Indonesia will have two new pulp factories

JAKARTA. The government is optimistic Indonesia would achieve its paper pulp production target of 8.7 million tons per year in 2017.

Director of Plantation and Forest Produce Industry at the Industry Ministry Panggah Susanto said, Indonesia will have two new pulp factories that will come on stream in 2017. 

Thos new integrated pulp plants, in South Sumatera and Riau, will have production capacity of 2 million tons per year. 

"Through efficiency and breakthrough in the downstream sector, we are confident the target could be achieved," he said here on Tuesday. 

He said the prospects are still good for paper pulp industry as the world's demand for pulp grew 2.1 percent annually on the average. In addition, there are not many producing countries still having room for expansion like Indonesia.

"The opportunity (for expansion) is open only in Indonesia and a number of countries in Latin America," he said.

President Director of PT Riau Andalan Pulp and Paper (RAPP) Tony Wenas said Indonesia is potential player in pulp and paper industry in the world as it has a number of comparative advantages other countries do not have.

In Indonesia, it takes only four years for acacia and eucalyptus trees to be ready for harvest. In other rival countries, sub-tropical countries , harvest would come every 40-50 years.

"Indonesia also has geographical advantage of being closer to growing markets," Tony said.

He said the opportunity is wide open for Indonesia to break into the ranks of three largest pulp producers among nine producing countries in the world.

He said the government has allocated 10 million hectares of land to be grown with industrial timber, adding so far only 4 million hectares of the land have been utilized.

"If the 10 million hectares of land are fully utilized , it would not be difficult for Indonesia to break into the ranks of three largest producers in the world," he said.

He said with support from the government, expansion of pulp industry could contribute significantly to the country's economic development.

In addition to increasing export earning the expansion of industry would open more jobs, he said.

He said pulp industry has potential multiplier effect , citing, a pulp factory could provide 7,000 new jobs directly and create 90,000 jobs indirectly.

Tony said his company has exported paper products, PaperOne, to 75 countries and the number is expected to increase to 85 countries this year.

He said his company is seeking market expansion in the European Union, although its marketing focus remains in Asia Pacific including China and Australia.