TPL aims to return to local stock markets

Evi Mariani, The Jakarta Post, Jakarta

Pulp company PT Toba Pulp Lestari (TPL) plans to "relist" its shares on the Jakarta Stock Exchange (JSX) and the Surabaya Stock Exchange (SSX) in the second quarter of next year, according to a company senior executive.

TPL, previously known as PT Inti Indorayon Utama, was removed from the local bourses in February 2002 after its pulp mill in North Sumatra was forced to shut down due to strong protest from local people and environmental groups.

But the company resumed operations in March this year, under a new mission aimed at protecting the environment as well as helping to improve the welfare of local people.

"We are working hard to restore our operation. Please bear in mind that currently we are working under the close scrutiny of the government, the public and LSMs (non-governmental organizations)," TPL vice president Wagimin Wongso told a media conference following the company's annual shareholders meeting on Friday.

The meeting appointed Dedy Sutanto as president commissioner, Sabam Leo Batubara as commissioner, former North Sumatra vice governor Lundu Pandjaitan as independent commissioner, Jan olof Svensson as president director and Wagimin Wongso as vice president director.

After being closed down for around five years, TPL now expected to be able to produce 90,000 to 100,000 tons of pulp this year, of which 70 percent would be exported to Japan, South Korea, China and Taiwan.

Last year, Hong Kong-based finance company Stearn Capital bought more than $300 million-worth of TPL debt and swapped it for 40 percent of the pulp company's equity.

TPL was founded by tycoon Sukanto Tanoto of the Raja Garudamas Group in 1986.

TPL was battered by years of closure, estimated to have cost the company around $8 million in losses every month.

Wagimin said the company had dedicated a minimum 1 percent of its annual net sales to a foundation managed by the people living around the mill. They live in a small town on the banks of the Asahan River, which flows from Lake Toba, North Sumatra.

"This year we have already allocated five billion (rupiah) to the foundation," he said.

Apart from these funds, the company has also dedicated funds toward community development, such as for fixing the road used by local people and providing scholarships for students there.

"I cannot tell you the exact amount involved, but it is a lot," said Wongso, adding that repairing the road had cost the company some Rp 7 billion (US$823,000).

TPL has also outsourced its trucking and logging divisions to companies owned by people living close to the mill, in a bid to trickle its profit down to the community.

"We are helping local entrepreneurs to buy trucks through a credit scheme. They will repay the loans by giving the company a cut of their revenue," said Eduard Depari, senior advisor at the company.

Depari stated that while the company was perceived as arrogant before, it was now trying to change its image into that of a more community-friendly organization.