Toba Pulp targets $5 million profit on increased output

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.