PT Kiani Kertas plans Nasdaq share listing

JAKARTA (JP): The newly-established PT Kiani Kertas, a pulp subsidiary of the Kalimanis Group, plans to list its shares on the U.S. Nasdaq stock exchange in 1998, the company's president said yesterday.

"But I cannot say yet the percentage of our shares to be listed there," Machnan R. Kamaluddin told The Jakarta Post at a seminar on Nasdaq and the New York Stock Exchange. "We're still making preparations for that purpose. And this seminar is part of our preparations."

He said his company chose Nasdaq because the stock exchange allows new companies with strong potential to float shares and it has no requirements on profitability for three consecutive years.

He said that Kiani Kertas is currently constructing a plant in East Kalimantan.

"We'll start operations next April with a production capacity of 500,000 tons of pulp per year," Machnan said. He estimated the company would need a total investment of about US$1 billion, of which 40 percent would be derived from its own equity and the other 60 percent from local banks' loans.

Machnan said the company will initially focus on pulp, but may expand after a few years into paper production.

He said that to feed the pulp plant, Kiani Kertas is developing about 180,000 hectares of forest industrial estates in Kalimantan. "Of the total area, we have already planted about 30,000 hectares," he said.

Machnan expressed optimism that his company's listing on Nasdaq will be successful, partly because of its low production costs. "When we start operations next April, our production cost will be around $200 per ton, which will be much cheaper than foreign producers. We expect that pulp price will be between $650 and $700 per ton," he said.

Pulp prices on the world market currently average at $390 per ton, Machnan said.

Jack Ribeiro of the U.S. firm, Deloitte Toche Tohmatsu International Partner, told the seminar that Kiani Kertas has a good chance to float shares on Nasdaq.

"The stock exchange is very liquid and investors there favor wood-based companies," he said.

Kiani Kertas is the Kalimanis Group's only subsidiary specializing in the pulp industry. The group, which comprises of wood-based companies, is owned by forest tycoon Mohamad (Bob) Hasan. (bnt)