Sukanto's paper firm to raise funds in U.S.
Sukanto's paper firm to raise funds in U.S.
JAKARTA (JP): Sukanto Tanoto, Chairman of the widely- diversified RGM Group, is intensifying his efforts to become one of Indonesia's largest pulp and paper producers by raising funds on the New York Stock Exchange.
Sukanto told journalists over the weekend that his new company, Asia Pacific Resources International Holdings Ltd. (APRIL), had registered with the United States Securities and Exchange Commission for an initial public offering of 20 million shares.
"We hope to raise around US$240 million from the IPO, of which $150 million will be spent on a paper mill in Riau with an annual capacity of 250,000 tons," Sukanto added.
The IPO, which will sell about 11 percent of APRIL's total common stock next month, is being coordinated and managed by Salomon Brothers of the U.S., he added.
He said the other $90 million would be invested in paper mills in China, which would derive their pulp from the Riau mills which have a total capacity of 750,000 tons a year.
"Establishing paper mills in China -- one of the world's largest paper markets -- is part of our market-positioning strategy," he noted.
He said his company is taking advantage of Indonesia's competitive edge in resource-based ventures by developing timber estates as well as pulp and paper industries in Riau.
"But we will ship part of our pulp output to our mills in China to give us a better gateway to the world's largest market," he said.
Feeding
For the first several years, and until his 159,000 hectares of timber estates are fully developed, the pulp mill in Riau will be fed with wood waste from the local forests and from lands cleared for timber estates.
APRIL, which has an administrative office in Singapore, is controlled by Sukanto. He set up the new company in a joint venture with foreign investors recently by transferring to it his controlling interests (61 percent) in PT Inti Indorayon Utama, a publicly-listed pulp and rayon company in North Sumatra, and 99 percent of his equity stake in PT Riau Andalan Pulp and Paper.
APRIL may be the first Indonesian private company to be listed on the main board of the New York Stock Exchange, added Sukanto, who also owns large stakes in oil palm plantations and in the wood panel industry.
"The name Asia-Pacific was deliberately chosen to reflect our objective to become a global player in the pulp and paper industry in the region," he pointed out.
Sukanto foresees a steady increase in the demand for paper in the Asia-Pacific region, notably in Asia.
As the incomes of people in Asia's developing countries rise in line with the region's robust economic growth, the demand for such basic needs as food, clothing, housing and education (paper) will surge as well, Sukanto said. (vin)