Severe wood shortage at Indah Kiat mill
Severe wood shortage at Indah Kiat mill
JAKARTA (JP): The shortage of wood materials currently being experienced by PT Indah Kiat Pulp & Paper has been so severe that its pulp mill in Riau may be forced to operate at only 50 percent of its annual designed capacity of 900,000 tons, an industry consultant said yesterday.
The consultant, who insisted on anonymity, was commenting on Forestry Minister Jamaludin Suryohadikusumo's remarks during his visit to Riau last week about the acute problem of wood provisions for the Indah Kiat pulp plant.
He confirmed the minister's statement that Indah Kiat requires four million cubic meters of wood materials a year to feed its pulp plant.
"But the company can get a maximum of 50 percent of the total need," the consultant said.
Indah Kiat, a member of the Sinar Mas group, is one of six pulp and paper companies listed on the Jakarta Stock Exchange.
None of Indah Kiat's officials were available yesterday for comment.
The consultant added that Sinar Mas forest concessions in Riau could supply only around 1.2 million cubic meters while Indah Kiat's timber estates could provide one million cubic meters at the most.
"Hence, Indah Kiat may able to get only 2.2 million cubic meters of wood materials a year which are sufficient to produce only 500,000 tons of pulp," he said.
Harvest
He refuted the recent estimate by a director of Indah Kiat, Njauw Kwet Meen, that about 30,000 hectares of the company's timber estates could now be harvested with a yield of 100 to 200 cubic meters per hectare.
"My own estimate puts only 10,000 hectares of the Indah Kiat timber estates ready to be harvested," he said.
During his visit to the Indah Kiat pulp industry in Riau last week, Minister Jamaludin criticized the Sinar Mas subsidiary for its poor planning in timber estate development and logging.
"Indah Kiat has been too preoccupied with input procurement at the expense of its timber estate development," Jamaludin said.
So severe has been the wood shortage encountered by the Indah Kiat pulp mill that the minister ordered the Salim Group to accelerate the conversion of its 125,000 hectare concession in Riau into oil palm estates so that the wood from the land clearing could help remedy the wood shortage.
The minister said he would consider granting a new concession to Indah Kiat only after the company had improved the planning and development of its timber estate concessions.
The Sinar Mas Group plans to list its pulp and paper business on the New York Stock Exchange through its listing vehicle, Asia Pulp and Paper.(vin)