PT Riau Andalan to construct new paper mill in 1996
KAMPAR, Riau (JP): PT Riau Andalan Pulp and Paper will embark next year on the construction of a paper mill nearby its pulp plant here which started trial production a few months ago.
Daulat Tarigan, a manager of the company, told journalists over the weekend that the paper mill, which will have a designed production capacity of 250,000 tons per annum, will need a total investment of Rp 1.795 trillion (US$788 million).
"The paper mill is expected to come on stream later in 1997," Daulat said, adding that a portion of the paper output will be exported.
Some $150 million of the investment for the paper mill has been raised from the initial public offering of its holding company, Asia Pacific Resources International Holdings Ltd. (APRIL), on the New York Stock Exchange last March.
APRIL, which has an administrative office in Singapore, is controlled by Sukanto Tanoto, chairman of the widely-diversified Raja Garuda Mas Group.
Sukanto set up APRIL in a joint venture with foreign investors by transferring to it his controlling interests (61 percent) in PT Inti Indorayon Utama, a publicly-listed pulp and rayon company in North Sumatra, and 99 percent of his equity stake in PT Riau Andalan Pulp and Paper.
Riau Andalan's pulp mill currently produces some 1,200 tons to 1,500 tons of short-fiber pulp per day. By next year, the pulp mill, which has an installed production capacity of 750,000 tons per annum, is expected to produce up to 2,000 tons per day, according to Daulat.
Export
The pulp mill, besides selling on the domestic market, also exports a portion of its output to countries in East Asia and Europe.
"We are also studying the possibility of marketing our pulp in North America as we want to focus our marketing strategy on the Asia-Pacific region," Daulat added.
Paper industry analysts estimate that the region is a net importer of 5.5 million tons of pulp annually and, as the per capita consumption rises, paper production throughout the region is expected to soar by some 2.4 million tons per annum.
Daulat explained during the first few years, and until its 180,000 hectares of timber estates are fully developed, the pulp mill is using wood wastes from the local forests and from land clearing work.
Izardi, another executive of the pulp mill, said the company had thus far developed some 25,000 hectares of timber estates, which will be ready for harvesting by 2002.
He added that the pulp mill, which uses Finland's latest pulp- production technology, is self-sufficient in energy. It uses both bark and wood wastes as fuel for power generation, which uses steam driven turbines.
In addition, Izardi explained that the pulp plant also produces its own process chemicals at an integrated chemical plant on the mill site.
Izardi said the company had invested some US$50 million for the development of a waste water treatment facility to ensure that the wastes it produces does not endanger people or the environment because such pulp milling consumes a relatively lot of water.
Izardi said the pulp mill currently produces some 50,000 cubic meters of waste water per day, while the waste treatment facility has a designed capacity to process 100,000 cubic meters of waste water per day.
"Our environmental protection standards conform to those applied in North America and Europe and stand up to close comparison with the best industry practices on a global basis," Izardi said. (rid)