RI pulp production expected to reach 11.1m tons by 2010

RI pulp production expected to reach 11.1m tons by 2010

JAKARTA (JP): Indonesia's annual pulp production is expected
to reach 11.1 million tons by the year 2010 with the help of 16
new pulp mills in the country, says Chairman of the Indonesian
Pulp and Paper Association M. Mansur.

Mansur said the figure was based on a government ruling issued
in June, 1995, which allows the opening-up of new pulp projects.

Previously, the government limited the number of pulp mills
operating in Indonesia to 13 producers for environmental reasons.

So far, 10 additional pulp mills have submitted their
proposals in response to the ruling and some have started
planting pulp-timber trees at their estates, a prerequisite which
is intended to ensure the sustainability of the mills' raw
material supplies.

Mansur was quoted by Antara as saying in Sumedang, West Java,
that four pulp mills, with a total production capacity of 2.5
million tons a year, would start operating this year.

He said that by 2000, three more would join, adding another
2.6 million tons to the annual capacity.

"Between 2005 and 2010, 16 new mills will be operating,
increasing the production capacity up to six million tons a year,
to reach a total of 11.1 million tons," Mansur said.

Apart from the new projects, existing pulp mills will also
increase their paper production capacity, Mansur said.

The widely-diversified Sinar Mas Group, for example, plans to
increase the capacity of its paper mills from 2.6 million tons to
3.7 million tons a year by the year 2000, Mansur said.

The Raja Garuda Mas Group, he added, is also planning to
enlarge its capacity from 0.3 million tons to 0.6 million tons a
year in the corresponding period.

Exports

Meanwhile, the Ministry of Industry and Trade's Director of
Pulp and Paper Industries, Gatot Ibnu Santoso, said Indonesia is
currently only capable of exporting its pulp products to
countries outside Europe and North America.

Gatot said almost all of Indonesia's exports of short-fiber
pulp, which reached 547,000 tons last year, went to Asian
countries such as South Korea, Japan, China, Thailand and
Malaysia.

Pulp exports to South Korea last year reached 166,000 tons,
China 65,000 tons, Italy 57,000 tons, the Netherlands 40,000
tons, Taiwan 31,000 tons, Japan 29,000 tons, Thailand 26,000
tons, and 37 other countries, including Vietnam, Malaysia and
India, 133,000 tons.

Gatot pointed out that the volume of Indonesia's pulp exports
to 37 countries showed that the sales were retail in nature.

"Marketing only 99,000 tons of pulp to 34 countries is
actually too small... especially when production costs go up and
profit margins can't keep up with the increase," he said.

The value of Indonesia's pulp and paper exports last year
reached US$1.45 billion, up by 98.02 percent over 1994.

The largest contribution came from pulp exports, which
increased by more than five-fold from $66.3 million in 1994 to
$440.5 million last year.

This was followed by cultural paper, whose exports went up by
55.43 percent from $412.9 million to $641.7 million in the
corresponding period and industrial paper by 16.91 percent from
$142.9 million to $167.1 million.

Gatot said the increase of Indonesia's pulp export values was
mainly caused by higher international pulp prices.

Indonesia aims to export 1.15 million tons of pulp this year,
which is expected to come from an installed capacity of 2.89
million tons. (pwn)