectares," he said.

According to Wartono, the mill will need some 10,000 tons of
logs per day that can be supplied by five hectares of timber
industrial estates.

But the director of forest industrial estates of Menara Hutan
Buana, Djauhari, said that the project is still being negotiated
with Inhutani II.

"Perhaps, it will take some time to finalize an agreement on
the pulp project with Inhutani II," he said.

Djauhari said the project has yet to be proposed to the
Investment Coordinating Board (BKPM).

Until last July, Indonesia's pulp and paper production
capacity was only 1.04 million tons per year, while the domestic
demand already reached more than two million tons per year. (13)