RI firm builds pulp and paper mill in Sarawak

RI firm builds pulp and paper mill in Sarawak

JAKARTA (JP): The Raja Garuda Mas Group said yesterday that it
had started the construction of a US$1.3 billion joint-venture
pulp and paper mill with PWE Industries Berhad of Malaysia in the
Sarawak city of Bintulu, Malaysia.

The construction of the pulp and paper mill, called Sarawak
Pulp and Paper, will be launched by the Malaysian Prime Minister
Mahathir Mohamad on Saturday.

Raja Garuda Mas, according to the company's statement, owns 55
percent of the joint venture, with PWE Industries holding the
remaining 35 percent.

PWE Industries is a subsidiary of the Ekram Group, which is
controlled by the Malaysian tycoon Tan Sri Ting Khiing.

The chairman of the Raja Garuda Mas Group, Sukanto Tanoto,
said that in the first phase of operation, Serawak Pulp & Paper
will produce 750,000 tons of pulp per annum.

"In the next phase, we will set up another integrated pulp and
paper mill to produce uncoated paper with an annual capacity of
300,000 tons per annum," Sukanto said.

Sukanto said that the group's expansion to Malaysia is in line
with his business strategy to become a global player in the pulp
and paper industry.

"It is becoming more urgent for us to anticipate the era of
free trade in Southeast Asia and the Asia Pacific region, with
the ASEAN Free Trade Area (AFTA) and APEC agreements coming into
effect," he noted.

The Sarawak pulp and paper mill, Sukanto said, will use wood
chippings from timber cleared on the 69,000-hectare area near the
mill for its raw materials.

The Malaysian government is set to clear the area for the
construction of the Bintulu Dam hydroeletrolic power station.

"But in the long-term raw materials will be supplied by
Ekran's industrial forests," he said.

The biggest paper producer in Malaysia at present is Genting
Sanyen with a total capacity of approximately 250,000 tons per
annum.

The Raja Garuda Mas Group has already entered the pulp and
paper industry through PT Inti Indorayon Utama in North Sumatra
and PT Riau Andalan Pulp & Kertas in Riau.

Recently, Riau Andalan started the construction of a US$630
million paper plant in Kampar, Riau.

Sukanto added that he would employ Indonesian management. (08)