Sinar Mas Group Earmarks $4.3b for Investment
BY :HARI GUNARTO
JANUARY 07, 2015
Jakarta. Sinar Mas Group, one of Indonesia’s largest diversified conglomerates, has earmarked as much as $4.3 billion to expand its business in pulp and paper, palm oil and renewable energy.
Gandi Sulistiyanto, managing director of Sinar Mas, said that the group had set aside up to $3 billion to be invested in a pulp and paper subsidiary, OKI Pulp & Paper Mills.
OKI is building a new plant in Ogan Komering Ilir, South Sumatra, Gandi said, without disclosing the plant’s capacity.
“The technology used by OKI Pulp is top-notch technology and can offer massive energy savings,” he added in Jakarta on Wednesday.
OKI is a subsidiary of Asia Pulp and Paper (APP), Sinar Mas’s pulp and paper holding company, one of the world’s largest such companies, producing tissue, packaging and other paper products.
APP’s products are sold in more than 120 countries across all six inhabited continents.
Sinar Mas is also setting aside $300 million for investments in the downstream products and derivatives of crude palm oil through its subsidiary Energi Sejahtera Mas.
“Both OKI Pulp & Paper and Energi Sejahtera Mas have received tax holidays from the government in the form of an income tax waiver for seven to 10 years and a 50 percent income tax discount for two years,” Gandi said.
In addition, the group also plans to spend about $1 billion building a 1,000 megawatt power plant, which is scheduled to finish construction in eight years’ time.
For this project, Sinar Mas is waiting to settle a deal with state electricity company Perusahaan Listrik Negara about the electricity selling price, Gandi said.
PLN, which has a monopoly on the national grid, buys power from independent power producers like Energi Sejahtera and distributes it to consumers.