Pulp and paper need $7b fund

Pulp and paper need $7b fund

JAKARTA (JP): Indonesia's pulp and paper industry needs an
additional investment of at least US$7.28 billion during the next
four years to meet the growing domestic demand, an official said
over the weekend.

Director of Paper and Paper Products at the Ministry of
Industry, Gatot Ibnu Santosa, was quoted by Bisnis Indonesia
daily as predicting that domestic demand in 1999 is expected to
reach 3.39 million tons for pulp and 2.6 million tons for paper.

To meet the 1999 demand, the total production capacity has to
be increased to 4.11 million tons of pulp and 3.23 million tons
of paper, Gatot said.

He indicated that the domestic pulp plants are unable to meet
the current demand which has resulted in the importation of pulp.
Domestic pulp demand in 1994 was estimated at some two million
tons, but domestic production was only about 1.78 million tons.

Chairman of the Indonesian Pulp and Paper Association, Kahar
Haryopuspito, noted that Indonesia's pulp industry is relatively
new and therefore cannot yet satisfy domestic needs.

Kahar added, however, that within the next five years the
domestic pulp industry will expand rapidly and be able not only
to meet the domestic demand but also will have a sizable
exportable surplus.

According to official data, Indonesia currently has only 16
pulp plants with a combined annual production capacity of two
million tons of paper-grade pulp and 60,000 tons of rayon-grade
pulp. The paper industry has an annual capacity of 1.5 million
tons of newsprint, 2.1 million tons of industrial paper and 9.8
million tons of tissue paper.

Gatot noted that the massive expansion of the industry within
the next few years will enable Indonesia to increase its exports
to $1.05 billion in 1999, compared to $494 million in 1993. (rid)