Toba Pulp targets $5 million profit on increased output

Apriadi Gunawan, The Jakarta Post, Medan

Shareholders of PT Toba Pulp Lestari Tbk (TPL) targeted the company's management to reap US$5 million profit, following two consecutive years of financial losses.

TPL financial controller Loh Wing Yip said after the annual shareholders meeting on Wednesday that the North Sumatra-based company was upbeat about meeting its target due to increasing production.

"If we reach $5 million profit this year, it's a good indication," he said.

TPL President Commissioner Dedy Sutanto said the company's losses were not due to shortages in raw material supplies but because of the firm's reinvestment in some projects including environmental projects and reforestation.

One successful result arising from the projects, Dedy claimed, was the ISO 14001 certification for the firm's environmental management in forestry and in production.

The company reported that it suffered $13.5 billion in losses in 2003 when it had to stop operations due to allegations from locals that the firm had polluted the area. The government allowed the firm to resume its pulp production, after it managed to overcome the environmental problems, but its rayon production was halted.

Last year, TPL managed to reduce its losses to $1 billion.

Due to the losses, Loh said that the company might not be able to pay dividends for the next five years.

TPL reported that last year's total production reached 240,000 tons, and this year's first semester production was 189,500 tons.

Sixty percent of the company's production is exported to China, Taiwan, Thailand and South Africa while the remaining 40 percent is for the domestic market.