Pulp investors should collaborate with govt
JAKARTA (JP): Minister of Forestry Djamaludin Suryohadikusumo announced yesterday that private companies intending to invest in the pulp industry will have to collaborate with state-owned forestry firms to gain operational permits.
Speaking to reporters after a hearing with Commission IV of the House of Representatives, which oversees forestry and agricultural affairs, Djamaludin said the policy will become mandatory in addition to other requirements, such as that on the availability of appropriate land for industrial purposes.
"By having shares in the industry, the state firms -- which have helped concessionaires to manage their industrial timber estates -- can also gain profits from such cooperation," he said.
Earlier this week Djamaludin announced that the government will resume issuing licenses for the establishment of industrial timber plantations to boost the country's pulp and paper and cut back paper prices in the long run.
The Ministry of Forestry had previously limited the issuance of such permits to only 13 concessionaires for environmental reasons.
The existing concessionaires include PT Musi Hutan Persada, owned by Prajogo Pangestu, PT Tanjung Redeb Hutami, PT Surya Hutani Raya, PT ITCI Hutani Manunggal and PT Alas Helau, all of which are owned by Muhammad (Bob) Hasan.
The concessionaires also include PT Inti Indorayon Utama and Riau Andalan Pulp, owned by Sukanto Tanoto, PT Arara Abadi and PT Wira Karya Sakti, owned by Eka Tjipta Wijaya, Henzo Forest of Finland, PT Tekongan Pulp & Paper, owned by Ibrahim Risjad, PT Adindo Foresta, owned by Benny Luhur, and PT Mercu Buana Hutani, owned by Probosutedjo.
Encouragement
With the new policy, new investors will be encouraged to enter the pulp industry. However, they have to comply with government regulations which stipulate that the industrial wood supplies must come from plantations grown by the concessionaires on infertile, flat and empty land with an area of 300,000 hectares or more.
Industries are not allowed to fell trees from the existing natural forests.
To ease investments, however, the regulations may be revised to allow prospective investors to establish plantations in areas of about 150,000 hectares.
Djamaludin said that two of the 13 concessionaires -- Mercu Buana and Henzo -- have already agreed to include state firms as shareholders in their pulp industries.
Djamaludin said he expected the other concessionaires to follow suit.
He explained that out of the 13 pulp concessionaires, four have established industrial timber estates with their own funds and the other nine with reforestation funds collected by the ministry from other concessionaires.
Djamaludin told House members yesterday that the pulp and paper industry currently has a capacity of 1.04 million tons per year which needs a supply of 5.2 million cubic meters per year.
Raw material for the industry is still obtained from small- sized wood from land-clearing and conversed forest projects.
Until the end of the Fifth Five-Year Development Plan which ended last year, 1.05 million hectares of industrial timber plantation had been planted, of which 396,071 hectares were used in the pulp industry.
Djamaludin said that based on an eight-year cycle, the timber estates are expected to start being harvested from 1996 to 1998.
"Timber supply for pulp and paper industries from these estates will hopefully ease the burden on natural forests," he said.(pwn)