Pulp mill gets raw material from state firm

JAKARTA (JP): Pulp maker PT Lontar Papyrus Pulp and Paper Industri, a subsidiary of PT Wira Karya Sakti, has entered into a joint-operation contract with state-owned PT Inhutani V to secure raw material supplies for its Jambi pulp mill.

Wira Karya's manager, Eddy Makhmud, said over the weekend the cooperation with Inhutani was necessary because Wira Karya's industrial timber estates were not ready for harvest.

The timber from Inhutani would come from land-clearing activities to make way for transmigration sites, he said.

Eddy said Wira Karya's pulpwood estate would start production in 1998 or 1999.

The company would start by harvesting 1,000 hectares of the 134,500 hectares of pulpwood estates allocated by the government, he said.

"(The small harvest) poses no problem for us because in the next few years, we will see lots of forests being converted into plantations. So we don't have to worry about raw material supply (for the pulp mill)," he was quoted by Antara as saying.

Lontar Papyrus was established in 1992 at a cost of Rp 1.3 trillion (US$541.67 million at the current rate).

Eddy said the pulp mill would start using raw material from Wira Karya's pulpwood estates in 2005.

Eddy said the mill, which started operating in 1994, had a production capacity of 430,000 tons a year. This required 2.5 million cubic meters of pulpwood a year as raw material.

He said that by boosting efficiency, the mill's annual production capacity could be increased to 500,000 tons.

Lontar Papyrus sells about half of its products domestically market and exports the rest to Italy, Scandinavia and elsewhere. (pwn)

Table: Indonesia's pulp and paper industry in 1996

No.of Installed capacity Status and location mills --------------------------------

Pulp Paper Pulp Paper

(tons p.a) (tons p.a) (%) (%) ========================================================================== State enterprise 3 240,000 322,900 8.3 5.3 Private Company Domestic Investment 62 335,400 3,749,600 11.6 61.9 Private Company Foreign Investment 11 2,323,000 1,987,600 80.1 32.8 -------------------------------------------------------------------------- Total 76 2,898,400 6,060,100 100 100

Integrated (pulp and paper) mills 11 1,438,800 1,330,100 49.6 21.9 Non integrated mills: - paper 61 -- 4,730,000 -- 78.1

- pulp 4 1,459,600 -- 50.4 -- -------------------------------------------------------------------------- Total 76 2,898,400 6,060,100 100 100

Java 63 323,800 5,585,900 11.3 92.2 Sumatra 12 2,530,000 472,200 87.3 7.8 Kalimantan 1 39,600 -- 1.4 0 -------------------------------------------------------------------------- Total 76 2,898,400 6,060,100 100 100 ==========================================================================

Source: Indonesian Paper Trade Directory, Indonesian Pulp and Paper Association