Removal of Indorayon's mill contradicts prior agreements
Removal of Indorayon's mill contradicts prior agreements
SINGAPORE (Dow Jones): The Indonesian government's call for the relocation of PT Inti Indorayon's mill in North Sumatra contradicts prior agreements between the company and the government, Asia Pacific Resources International Holdings Ltd. (ARH) said Tuesday in a press statement to the New York Stock Exchange.
Singapore-based Asia Pacific Resources International Holdings Ltd., or April Group, is listed on the New York Stock Exchange and owns 62 percent of Indorayon.
The relocation call contradicts an agreement made Sept. 25 to set up an independent audit committee to study the social, economic and environmental impact of the mill in Porsea, North Sumatra, the statement said.
The audit team comprises officials from the environment ministry, trade and industry ministry, local environmental groups, non-government organizations and economists.
The Indonesian environment minister Panangian Siregar said Tuesday in parliament the ministry recommended Inti Indorayon move its mill from the Porsea area following allegations of pollution of the surrounding environment over the last 10 years.
The Porsea mill is located downstream from Lake Toba, it said in the statement.
PT Inti Indorayon hasn't received verbal or written warnings of environmental license contravention from the Indonesian government, the statement said.
Since July, the mill's operations have been disrupted by demonstrations by community members accusing the company of polluting nearby Lake Toba.
Indorayon's finance director, David Pile, late September said disruptions to the Porsea mill operations since July have cost the company nearly $20 million a month in lost revenue.
Indorayon reported a first half net loss of Rp 492.8 billion rupiah, compared with a net profit of Rp 8.9 billion for the same period last year.
The Porsea mill has a yearly production capacity of 240,000 metric tons of hardwood pulp and 60,000 tons of rayon fiber.