(Antara Photo)

Sinar Mas, April to Boost Indonesia Pulp Production in 2017

BY :INVESTOR DAILY

SEPTEMBER 29, 2015

Jakarta. Indonesia hopes to increase pulp production by 30 percent in the next two years on the back of the expansion of two commodity conglomerates, the Industry Ministry said on Monday.

The country's annual pulp production capacity is expected to reach 10.25 million tons  in 2018 from the current 7.9 million tons, said Pranata, director of forestry and plantation manufacturing at the Industry Ministry.

Ogan Komering Ilir Pulp & Paper Mills, a unit of conglomerate Sinar Mas Group, is building Asia's largest pulp and paper mill with the capacity to produce two million tons of pulp a year. Sinar Mas is investing  Rp 29 trillion ($1.9 billion) in the plant, Pranata said.

Sateri Viscose International, a subsidiary of pulp and paper giant Asia Pacific Resources International, or April, is also making a 350,000-ton capacity pulp plant with an investment of $1.13 billion, he added.

Both plants are expected to be online next year with full production capacity to be reached by 2017.

"So we could expect an increase in production then," Pranata said.

"Our pulp and paper [production] is settled. It is number one in Southeast Asia and third in Asia after Japan and China," he said, adding that local production is capable of meeting the country's printing paper, tissue and export demands.

Still, Indonesia relies on imports for long-fiber pulp  ̶  which is made from cotton instead of wood and is used to make stronger paper like cement bags  ̶  as the country lacks the necessary raw materials, Pranata said.

The country imported 773,970 tons of long-fiber pulp worth $589,700 last year. In the same period, the country shipped $1.7 billion worth of pulp abroad, according to Trade Ministry data.

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