Timber firm Barito to buy Enim Musi Leastari

Timber firm Barito to buy Enim Musi Leastari

The Jakarta Post
Jakarta

One of the country's largest timber companies, PT Barito Pacific
Timber announced on Thursday that it had provided US$255.6
million in cash to buy a 60 percent stake in PT Enim Musi
Lestari, which manages some 296,400 hectares of industrial
plantations.

Barito currently holds a 40 percent stake in the company,
while the remaining 50 percent is owned by PT Tunggal Setia
Pratama and 10 percent by PT Muktilestari Kencana.

The publicly listed company unveiled the plans in a statement
to the Jakarta Stock Exchange.

It said the move, which will put Barito as the sole owner of
Enim Musi, was aimed at helping resolve the lack of raw material
supply from its forest concession areas for plywood
manufacturing.

Barito said the raw material shortage was caused by the
increasing demand from the international market for an "ecolabel"
certificate for raw material. The certificate would only be
provided for timber coming from industrial plantation estates,
not from natural forests.

The country's plywood industry still relies on raw materials
from natural forests as its supply from industrial plantation
estates was still relatively small.

Barito said the acquisition was also aimed at an increased
availability of raw material needed by Barito's subsidiary PT
Tanjung Enim Lestari Pulp and Paper. Barito owns a 40 percent
stake in Tanjung Enim Lestari.

Barito also said that the acquisition was part of the
company's restructuring plan to boost synergy and efficiency of
in the company.

Shareholders are expected to approve acquisition program on
March 31 extra ordinary shareholders meeting.

Barito was established by timber tycoon Prajogo Pangestu, a
friend of former president Soeharto.