Pangkalan Kerinci, Riau. Asia Pacific Rayon, an affiliate of pulp and paper giant Asia Pacific Resources International Holding, expects to complete construction of Indonesia's largest integrated rayon factory in August, with its output expected to support the country's textile industry.
APR is investing up to Rp 15 trillion ($1.13 billion) in the development of the factory, designed to have an annual production capacity of 350,000 tons of viscose staple fiber, which is used in the textile industry.
During a visit to Riau Province on Sunday (21/01) to view progress of APR's new factory, Industry Minister Airlangga Hartarto said the production facility can help reduce imports of cotton and rayon-related materials and thus help Indonesia save up to $500 million in foreign exchange.
APR is part of Sukanto Tanoto's Royal Golden Eagle Group. Its affiliate APRIL controls one of the largest pulp and paper producers in Asia through Riau Andalan Pulp and Paper (RAPP), which produces 2.8 million tons of pulp and 1,1 million tons of paper annually. It exports its paper to more than 75 countries.
"The government supports this investment, because this factory will be beneficial to the nation's interests," the minister said. He added that the government applauds the group's move to diversify its products.
RAPP will supply APR's new factory with the pulp used in the production of viscose staple fiber.
APR director Thomas Handoko said he was hopeful that Indonesia's largest integrated rayon factory, which he claims would be the world's largest, would have a positive economic and social impact, especially on the local community.
"We expect this factory to commence operations in August," Thomas told reporters, adding that construction started in August 2016.
Most importantly, he said the factory's total production will be from 100 percent renewable sources derived from existing plantations that have been legally certified nationally and internationally.
Viscose staple fiber produced from plants has a better water and air absorption capacity than cotton-based material.
He said APR's products can be used in the production of various goods, including bedding, clothing, towels, wet wipes for babies, masks and many other personal hygiene products.
APR said the factory will create many job opportunities and help stimulate the local economy, both during construction and once it starts commercial operations.
An estimated 4,230 jobs will be created during the construction phase, while 1,218 will become available once the factory becomes operational. The construction phase will potentially result in an increase of up to 1.49 percent in Riau Province's gross regional product from the non-oil and gas sectors.
APR said the new factory will similarly help stimulate the micro, small and medium enterprises in various sectors involved in the factory's operational activities. This would have a positive impact on sustainable growth, especially in Riau Province.