UPM-Kymmene to invest $235m in Riau pulp firm

JAKARTA (JP): Europe's largest paper maker UPM-Kymmene will soon invest US$235 million to expand PT Riau Andalan Pulp & Paper's annual pulp capacity to one million tons from 750,000 tons and to double PT Riau Andalan Kertas' paper capacity to 700,000 tons a year.

P. Daritan, the spokesman for the Raja Garuda Mas (RGM) International Group, said here yesterday the additional investment was a result of the strategic alliance between Finland's UPM-Kymmene and Asia Pacific Resources International Holdings (APRIL).

Singapore-registered APRIL, which is listed on the New York Stock Exchange, is owned by Indonesian businessman Sukanto Tanoto, who is also the chairman of RGM.

APRIL created its strategic alliance with UPM-Kymmene last September to raise additional capital for expanding its pulp and paper manufacturing capacities in Riau and to acquire the latest in technology and international environmental standards for its Indonesian operations.

RGM owns Riau Andalan Pulp & Paper and Riau Andalan Kertas, both located in Kampar, Riau province.

Riau Andalan Kertas has just completed the construction of its first paper mill with an annual capacity of 350,000 tons. The plant is scheduled to commence commercial production in April.

Daritan said the alliance also enabled APRIL to accelerate the building of its paper mill in Suzhou, China.

"Riau Andalan Pulp will export part of its pulp output to be processed into fine paper at the Suzhou plant while Riau Andalan Kertas will market part of its fine paper production in Europe through the marketing networks of UPM-Kymmene," Daritan added. (vin)