UPM abandons RI alliance

Sat, 18 Sep 1999 | Source: REUTERS

HELSINKI (Reuters): Finnish paper maker UPM-Kymmene pulled the plug on Thursday on its planned alliance with Indonesian partner in an apparent reaction to the upheaval in East Timor.

"It would have meant taking more Indonesia-risk, this was the key issue," UPM's Executive Vice President Martin Granholm told Reuters.

UPM said it and APRIL (Asia Pacific Resources Holdings) had agreed to abandon a plan to swap fine paper assets because they could not reach an agreement on how to redraw their 1997 deal that fell through because of the Asian economic crisis.

APRIl is the owner of PT Riau Andalan Pulp & Paper (Riaupulp) of Indonesia, which operates a 850,000 tons per year BHK pulp mill.

Granholm said the talks failed as any acceptable solution would have increased UPM's exposure to Indonesia. third paper mill in time to meet the conditions for the deal.

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